2024 (10) TMI 340 - AT - Income Tax

Denial of grant of final registration u/s 12/12AB and 80G - claim denied as assessee is not registered with the authority prescribed under the Rajasthan Public Trust Act, 1959 - HELD THAT - The reasons advanced by the CIT(E) while rejecting the application of the assessee are curable in nature and considering the peculiar facts of the case that the assessee has already applied for Registration as per Rajasthan Public Trust Act. Thus, considering that aspect of the matter the liberal view of the matter is required to be taken in this case as the defect pointed out are not that much serious and a chance is given to the assessee to cure the defects pointed out by the ld. CIT(E). Considering this aspect of the case, the Bench does not want to go into merit of the case but it is imperative that the assessee must be provided adequate opportunity of being heard and be given a fair chance by the ld. CIT(E) to cure the defect / non submission of the certain information. It is also noteworthy to mention that approval u/s 80G cannot be granted without registration u/s 12AB of the Act. In view of the above, both the appeals of the assessee relating to Section 12AA and 80G of the Act are restored before the ld. CIT(E) for afresh consideration - Appeals of the assessee allowed for statistical purposes.

Summary

Issues:
1. Delay in filing appeals for condonation.
2. Rejection of final registration under sections 12AB and 80G of the Income Tax Act, 1961.

Detailed Analysis:

Issue 1: Delay in filing appeals for condonation
The appeals in ITA No. 331 & 332/Jodh/2023 were delayed by 7 days. The assessee sought condonation of delay due to the receipt of a common order related to final registration under sections 12A/12AB and 80G after the Rakhi Festival. The assessee filed an affidavit supporting the condonation request. The assessee explained that the delay was unintentional due to festive and ceremonial obligations. The AR argued for a liberal approach citing judicial precedents, including a Supreme Court case. The DR opposed but left the decision to the court. The tribunal, considering the unintentional delay, condoned the 7-day delay.

Issue 2: Rejection of final registration under sections 12AB and 80G
The assessee's appeals challenged the rejection of final registration under sections 12AB and 80G of the Income Tax Act, 1961. The rejection was based on non-registration under the Rajasthan Public Trust Act and incomplete submission of required details. The AR contended that the reasons for rejection were curable, and the assessee had applied for registration under the Rajasthan Public Trust Act. The DR supported the CIT(E)'s orders, citing non-submission of necessary details. The tribunal observed that the reasons for rejection were curable and directed the assessee to provide the necessary information/documents to rectify the defects. It emphasized the need for the assessee to be given a fair chance to cure the deficiencies. The appeals were restored before the CIT(E) for fresh consideration, highlighting the interdependence of approval under section 80G on registration under section 12AB. The tribunal clarified that its decision did not reflect on the merits of the dispute, leaving the adjudication to the CIT(E) independently.

In conclusion, the appeals of the assessee in ITA No. 331/Jodh/2023 and ITA No. 332/Jodh/2023 were allowed for statistical purposes, with the matter restored to the file of the CIT(E) for reevaluation.