2025 (3) TMI 24 - AT - Income Tax

Rejection of registration u/s 12A and rejection of approval u/s.80G(5) - As in the absence of the copy of provisional registration granted u/s12A(1)(ac)(vi) of the Act the application was non-maintainable - HELD THAT - CIT(E) had rightly noticed that the registration u/s 12A(1)(ac)(iii) could have been granted only if the assessee had a provisional registration certificate u/s 12AB. The assessee had enclosed provisional registration granted u/s 10(23C)(vi) of the Act in Form No. 10AC along with the application. Accordingly the Ld. CIT(E) had issued a show cause notice to the assessee to rectify this defect which was not complied. Therefore he had rejected the application for registration u/s.12A of the Act. It is found that the provision of section 12A(1)(ac)(iii) of the Act has since been amended w.e.f. 01.10.2024 as per which the registration u/s.12A of the Act can be allowed on the basis of provisional approval u/s 10(23C)(vi) of the Act. We deem it proper to set aside the matter to the file of the Ld. CIT(E) with a direction to allow another opportunity of being heard to the assessee to rectify the defect in the application as noticed by him. The Ld. CIT(E) is also free to consider the application of the assessee on the basis of provisional approval u/s 10(23C)(vi) of the Act filed by the assessee along with the application in accordance with the amended provisions of the section. Application for registration u/s. 80G(5)(iii) - Since the matter regarding registration u/s.12A of the Act has been set aside to the file of the Ld. CIT(E) we deem it necessary to set aside the present matter as well to the file of the Ld. CIT(E) who will re-adjudicate the issue of approval u/s.80G of the Act after deciding the matter of registration u/s.12A of the Act.

Summary

The issues presented and considered in the judgment are as follows:1. Whether the delay in filing appeals against the rejection of registration under Section 12A of the Income Tax Act, 1961, and rejection of approval under section 80G(5) of the Act should be condoned.2. Whether the rejection of the application for registration under Section 12A of the Act was justified.3. Whether the rejection of the application for approval under section 80G(5) of the Act was justified.Issue-wise detailed analysis:1. The delay in filing appeals:The Court considered the reasons for the delay in filing the appeals, which were attributed to the Accountant's mistake in filing applications and subsequent confusion regarding the need for an appeal. The Court found that the trust was established for charitable purposes and engaged in social welfare activities. The applications were rejected on technical grounds, and the relevant provisions of the Act had been amended to make the applications eligible for registration. Considering these factors, the Court condoned the delay in filing the appeals.2. Rejection of registration under Section 12A:The Court noted that the application for registration was rejected due to the absence of a copy of the provisional registration granted under section 12AB of the Act. The Court observed that the relevant section had been amended to allow registration based on provisional approval under section 10(23C)(vi) of the Act. Therefore, the Court set aside the matter for the assessee to rectify the defect and directed the Commissioner to consider the application based on the amended provisions.3. Rejection of approval under section 80G(5):The rejection of approval under section 80G(5) was based on the prerequisite of registration under section 12A of the Act. Since the matter of registration under section 12A was set aside for reconsideration, the Court also set aside the issue of approval under section 80G(5) for the Commissioner to re-adjudicate after deciding on the registration matter.Significant holdings:- The Court allowed both appeals for statistical purposes, setting aside the rejections of registration under Section 12A and approval under section 80G(5) for reconsideration by the Commissioner.- The Court emphasized the importance of compliance with technical requirements for registration under the Income Tax Act and considered the amendments to the relevant provisions in making its decisions.Overall, the Court's decisions focused on rectifying technical errors in the applications for registration and approval, ensuring that the trust could continue its charitable activities in compliance with the amended provisions of the Act.