2024 (2) TMI 105 - AT - Income Tax

Denial of registration u/s. 12AB(1)(ac)(vi) and approval u/s.80G(5)(iv) - Standard Operative Procedure - Shorter period given to reply - non disposal of adjournment petition - denial of natural justice - as submitted CIT, Exemption without disposing of the adjournment petition sought by the appellant had proceeded with the disposing of the application - HELD THAT - As appellant was asked to furnish certain information requesting the appellant society to file the details on or before 18.10.2023 thereby giving a short period of time i.e. less than one week, which is against the Standard Operative Procedure ( SOP ) issued by the CBDT dated 19.11.2020, wherein, minimum period of 15 days is required to be given to the assessee to comply with notices u/s 142(1) from the date of issue of the notice. Recently, in the case of Dauphin Travel Marketing Private Limited 2023 (7) TMI 1355 - DELHI HIGH COURT taking note of this SOP held that the grant of insufficient time to respond the notice violates the principles of natural justice and, therefore, set-aside the assessment. Thus, it is clear that the appellant was given unreasonably very short period of time to respond to the notice, which is against the principles of natural justice. We find that the approach adopted by the ld. CIT, Exemption is unreasonable and violates of the principles of natural justice. In the circumstances, we are of the considered opinion that it is a fit case to remand the matter to the file of ld. CIT, Exemption for de novo consideration in accordance with law.

Summary

Issues involved: Denial of registration u/s. 12AB(1)(ac)(vi) and approval u/s.80G(5)(iv) of the Income Tax Act, 1961.

Summary:

Issue 1: Denial of registration u/s. 12AB(1)(ac)(vi)
The appellant, a trust running educational institutions, applied for registration u/s 12AB of the Act. The CIT, Exemption denied the registration without disposing of the adjournment petition, leading to the cancellation of provisional registration. The appellant challenged this denial, citing insufficient time given to respond to the notice, which violated principles of natural justice. The ITAT Pune found the approach adopted by the CIT, Exemption to be unreasonable and in violation of natural justice principles. Considering this, the matter was remanded back to the CIT, Exemption for de novo consideration in accordance with the law. The appeal against the denial of approval u/s. 80G was also remitted back due to the circumstances. Both appeals of the assessee were partly allowed.

Issue 2: Denial of approval u/s. 80G(5)(iv)
The denial of approval u/s. 80G was challenged by the appellant along with the denial of registration u/s. 12AB. The ITAT Pune, after finding the denial of registration to be unreasonable and against natural justice principles, remanded both matters back to the CIT, Exemption for fresh consideration. The appeals of the assessee were partly allowed, and the orders were pronounced on January 30th, 2024.