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2025 (1) TMI 1406 - AT - Income TaxDenial of registration u/s.12A(1)(ac)(iii) AND u/s. 80G(5)(iii) - Whether assessee society was provided with adequate opportunity to present the requisite documents? - HELD THAT - In case the failure of the assessee society for no justifiable reason to furnish the requisite details/documents that were called for by the CIT(Exemption) for processing its application for registration is condoned then it would become a precedent for others to not participate before the CIT(Exemption) and furnish the requisite details/documents before him and thereafter use the Tribunal as a forum for seeking restoration of the matter and allowing of an another innings before the CIT(Exemption) which we are afraid cannot be allowed. We thus finding no infirmity in the view taken by the CIT(Exemption) Bhopal uphold his order. CIT(Exemption) Bhopal had afforded three opportunities to the assessee society to furnish the documents/details hereinabove it had failed to avail therefore we find no substance in the Ld.AR s claim that the order of rejection of the assessee s application u/s. 12AB of the Act had been passed without affording of an adequate opportunity to the assessee society and thus reject the same. Decided against assessee.
ISSUES PRESENTED and CONSIDERED
The primary issues considered in this judgment were:
ISSUE-WISE DETAILED ANALYSIS 1. Rejection of Registration under Section 12A(1)(ac)(iii) Legal Framework and Precedents: Section 12AB of the Income-tax Act outlines the procedure for fresh registration of trusts or institutions. The Commissioner is required to verify the genuineness of the activities and compliance with applicable laws before granting registration. Court's Interpretation and Reasoning: The Tribunal noted that the Commissioner had provided the assessee society with three separate opportunities to submit the necessary documents and information. Despite these opportunities, the assessee failed to comply or request additional time. Key Evidence and Findings: The Commissioner issued letters on 08.08.2024, 23.09.2024, and 03.10.2024, fixing hearings for 17.09.2024, 30.09.2024, and 15.10.2024, respectively. No replies were received from the assessee for any of these hearings. Application of Law to Facts: The Tribunal found that the assessee's failure to provide the requisite documents impeded the Commissioner from fulfilling his statutory duty to verify the genuineness of the activities and compliance with the law. Treatment of Competing Arguments: The assessee argued that due to preoccupations with audit finalizations, it could not comply with the requests. However, the Tribunal found this explanation insufficient, especially since no adjournment was sought. Conclusions: The Tribunal upheld the Commissioner's decision to reject the application due to the assessee's non-compliance and lack of justifiable reasons for failing to provide the necessary documentation. 2. Rejection of Registration under Section 80G(5)(iii) Legal Framework and Precedents: Section 80G(5)(iii) of the Income-tax Act involves the registration of institutions for tax-exempt donations, contingent upon the verification of activities and compliance with applicable laws. Court's Interpretation and Reasoning: The Tribunal applied the same reasoning as with the Section 12A(1)(ac)(iii) application, noting that the facts and circumstances were identical. Key Evidence and Findings: The lack of response to the Commissioner's requests for documentation and the absence of any adjournment requests were again highlighted. Application of Law to Facts: The Tribunal emphasized the statutory obligation of the Commissioner to verify the genuineness of activities and compliance with laws, which was hindered by the assessee's non-compliance. Treatment of Competing Arguments: The assessee's arguments regarding preoccupation with audits were dismissed as insufficient justification for non-compliance. Conclusions: The Tribunal upheld the rejection of the application under Section 80G(5)(iii) due to the same reasons as those for the Section 12A(1)(ac)(iii) application. SIGNIFICANT HOLDINGS Core Principles Established: The Tribunal reaffirmed the importance of compliance with procedural requirements in applications for registration under the Income-tax Act. It emphasized that applicants must provide necessary documentation and information when requested by the Commissioner to enable proper verification of activities and compliance with laws. Final Determinations on Each Issue: Both appeals by the assessee society were dismissed. The Tribunal found no infirmity in the Commissioner's orders rejecting the applications for registration under Sections 12A(1)(ac)(iii) and 80G(5)(iii) due to the assessee's non-compliance and lack of justifiable reasons for failing to provide the requisite documentation.
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