9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2025 (3) TMI 1368 - AT - Income TaxRejecting the application for final registration u/s 12AB and cancelling the provisional registration granted u/s 12A(1)(ac)(vi) - HELD THAT - In the present case the assessee was granted provisional registration on 27.10.2021 and it was required to file Form 10AB by 26.04.2024 (six months before expiry). The application was filed late on 29.06.2024. While the delay is not substantial the failure to respond to notices issued by the CIT(E) contributed to the rejection of registration. The submissions of both parties and examined the records. It is evident that the assessee filed Form 10AB late beyond the prescribed due date. CIT(E) issued two notices which remained unanswered by the assessee. CIT(E) however did not discuss or examine the documents already submitted by the assessee along with Form 10AB. DR did not object to remanding the matter back to the CIT(E) for fresh consideration. As per the provisions of Section 12A(1)(ac) of the Act the correct form for final registration after obtaining provisional registration under Section 12A(1)(ac)(vi) is Form 10AB and not Form 10A. The assessee had already been granted provisional registration and therefore Form 10AB was the appropriate form to be filed for final registration. The contention of the AR that Form 10A should have been filed is misplaced and does not hold merit. We also note that the CIT(E) has committed a procedural lapse by not addressing the evidence that was already on record before rejecting the application. The mere non-response to notices cannot be the sole basis for rejection if relevant documents were available in the assessment file. A fair assessment would require an evaluation of all materials submitted before reaching an adverse conclusion. The assessee s failure to respond to notices caused unnecessary delays in the proceedings. Non-cooperation with the regulatory authority is not a practice that can be condoned without consequences. To balance the equities we find it just and appropriate to impose a cost of Rs.10, 000/- on the assessee for its non-responsiveness while setting aside the order of the CIT(E). We set aside the order of the CIT(E) and restore the matter back to the CIT(E) for fresh consideration. Assessee is allowed for statistical purposes.
ISSUES PRESENTED and CONSIDERED
The core legal issues considered in this judgment are:
ISSUE-WISE DETAILED ANALYSIS 1. Rejection of Application and Cancellation of Provisional Registration Relevant Legal Framework and Precedents: The rejection and cancellation were based on the provisions of Section 12A(1)(ac) of the Income Tax Act, 1961, which governs the registration of charitable trusts. The Finance Act, 2020, introduced specific procedures for registration and re-registration of trusts. Court's Interpretation and Reasoning: The Tribunal noted that the rejection was primarily due to the assessee's failure to respond to notices. However, it also observed that the CIT(E) did not examine the documents already submitted by the assessee, which was a procedural lapse. Key Evidence and Findings: The assessee had submitted necessary documents with Form 10AB, including the registration certificate, PAN card, trust deed, past 12A certificate, and audit reports. The CIT(E) failed to consider these documents before rejecting the application. Application of Law to Facts: The Tribunal found that the CIT(E) should have evaluated the submitted documents before making a decision. The non-response to notices alone was insufficient to justify rejection. Treatment of Competing Arguments: The Tribunal balanced the arguments by acknowledging the procedural lapse by the CIT(E) and the non-cooperation by the assessee. It decided to remand the matter for fresh consideration while imposing a cost on the assessee for non-responsiveness. Conclusions: The Tribunal concluded that the rejection and cancellation were not fully justified due to procedural lapses and remanded the matter to the CIT(E) for reconsideration. 2. Procedural Error in Filing Form 10AB Relevant Legal Framework and Precedents: The Finance Act, 2020, specifies the forms to be used for registration processes under Section 12A. Form 10AB is required for final registration after provisional registration. Court's Interpretation and Reasoning: The Tribunal clarified that Form 10AB was the correct form for final registration, not Form 10A. The AR's contention that Form 10A should have been filed was found to be without merit. Key Evidence and Findings: The Tribunal noted that the assessee had been granted provisional registration and was required to file Form 10AB for final registration. Application of Law to Facts: The Tribunal determined that the filing of Form 10AB was appropriate and that the procedural error claimed by the AR did not exist. Treatment of Competing Arguments: The Tribunal dismissed the AR's argument regarding the filing of an incorrect form, reinforcing that Form 10AB was correctly filed. Conclusions: The Tribunal concluded that there was no procedural error in filing Form 10AB, and the AR's contention was misplaced. SIGNIFICANT HOLDINGS Preserve verbatim quotes of crucial legal reasoning: "The mere non-response to notices cannot be the sole basis for rejection if relevant documents were available in the assessment file." Core principles established: The Tribunal emphasized the importance of evaluating all submitted materials before reaching an adverse decision and the need for procedural fairness in administrative processes. Final determinations on each issue: The Tribunal set aside the CIT(E)'s order and remanded the matter for fresh consideration, directing the CIT(E) to pass a reasoned order after considering all materials and providing the assessee with a fair opportunity to be heard. The assessee was directed to pay a cost of Rs. 10,000 for non-responsiveness.
|
