2024 (8) TMI 350 - AT - Income Tax

Rejection of the application Form No. 10AB u/s 12AB 80G(5) - HELD THAT - Assessee institute had remained divested of sufficient opportunity to put forth its case and furnish the requisite details in the course of the proceedings before the CIT(E), therefore, the matter requires to be revisited by the latter. Accordingly, we herein restore the matter to the file of the CIT(Exemption), Bhopal with a direction to re-adjudicate the same. Needless to say, the CIT(Exemption), Bhopal shall pass a fresh order after affording a reasonable opportunity of being heard to the assessee institute. Thus, the Ground of appeal raised by the assessee institute is allowed for statistical purposes in terms of the aforesaid observations. As we have restored the matter to the file of the CIT(Exemption), Bhopal with a direction to re-adjudicate the same, therefore, we refrain from adverting to and therein adjudicating the contentions advanced by the Ld. AR as regards the merits of the case before us. Appeal of the assessee institute is allowed for statistical purposes.

Summary

Issues Involved:
Appeal against rejection of application for registration u/s.12AB and u/s.80G(5) of the Income-tax Act, 1961.

Analysis:

Issue 1: Rejection of Application for Registration u/s.12AB
The assessee, a CSR funded institute, challenged the rejection of its application for registration u/s.12AB. The CIT(Exemption) issued a show cause notice (SCN) highlighting commercial nature of the activities, exceeding 20% receipts from commercial activities, and receiving CSR donations without registration. The assessee argued lack of opportunity to respond adequately to the queries. The Tribunal found that the assessee was deprived of a fair opportunity to present its case. The matter was remanded to the CIT(Exemption) for re-adjudication, emphasizing the need for a fresh order after affording a reasonable opportunity to the assessee.

Issue 2: Rejection of Application for Registration u/s.80G(5)
The rejection of the application for registration u/s.80G(5) mirrored the issues in the u/s.12AB appeal. The Tribunal applied the same reasoning as in the u/s.12AB appeal and remanded the matter to the CIT(Exemption) for re-adjudication. The Tribunal directed the CIT(Exemption) to pass a fresh order after providing a fair opportunity for the assessee to be heard.

Conclusion:
Both appeals by the assessee institute were allowed for statistical purposes, with the matters remanded to the CIT(Exemption) for re-adjudication. The Tribunal emphasized the importance of affording the assessee a fair opportunity to present its case and directed the CIT(Exemption) to pass fresh orders after due consideration.