2024 (10) TMI 920 - AT - Income Tax

Rejection of application for registration u/s 12A(1)(ac)(iii) - assessee appellant has not complied with notices served mainly through ITBA portal - HELD THAT - In the case of Amrut Antimdham Charitable Trust 2024 (7) TMI 444 - ITAT AHMEDABAD had observed that where assessee-trust failed to file documentary evidences to enable Commissioner to be satisfied about genuineness of activities of assessee and to verify if its activities were in consonance with its objects, Commissioner was justified in rejecting application for registration u/s 12AB as not maintainable in law. As per the amended mandate, under the provisions of Section 12A(1)(ac)(iii) of the Act where the trust or institution has been provisionally registered u/s 12AB of the Act, has to make an application for registration u/s 12AB within six months of commencement of activities. In the absence of required submission from the applicant it is not possible for the CIT(E) to ascertain that the activities carried out by the applicant are in accordance with its objects and genuineness in consonance with the stated objects as per MoA. In the present case, the CIT(E) clearly recorded that the assessee failed to furnish any detail pursuant to the notices dated 13.11.2023; 22.12.2023 and 09.01.2024. In the absence of any details, CIT(E) was unable to satisfy himself with the genuineness of the activities carried out by the assessee. In the absence of any details before the CIT(E), the grounds raised by the assessee are found to be devoid of merits and the case law relied by the assessee are not applicable in the facts of the present case. PCIT while considering applications for grant of registration u/s 12AA, is not bound to examine not only objects of institutions or society trust, to ascertain genuineness, he is also free to call for books of accounts or other such documents for recording satisfaction where society, trust or institution genuinely seeks to achieve object which it professes. AR contention that appellant has been carrying out such charitable activities which has been discernible with the expenditure incurred and source of funds thereof. In our view, the appellant is required to produce the desired details as show caused by the Ld. CIT(E) to arrive at the necessary satisfaction on charitable objectives viz-a-viz genuineness of activities as per the MoA. We set aside the impugned order of CIT(E) and direct him CIT(E) to pass a de novo order in accordance with law after providing reasonable opportunity to the assessee and after giving due consideration to the submissions made by the assessee. We specifically direct CIT(E) to give findings on charitable objects of the assessee trust and on genuineness of the charitable activities of the assessee. Appeal filed by the assessee s is allowed for statistical purposes.

Summary

Issues:
Challenge to rejection of application for registration u/s 12A(1)(ac)(iii) of the Act.

Analysis:
The appeal was filed against the rejection of the application for registration u/s 12A(1)(ac)(iii) of the Act by the Commissioner of Income Tax (Exemptions), Chandigarh. The appellant raised grounds of appeal, arguing that the rejection was improper due to alleged non-compliance with notices served through the ITBA portal and lack of proper opportunity given. The delay in filing the appeal was explained as being due to health issues of the appellant, which was condoned, and the appeal was admitted on merits.

The Commissioner rejected the application citing non-compliance with notices issued through the ITBA portal. The appellant argued that no questionnaire was received and requested the matter to be restored for a fresh decision after providing a proper opportunity to be heard. The Commissioner's decision was supported by the Deputy Commissioner. The Tribunal examined the details of notices issued and found that the appellant had not provided the required information despite multiple opportunities, leading to the rejection of the application. The Tribunal cited various judicial precedents supporting dismissal for non-compliance and lack of diligence on the part of the assessee.

The appellant contended that notices were not received due to incorrect email addresses on the ITBA portal, but failed to provide substantial evidence to support this claim. The Deputy Commissioner argued that it was the appellant's responsibility to update their contact information on the portal. The Tribunal referred to previous judgments and upheld the rejection of the application due to lack of factual evidence and non-compliance with statutory notices.

The Tribunal referred to a previous case where the failure to provide documentary evidence led to the rejection of the application. It was emphasized that the appellant needed to demonstrate the genuineness of their activities in line with their stated objectives. The Tribunal set aside the Commissioner's order and directed a fresh decision to be made after providing a reasonable opportunity to the appellant and considering their submissions. The appeal was allowed for statistical purposes, and the matter was remanded back to the Commissioner for further proceedings.

In conclusion, the Tribunal's decision highlighted the importance of compliance with statutory notices and the need for appellants to provide sufficient evidence to support their claims. The case underscores the significance of natural justice and the right to be heard in matters of registration under the Income Tax Act.