2024 (9) TMI 910 - AT - Income Tax

Denial of registration u/s 12AB - cancelling provisional registration and not granting recognition u/s 80G (5) - HELD THAT - The notice was served on the assessee through e-portal email and speed post. Another notice was issued to the assessee on 29.01.2023 by show cause notice as to why the application should not be rejected. In absence of any information CIT(E) rejected the application. However before us the assessee has shown a letter dated 06.02.2023 which is not at all being considered by the learned CIT(E). If assessee has filed some explanation which needs to be considered and then issue may be decided. Non consideration if any submission is made from the assessee causes severe prejudice to the assessee which must be corrected. Therefore we restore the issue back to the file of the CIT(E) to consider the explanation furnished by the assessee on 06.02.2023 and decide the issue afresh. CIT(E) may carry out any enquiry in accordance with law for verification of the genuineness of the activities for the purpose of granting registration. Appeals filed by the assessee stand allowed for statistical purposes.

Summary

Issues:
1. Denial of registration u/s 12AB of the act and cancellation of provisional registration.
2. Not granting recognition u/s 80G (5) of the Act.

Analysis:
1. The first appeal (ITA No. 1856/Mum/2024) was against the rejection of registration u/s 12AB and cancellation of provisional registration by the Commissioner of Income Tax (Exemption) [CIT(E)]. The assessee contended that the rejection was based on incomplete consideration of details submitted on 06.02.2023 and subsequent rectification application. The delay in filing the appeal was explained by the assessee due to the pending rectification application. The Tribunal considered the peculiar facts of the case and admitted the appeal, directing the CIT(E) to reconsider the explanation furnished by the assessee and conduct any necessary enquiry for verification of activities for granting registration.

2. The second appeal (ITA No. 1857/Mum/2024) was regarding the rejection of recognition u/s 80G of the Act. Similar to the first appeal, the assessee claimed that necessary details submitted on 06.02.2023 were not considered. The Tribunal, based on similar reasons as the first appeal, allowed this appeal as well, directing the CIT(E) to reconsider the explanation provided by the assessee and decide the issue afresh in accordance with the law.

3. In both cases, the Tribunal allowed the appeals for statistical purposes, emphasizing the importance of considering all submissions made by the assessee before making a decision on registration and recognition applications. The Tribunal highlighted the need for fairness and proper consideration of all relevant details to prevent prejudice to the assessee. The orders were pronounced on 28/08/2024, granting relief to the assessee in both matters.