2023 (7) TMI 6 - AT - Income Tax

Exemption u/s 11 - application for registration of Trust u/s 12AB rejected - CIT(E) dismissed the application of the assessee by holding that the assessee has furnished incomplete details, despite several opportunities - as argued by assessee application was rejected without giving adequate opportunity to the assessee / applicant to present its case on merits HELD THAT - As in view of the facts as noted above, in the interest of justice, the case is being set-aside to the file of Ld. CIT(Exemption) for denovo consideration of the application of the assessee Trust for registration u/s 12AB and to pass appropriate orders after considering the documents filed by the applicant / assessee in accordance with law. Hence, the matter is being set-aside to the file of Ld. CIT(Exemption) with the above direction.

Summary

Issues involved:
The appeal against the order rejecting the application for registration of Trust under Section 12AB of the Income Tax Act, 1961 on the grounds of non-satisfaction of genuineness of trust activities.

Issue 1: Rejection of application under Section 12AB

The assessee's application for registration of Trust under Section 12AB was dismissed by the CIT(Exemption) due to incomplete details provided by the assessee. The CIT observed that despite numerous opportunities, the applicant failed to submit the required details, leading to a lack of verification of the trust's activities. The CIT emphasized the importance of establishing the genuineness of trust activities in accordance with its objects, as mandated by Section 12AB. The CIT cited the judgment in the case of Commissioner of Income-tax, Ujjain Vs Dawoodi Bohara Jamat to support the requirement for compliance with the law. The applicant's failure to provide documentary evidence hindered the CIT's ability to verify the genuineness of the trust's activities, resulting in the rejection of the application.

Issue 2: Appeal and Set-Aside Decision

The assessee appealed against the order of the CIT(Exemption), arguing that they are eligible for registration under Section 12AB and were not given adequate opportunity to present their case. The Counsel for the assessee requested a de novo consideration of the application, stating that they would provide all necessary documents to support their eligibility. The Ld. D.R. did not object to setting aside the matter for a fresh consideration by the CIT(Exemption) in the interest of justice. Consequently, the Tribunal decided to set-aside the case to the file of the CIT(Exemption) for a fresh review of the application for registration under Section 12AB, with directions to consider the documents submitted by the applicant in accordance with the law. The appeal of the assessee was allowed for statistical purposes.

This judgment highlights the importance of providing complete and genuine details when applying for registration under Section 12AB of the Income Tax Act, 1961. It also underscores the right of the applicant to a fair opportunity to present their case and submit necessary documents for consideration.