2022 (3) TMI 1132 - AT - Income Tax

Exemption u/s 11 - grant of registration u/s. 12AA denied - assessee has failed to provide required documents which are necessary for granting registration - HELD THAT - An application in Form No. 10A seeking registration u/s.12AA of the Act was filed by the assessee on 17.12.2019. A notice dated 16.03.2020 was issued to the assessee requiring to submit certain documents/explanations by 08.04.2020 alongwith original Trust Deed/MOA for verification. However, one more opportunity was provided to the assessee through which date of hearing was fixed on 17.06.2010 and when nobody appeared then dismissed the application of the assessee. From perusal of the record that sufficient opportunity of being heard was not provided to the assessee. When the documents was called from the assessee by the Ld. CIT(E) in the month of April 2020 to June, 2020, there was panic situation due to Covid-19 pandemic. Considering the totality of facts and circumstances of the case, one more opportunity should be granted to the assessee, therefore, we restore the matter back to the Ld. CIT(E) for passing the order afresh after providing due and reasonable opportunity of being heard as per law. The assessee is also directed to cooperate with the Ld. CIT(E) in disposing of the matter - Appeal of the assessee is allowed for statistical purposes only.

Summary

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

Analysis:
1. The appellant challenged the rejection of registration u/s. 12AA by CIT(E) on various grounds. The first ground was the alleged error in rejecting the application without sufficient opportunity to produce required documents. The appellant contended that the necessary documents were submitted along with the application in Form 10A.
2. The appellant further argued that the CIT(E) failed to consider the impact of the Covid-19 pandemic on the submission of documents within the specified timeline. The appellant cited a similar case from the ITAT Jodhpur Bench where additional opportunity was granted due to pandemic-related constraints.
3. The CIT(E) based the rejection on the non-submission of original documents establishing the trust/society, lack of evidence of the society's activities, and missing financial statements. The appellant, however, maintained that the submission of certified copies of relevant documents should suffice as per Rule 17A.
4. The appellant highlighted that subsequent registration u/s. 12A(1)(ac)(vi) was granted, further supporting their claim for registration u/s. 12AA. The appellant requested the direction for the grant of registration based on the subsequent approval.
5. The ITAT, after considering both parties' arguments and reviewing the case records, concluded that the CIT(E) had not provided sufficient opportunity for the appellant to present the required documents, especially considering the pandemic situation. Therefore, the matter was remanded back to the CIT(E) for a fresh decision after affording the appellant due and reasonable opportunity to be heard.

This detailed analysis covers the grounds of appeal, facts of the case, arguments presented by both parties, the basis of rejection by the CIT(E), and the final decision of the ITAT remanding the matter back to the CIT(E) for fresh consideration.