2021 (12) TMI 364 - AT - Income Tax

Exemption u/s 11 - application for grant of registration u/s 12AA rejected - HELD THAT - We find on a reading of the written submissions in the paper book on record that how that the assessee trust is claimed to be performing Yajnas and running a Goshala . How these activities justify the grant of Registration is to be demonstrated by the assessee. It is also found stated on behalf of the assessee that Registration Application u/s 12AA along with all the supporting documents was filed. Admittedly the assessee could not participate in the proceedings. We also note that the Ld. CIT(E) also did not care to mention any relevant fact. In as much as even the stated Aims and the Objects of the Trust and the supporting documents claimed to have been filed have remained unaddressed. The assessee cannot be allowed to absolve himself of all responsibilities and alternately shift the burden on the tax authorities expecting them to run helter skelter and gather evidences which the assessee seeks to rely upon. The onus placed upon the party seeking Registration cannot be allowed to be struck off on the specious plea that the assessee is unable to assist. In the absence of proper compliances etc before the Ld. CIT(Exemption) on the part of the assessee it is made clear that the Ld. CIT(A) (E) shall be at liberty to pass an order on the basis of material available on record. Hence, the opportunity so provided in good faith, it is hoped is not abused and utilized fairly by the assessee.

Summary

Issues:
Appeal against rejection of registration u/s 12AA of the Income Tax Act, 1961.

Detailed Analysis:
The appeal was filed by the assessee challenging the order passed by the CIT, Exemption Lucknow, regarding the rejection of registration under section 12AA for the assessment year 2017-18. The grounds raised by the assessee included contentions about the rejection being arbitrary, against the provisions of law, and not in line with the facts of the case. The assessee was not present during the hearing, but a written request was submitted emphasizing the inability to afford a senior lawyer and requesting a decision based on written submissions and evidence. The order highlighted that the applicant society failed to produce books of accounts, bank statements, and vouchers for verification of claimed expenses and charitable activities. As per section 12AA(1)(b) of the Act, both the charitable purpose and genuineness of activities needed to be proven for registration, which the applicant failed to do.

Upon review, it was noted that the assessee could not participate in the proceedings, and relevant facts, including the aims and objects of the trust, were not adequately addressed. The activities of the trust, such as performing Yajnas and running a Goshala, were mentioned, but the justification for registration based on these activities was not demonstrated. The application for registration was filed online, and delays in processing were attributed to the competent authority. Contradictions in the facts presented raised concerns, leading to the decision to set aside the order and remand it back to the CIT (Exemption) for a more comprehensive review.

The Tribunal emphasized the importance of full participation by the assessee and the submission of all necessary documents to discharge the onus of proof required for registration. The responsibility cannot be shifted solely to tax authorities, and the assessee must ensure proper compliance and document submission. Failure to meet these requirements may result in the CIT(E) passing an order based on available records. The order was set aside with directions for a more detailed examination of facts, ensuring a fair opportunity for the assessee to present their case. The appeal was allowed for statistical purposes, emphasizing the need for compliance and fair utilization of the opportunity provided.