AACHARYA SHRI RUSHIRAJBABA PRATISTHAN,NAGPUR V. CIT, EXEMPTION , PUNE

ITA 592/NAG/2024

AI Insights

The case involves Aacharya Shri Rushirajbaba Pratishahan, the appellant, contesting the decision of the Commissioner of Income Tax (Exemption), Pune, which rejected their application for exemption under section 80G of the Income Tax Act, 1961 for the assessment year 2022-23. The primary contention was that the Commissioner erred in not considering the details provided by the assessee and unjustly rejected the application without sufficient opportunity for the assessee to be heard. The Tribunal found that the Commissioner had indeed provided multiple opportunities for the assessee to respond to the discrepancies noted in their application but noted that the assessee failed to comply adequately. The Tribunal, however, decided to set aside the Commissioner's order and remand the case for a fresh examination, emphasizing the need for a fair hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 24373 (ITAT-NAGPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2022-2023
• Laws Referred To: Income Tax Act, 1961, Income Tax Rules, 1962
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDIPKUMAR SALUNKE
• Assessee Lawyers: SHRISHTI PANDE
• Keywords: Set aside; Opportunity of being heard; Corroborative evidences; Tangible material
• Section: 12AA; 12A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI K.M. ROY, ACCOUNTANT, MEMBER ITA no.592/Nag./2024 (Assessment Year : 2022–23) Aacharya Shri Rushirajbaba Pratishahan Plot no.R–20/A, Devara Laxmi Nagar, Nagpur 440 022 PAN – AADTA8079L ……………. Appellant v/s Commissioner of Income Tax Exemption, Pune ……………. Respondent Assessee by : Ms. Shrishti Pande Revenue by : Shri Sandipkumar Salunke Date of Hearing – 28/01/2025 Date of Order – 17/02/2025 O R D E R PER K.M. ROY, A.M. This appeal by the assessee is against the impugned order dated 28/09/2024, passed by the learned Commissioner of Income Tax (Exemption), Pune, [“learned CIT(E)”], for the assessment year 2022–23. 2. In its appeal, the assessee has raised following grounds:– “1. That on facts and circumstances of the case, Ld. CIT Exemption erred in not considering the details/submissions provided by the assessee and rejecting the application for exemption u/s 80G. 2. That on facts and circumstances of the case, Ld. CIT Exemption ought to have seen that assessee is carrying on charitable activity and not religious activity. 3. That on facts and circumstances of the case, the rejection is unjustified as enough opportunity of being heard were not given to the Assessee. 4. Any other ground that may be raised during hearing of appeal.” 2 Aacharya Shri Rushirajbaba Pratishahan ITA no.592/Nag./2024 3. The relevant operating portion of the findings of the learned CIT(E) recorded in its impugned order from Para–4 to 11, are reproduced below for reference:– “4. On verification of the details submitted by the assessee in response to the said notice and the documents submitted along with the application, various discrepancies were noticed. Another notice was then issued to the assessee on 05/08/2024 and the discrepancies were duly communicated to it as reproduced below: \"(i) It is seen that you have obtained regular registration under section 12AB of the Act under clause (i) of section 12A(1)(ac) of the Act but it seems that you were not registered under section 12A / 12AA of the Act prior to 01/04/2021 since the copy of such registration is neither attached with the original application while applying for such registration nor during the present proceedings. Therefore, it seems that you have obtained the said registration by mis-representation of facts and the said registration is not a valid registration. Therefore, the condition under clause (i) of section 80G(5) of the Income Tax Act, 1961 is not fulfilled. (ii) As per the provisions of Rule 17A(2)(k) of the Income Tax Rules, 1962, the application in Form No. 10AB shall be accompanied by note on activities giving details of activities actually carried out but you have failed to comply with those provisions. You ought to be submit the details of actual activities carried out in the last 3 years or since inception, whichever is later. Further, the supporting evidence of the activities in the form bills and photographs are also not submitted by you. In absence of any such tangible material in respect of details and proof of activities being carried out, it is not possible to ascertain as to whether the activities are charitable and in line with the objects of the trust/institution. (iii) You were specifically requested to furnish year-wise list of all donations received (including corpus donations etc.) during the last 3 years / since inception, whichever is later viz. name of donor, address of donor, amount of donation, mode of donation / receipts etc. vide initial notice. You have not furnished the details as required in above format. Please furnish the same. (iv) Kindly furnish evidences claiming expenses on charitable activities such as bills/vouchers/invoices alongwith photographs of activities carried out by your trust.