2024 (6) TMI 324 - AT - Income Tax

Grant of registration u/s 12AB - rejecting the application filed by the assessee in Form 10AB on the ground that assessee failed to comply with the notice and prove the genuineness of its activities - HELD THAT - Assessee company was incorporated on 20.03.2021 and filed application for permanent registration on 06.09.2022, Along with the application it has filed the financial statement for the period 20.03.2021 to 31.03.2022 - Based on that set of information we note that it is incorrect on part of CIT(E) to held that final accounts since inception is not filed. The bank account details were also submitted in the application form. From the financial account it can be noted that during the year under consideration assessee received donation of Rs 26,97,148/- and incurred expenditure of Rs. 27,02,718/-. The detail of donation received along with sample donation receipts placed on record and the major details of expenses along with the bills evidences are at PB 52-98. Even the ld. AO has accepted the expenditure claimed by the assessee in the assessment made u/s 143(3) of the Act dt. 26.03.2024 Thus, it is not under dispute that the assessee is not doing the charitable activity and therefore, in the last occasion the assessee could not supply the information and therefore, we are of the considered view that assessee in the interest of justice require one more opportunity to be heard on merits before the ld. CIT(E). Thus, we set aside the matter before the ld. CIT(E) who decide the issue based on the submission of the assessee and after providing proper opportunity of being heard to the assessee and making necessary enquiry in accordance with the law. Appeal of the assessee is allowed for statistical purposes.

Summary

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Rejection of application for registration u/s 12AB of the Income Tax Act.

Condonation of Delay:
The assessee filed an appeal with a delay of 296 days, citing reasons such as receiving incorrect advice from previous counsel and misunderstanding the necessity of filing an appeal due to the company's net loss. The Tribunal, after considering the affidavit and the reasons provided, condoned the delay. The Tribunal referenced the Supreme Court decision in Collector, Land Acquisition vs. Mst. Katiji and Others, 167 ITR 471 (SC), emphasizing a liberal approach in condoning delays when sufficient cause is shown.

Rejection of Application for Registration u/s 12AB:
The application for registration u/s 12AB was rejected by the CIT(E) due to the assessee's failure to submit required documents and prove the genuineness of its activities. Despite multiple notices, the assessee did not provide complete responses, including bank statements, final accounts, and evidence of charitable activities. The Tribunal noted that the assessee had submitted some financial statements and donation details, which were not fully considered by the CIT(E). The Tribunal found that the assessee was genuinely carrying out charitable activities and deserved another opportunity to present its case.

Decision:
The Tribunal set aside the CIT(E)'s order and remanded the matter back to the CIT(E) for reconsideration. The CIT(E) was directed to provide the assessee with a proper opportunity to submit the required documents and to make a decision based on the merits of the case. The Tribunal emphasized that this decision should not be seen as an indication of the merits of the dispute, which should be independently adjudicated by the CIT(E).

Conclusion:
The appeal was allowed for statistical purposes, and the matter was remanded to the CIT(E) for a fresh decision after providing the assessee with an opportunity to be heard. The Tribunal's order was pronounced in the open court on 27/05/2024.