2024 (11) TMI 1251 - AT - Income Tax

Denial of registration u/s 12A - cancelling the provisional registration granted earlier - HELD THAT - It is the submission of assessee that given an opportunity, the assessee is in a position to file the requisite details as called for by the CIT(Exemption). We deem it proper to restore the issue to the file of the CIT(Exemption) with a direction to grant one final opportunity to the assessee to substantiate its case by filing the requisite details and decide the issue as per fact and law. Assessee is also hereby directed to appear before the CIT(Exemption) on the appointed date and file the requisite details without seeking any adjournment under any pretext, failing which the CIT(Exemption) is at liberty to pass appropriate order as per law. Appeal filed by the assessee is allowed for statistical purposes.

Summary

Issues:
1. Rejection of application for registration u/s 12A of the Income Tax Act, 1961.
2. Cancellation of provisional registration granted earlier.
3. Adequacy of opportunity granted to the assessee for submission of details.
4. Request for additional opportunity to present the case before the CIT(Exemption).
5. Failure to comply with requirements leading to rejection of application.
6. Restoration of the issue to the file of CIT(Exemption) for granting one final opportunity to the assessee.

Analysis:

The judgment revolves around the rejection of the assessee's application for registration under section 12A of the Income Tax Act, 1961, and the subsequent cancellation of the provisional registration. The CIT(Exemption) rejected the application due to the assessee's failure to provide explanations or submissions despite multiple opportunities. The CIT(Exemption) observed that the assessee did not comply with the provisions of the Income Tax Act and Rules, leading to doubts about the genuineness of the activities and compliance with relevant laws.

The assessee appealed the decision, arguing that it had requested additional time to submit the required information but was denied the opportunity to present its case adequately. The counsel for the assessee emphasized that more time was needed to compile the details requested by the CIT(Exemption) and requested another chance to submit the necessary documents to support the charitable activities carried out by the trust.

During the appeal, the Department strongly supported the CIT(Exemption)'s decision, highlighting that despite numerous opportunities, the assessee failed to provide the essential details, justifying the rejection of the application and cancellation of the provisional registration. However, the Tribunal considered the arguments from both sides and decided to restore the issue to the file of the CIT(Exemption) with a directive to grant one final opportunity to the assessee to submit the required details. The Tribunal emphasized that the assessee must appear before the CIT(Exemption) on the specified date and provide the necessary information without seeking adjournment, failing which the CIT(Exemption) could take appropriate action as per the law.

Ultimately, the Tribunal allowed the appeal filed by the assessee for statistical purposes, indicating that the decision was made to restore the issue to the CIT(Exemption) for providing the assessee with a final opportunity to substantiate its case by submitting the requisite details as per the law and facts of the case.