2023 (3) TMI 720 - AT - Income Tax

Grant of registration under section 12AB 80G(5)(ii) denied - Cancellation of registration u/s 12A(1)(ac)(iii) and cancellation of application u/s 12AB (1) - HELD THAT - The assessee specifically mentioned that assessee has suffered technical glitches for submission of the documents before the revenue. Assessee was not able to perform his duty for submission of the relevant evidence before the CIT(E). We find that there is a reasonable opportunity was denied for the assessee to submit its claim. Thus, we are of the considered opinion that application filed by the assessee trust under section12A(1)(ac)(iii) 12AB(1)were not properly considered for grant of registration under section 12AB 80G(5)(ii) of the Act. Accordingly, we direct the ld. CIT(E) to de novo consider the application of the assessee trust applied under section 12A(1)(ac)(iii) 12AB(1) of the Act and grant the registration as per law. Needless to say, the assessee should get a reasonable opportunity of hearing in set aside proceeding before the ld. CIT(E).

Summary

Issues involved:
The judgment involves appeals against orders of the ld. Commissioner of Income Tax (Exemptions) related to rejection of applications for registration under sections 12A(1)(ac)(iii) and 80G of the Income Tax Act 1961.

Issue 1: Registration under section 12AB(1)(b) of the Act
The appellant Society challenged the rejection of their application for registration under section 12AB(1)(b) by the CIT(E) citing non-compliance issues. They argued that there was a lack of adverse findings regarding the aims, objects, and genuineness of their activities. The appellant contended that they should be granted registration under section 12AB(1)(b).

Issue 2: Registration under Clause (ii) of second proviso to sub-section (5) of section 80G
Similarly, the appellant Society contested the rejection of their application for registration under Clause (ii) of the second proviso to sub-section (5) of section 80G, asserting non-compliance on the part of the assessee. They highlighted issues with notices not being served, requests for adjournment not being granted, and technical glitches preventing timely submission of documents.

Judgment Details:
The appeals were filed against the orders of the ld. CIT(E) regarding the cancellation of registration under section 12A(1)(ac)(iii) and application under section 12AB(1). The appellant, a welfare society, had applied for registration under section 12A(1)(ac)(iii) and for registration under section 80G. The ld. CIT(E) rejected both applications ex parte as the assessee did not appear for the hearing.

During the appeal, the appellant's counsel argued that notices were not served, and technical issues prevented timely submission of documents. The counsel emphasized that the appellant was not given a reasonable opportunity to present their case. The documents supporting the appellant's claims were submitted after the hearing date due to technical glitches.

After considering the submissions, the Tribunal found that the appellant was not afforded a fair opportunity to present their case. It directed the ld. CIT(E) to reconsider the applications for registration under sections 12A(1)(ac)(iii) and 12AB(1) and grant registration as per law, ensuring the appellant receives a reasonable opportunity for a hearing.

The Tribunal noted that similar facts applied to other cases and ordered accordingly. Ultimately, the appeals of the assessees were allowed for statistical purposes, with the order pronounced in open court on 15.03.2023.