2024 (11) TMI 223 - AT - Income Tax

Rejecting the application u/s 12A for approval of the Appellant Trust - Charitable activity - Trust Deed copy submitted was not self- certified Rule 17A(2)(a) by the trustee, which is an inadvertent error, Details of date place of each activity were not furnished by the Trust and Details of donation received were not supported by complete postal address/ PAN of the donors HELD THAT - We find that the assessee is a trust carried on charitable activities like arrangement of food for conducting pooja and relief to poverty. The activities are for the benefit of public at large - There is no reference of the information submitted on that date in the order of the ld CIT (E) , thus, it is true that the learned CIT(E) has issued the show cause notice on 01.02.2024 but there is no reference of the details submitted on 12.01.2024 and how same is dealt with by the learned CIT(E). The observation of the CIT(E) has raised seven points which was not stated to have been replied by the assessee and, therefore, it was held that the learned CIT(E) was not able to draw any satisfactory conclusion about the genuineness of the activities and compliance of requirement of any other law. Regarding the genuineness of the activities the assessee has provided the details of various expenditure of various activities for the year ended on 31.03.2022 wherein the total expenditure of Rs. 15,75,738/- were spent. The assessee has also spent sum of Rs. 12,74,626/- for the year ended on 31.03.2023 on the object of the trust. There is no comment by the learned CIT(E) on the activities of the assessee stated in these documents. We restore the matter back to the file of the learned CIT(E) to decide the issue afresh. Appeal of the assessee is allowed for statistical purposes.

Summary

Issues:
Regularization of Registration u/s. 12AA & Form No. 10AB rejection, Grounds of Appeal, Compliance with CIT(E) notices, Discrepancies in information submission, Appeal outcome.

Analysis:
The appeal concerns the rejection of regularization of Registration u/s. 12AA and Form No. 10AB by the learned Commissioner of Income Tax (Exemption) [CIT(E)]. The Assessee, a charitable trust, raised two grounds of appeal challenging the rejection. The first ground highlighted errors in the submission process, including the lack of self-certified Trust Deed, incomplete details of activities, unsupported donation details, and oversight of submissions. The second ground contested the CIT(E)'s inability to draw satisfactory conclusions about the genuineness of activities and compliance with relevant laws. The brief facts reveal the CIT(E) issued multiple notices requesting information, granted adjournments, and ultimately dismissed the application due to discrepancies and non-compliance by the Assessee.

The Assessee, represented by the Authorized Representative (AR), submitted a detailed paper book to support their case, emphasizing compliance with CIT(E) notices, the nature of activities, and the inadvertent error in not submitting a self-certified Trust Deed. The AR argued that all required information had been provided, urging the CIT(E) to consider the submitted details before making a decision. Conversely, the Departmental Representative (DR) supported the CIT(E)'s decision, citing the Assessee's failure to respond to specific points in the order as grounds for rejection.

Upon review, the Appellate Tribunal found that the Assessee engaged in charitable activities benefiting the public, such as providing food and relief to the impoverished. Notably, the Tribunal observed that the CIT(E) did not reference the details submitted by the Assessee on 12.01.2024 in the rejection order. The Tribunal acknowledged the Assessee's expenditure on trust objectives for the relevant years, which the CIT(E) did not comment on in the order. Consequently, the Tribunal directed the matter back to the CIT(E) for a fresh decision, instructing the Assessee to address the CIT(E)'s observations and emphasizing timely and comprehensive compliance with future notices.

In conclusion, the Tribunal allowed the Assessee's appeal for statistical purposes, emphasizing the need for the Assessee to address the CIT(E)'s concerns and comply diligently with procedural requirements in the future.