\" 5. The assessee was requested to show cause as to why the application should not be rejected and why the approval granted under section 80G(5) of the Income Tax Act, 1961 should not be cancelled. The assessee was also given opportunity of being heard vide the said notice. The assessee was specifically informed that in the event of failure to comply by the due date, the application shall be liable to be rejected and the approval shall also be liable to be cancelled. The compliance to the said notice was due on 12/08/2024. The notice was duly served on the assessee through e-portal and email. 6. The assessee responded to the said notice on 16/08/2024 and requested for an adjournment. An adjournment was granted upto 30/08/2024 vide notice 3 Aacharya Shri Rushirajbaba Pratishahan ITA no.592/Nag./2024 dated 24/08/2024. The notice was duly served on the assessee through e- portal and email. The assessee has responded to the said notice on 26/08/204. 7. On verification of the details submitted by the assessee in response to the said notice, various discrepancies were noticed. Hence, another notice was then issued to the assessee on 22/09/2024 and the discrepancies were duly communicated to it as reproduced below: \"(i) It is seen from your submission that you have furnish the copies of bills/invoices that are related to constructions and as per the photographs it seems that your trust has constructed a temple. This activity is purely religious in nature and not treated as charitable activity. Thus, it is seen that you have made substantial expenditure on religious activities and has violated the conditions laid down u/s. 80G(5)(ii) read with section 80G(5B) of the Act. (ii) Further, the expenditure made for the above purpose is not reflecting in your financial statements i.e. neither in Income & Expenditure Account nor in Balance Sheet. Thus, the activities carried out are not synchronized with your financial statements. This raises serious concern about the genuineness of activities. Please explain with the supporting documents. \" 8. The assessee was requested to show cause as to why the application should not be rejected and why the approval granted under section 80G(5) of the Income Tax Act, 1961 should not be cancelled. The assessee was also given opportunity of being heard vide the said notice. The assessee was specifically informed that in the event of failure to comply by the due date, the application shall be liable to be rejected and the approval shall also be liable to be cancelled. The compliance to the said notice was due on 26/09/2024. The notice was duly served on the assessee through e-portal and email. However, the assessee neither submitted explanation to the show cause notice till date nor availed the opportunity of being heard. 9. Since, the assessee has not furnished any explanation to the discrepancies communicated to it, it is presumed that the assessee has nothing to say in the matter. 10. Considering the above facts discussed in the show notice and discrepancies noticed and also that the assessee has not complied with the provisions of sub-clause (a) of clause (ii) of second proviso to section 80G(5) of the Income Tax Act, 1961 as well as the provisions of Rule 11AA(2) of Income Tax Rules, 1962 in spite giving sufficient opportunities, the undersigned is unable to draw any satisfactory conclusion about the genuineness of activities of the assessee and fulfilment of conditions laid down in clause (i) to (v) of section 80G(5) of the Act. 17. In view of the above, the application filed by the assessee is hereby rejected and the provisional approval granted on 20/10/2021 under clause (iv) for first proviso, to section 80G(5) of the Income Tax Act, 1961 is hereby cancelled.” 4. The learned Authorised Representative humbly requested that one more opportunity may be afforded to her for furnishing of necessary documents, as 4 Aacharya Shri Rushirajbaba Pratishahan ITA no.592/Nag./2024 she pleaded that she had a strong case. Accordingly, we set aside the impugned order passed by the learned CIT(E) and remit the matter back to his file for denovo adjudication on merit after providing reasonable opportunity of being heard. The assessee is also directed to co–operative the learned CIT(E) and adhere to the notices to be issued by the learned CIT(E) promptly. 5. In the result, assessee’s appeal stands allowed for statistical purposed. Order pronounced in the open Court on 17/02/2025 Sd/- V. DURGA RAO JUDICIAL MEMBER Sd/- K.M. ROY ACCOUNTANT MEMBER NAGPUR, DATED: 17/02/2025 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Nagpur; and (5) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Sr. Private Secretary ITAT, Nagpur "