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2025 (3) TMI 863 - AT - Income TaxRejection of application u/s 12AB(1)(b) - rejection of the application for approval u/s 80G - CIT(E) has cancelled the provisional registration of the assessee for the reason that the assessee trust had failed to give proper justification for regularization of provisional registration. HELD THAT - It may be noted that assessee submitted that the assessee trust has applied for registration under RPT Act 1959 before the competent authority and the assessee trust is likely to get the same. Therefore we restore the matter back to the file of the ld. CIT(E) with the direction that as and when the assessee trust produces the copy of the Registration under RPT Act 1959 then the application of the assessee trust for registration u/s 12AA of the Act be decided afresh in accordance with law. Assessee trust is also directed to produce the complete Form 10AB and produce the documents relating to the genuineness of the activities before the CIT(E) Since we have restored the appeals of the assessee with regard to the registration u/s 12AA to the file of the ld. CIT(E) for afresh adjudication therefore the outcome of appeals of the assessee u/s 80G of the Act are consequential in nature.
ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment are:
ISSUE-WISE DETAILED ANALYSIS 1. Rejection of Section 12AB Registration Relevant legal framework and precedents: Section 12AB of the Income Tax Act, 1961, deals with the registration of trusts for tax exemption purposes. The CIT (Exemption) can reject an application if not satisfied with the genuineness of activities or compliance with legal requirements. Court's interpretation and reasoning: The Court noted that the CIT (Exemption) rejected the registration application due to an incomplete Form 10AB, non-compliance with the Rajasthan Public Trust Act, 1959, and doubts about the genuineness of activities. Key evidence and findings: The CIT (Exemption) observed that the assessee failed to provide adequate justification for the regularization of provisional registration. Application of law to facts: The Court found that the provisional registration was rightly canceled as the assessee did not fulfill the necessary conditions. Treatment of competing arguments: The assessee argued for a lack of opportunity to be heard. The Court acknowledged this but emphasized the need for compliance with the Rajasthan Public Trust Act, 1959. Conclusions: The Court decided to restore the matter to the CIT (Exemption) to allow the assessee to provide the necessary documents and complete Form 10AB. 2. Rejection of Section 80G Approval Relevant legal framework and precedents: Section 80G of the Income Tax Act, 1961, provides for tax deductions on donations to certain approved institutions. Approval under Section 80G requires prior registration under Section 12AB. Court's interpretation and reasoning: The CIT (Exemption) rejected the application for approval under Section 80G due to the absence of registration under Section 12AB. Key evidence and findings: The CIT (Exemption) noted that without Section 12AB registration, Section 80G approval could not be granted. Application of law to facts: The Court found the rejection justified as the prerequisite registration under Section 12AB was not in place. Treatment of competing arguments: The assessee's argument regarding the lack of opportunity was considered but did not alter the requirement for Section 12AB registration. Conclusions: The Court held that the outcome of the Section 80G appeals is contingent on the resolution of the Section 12AB registration issue. 3. Condonation of Delay Relevant legal framework and precedents: The Court considers the condonation of delay based on sufficient cause preventing timely filing. Court's interpretation and reasoning: The Court found no sufficient cause for the delay in filing appeals, as the reasons provided by the assessee were deemed inadequate. Key evidence and findings: The assessee cited confusion over legal remedies and recent changes in trust-related laws as reasons for the delay. Application of law to facts: The Court dismissed the applications for condonation of delay but proceeded to hear the appeals on merit to ensure substantial justice. Conclusions: The delay was not condoned, but the appeals were heard on their merits. 4. Principles of Natural Justice Relevant legal framework and precedents: The principles of natural justice require that parties be given an opportunity to present their case. Court's interpretation and reasoning: The Court acknowledged the assessee's claim of not being heard but emphasized the need for compliance with statutory requirements. Key evidence and findings: The assessee claimed inadequate opportunity to present its case before the CIT (Exemption). Application of law to facts: The Court restored the matter to the CIT (Exemption) to provide the assessee an opportunity to present the necessary documentation. Conclusions: The Court directed the CIT (Exemption) to reconsider the applications upon submission of the required documents by the assessee. SIGNIFICANT HOLDINGS
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