The Man Made Textiles Research Association, Surat V. The Commissioner of Income Tax, (Exemption), Ahmedabad

ITA 411/SRT/2023

AI Insights

The case involves The Man Made Textiles Research Association, a charitable trust, which appealed against the decision of the Commissioner of Income Tax (Exemptions), Ahmedabad, rejecting their application for registration under Section 12AB of the Income Tax Act, 1961. The primary reason for rejection was a mismatch in the name of the trust as per different documents, which the CIT(E) found problematic for verifying the genuineness and activities of the trust. The Tribunal found that the CIT(E) had not provided an opportunity for the trust to explain or correct the name mismatch, which was deemed inadvertent. Consequently, the Tribunal restored the matter to the CIT(E) for a fresh examination.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 302159 (ITAT-SURAT)
• Duration Of Justice: 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-07-2023
• Assessment Year: 2022-2023
• Appeal Filed On: 11-06-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA No. 411/SRT/2023 (AY: 2022-23) (Hearing in Virtual Court) The Man Made Textiles Research Association, Near Market Telephone Exchange, Ring Road, Surat-395002. PAN: AAATT 4304 L Vs. The Commissioner of Income Tax (Exemptions), Ahmedabad, Room No. 609, Floor-6, Aayakar Bhawan (Vejalpur), Nr. Sachin Tower, 100 Foot Road, Anandnagar- Prahladnagar Road, Ahmedabad-380015. APPELLANT RESPONDEDNT Assessee by Shri Hiren Vepari, CA and Ms. Himali Mistri CA Department by Shri Ashok B. Koli (CIT-DR) Date of Institution of Appeal 12/06/2023 Date of hearing 11/07/2023 Date of pronouncement 17/07/2023 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee-trust is directed against the order of learned Commissioner of Income Tax, (Exemptions), Ahmedabad [in short the ld. CIT(E)] dated 30/05/2023 in rejecting the application of assessee- trust for registration under Section 12AB of the Income Tax Act, 1961 (in short, the Act). The assessee has raised following grounds of appeal: “(1) The CIT(Exemption) was not justified in rejecting application u/s 12A particularly when the appellant satisfied all the necessary conditions. (2) The CIT(Exemption) was driven by extraneous considerations while rejecting the application. (3) All of the above grounds are prejudice to one another. ITA No. 411/SRT/2023 The Man Made Textiles Research Assocation Vs CIT(E) 2 (4) The appellant craves leave to add, alter or vary any of the grounds of appeal.” 2. Brief facts of the case are that the assessee is filed an application for registration under Section 12AB of the Act in Form 10AB in accordance with Rule 17A of the Income Tax Rules, 1962, (in short, the Rules) on 22/11/2022. The assessee furnished necessary details at the time of filing application electronically/online including copy of original registration alongwith memorandum of association/constitution deed/trust deed of assessee. The assessee also furnished copy of certificate of registration and PAN. On perusal of details of assessee in different documents, the ld CIT(E) found that as per PAN/ Form-10AB the name of assessee “THE MAN MADE TEXTILES RESEARCH ASSOCAITION”, however in the copy of constitution of trust/MOA, the name of assessee is mentioned as “MAN MADE TEXTILES RESEARCH ASSOCIATION”. Similarly, in the copy of certificate of registration the name is appearing as “MAN MADE TEXTILES RESEARCH ASSOCIATION”. In the bank account with YES bank, the name of account holder is mentioned as “MAN MADE TEXTILES RESEARCH ASSOCIATION”. Thus, there is a mismatch in the name of PAN database vis-à-vis certificate of registration. The ld. CIT(E) was of the view that the assessee has not furnished required details. In absence of requisite details, the verification of object of trust could not be verified. The ld. CIT(A) rejected the application of assessee for want of compliance by holding that Section ITA No. 411/SRT/2023 The Man Made Textiles Research Assocation Vs CIT(E) 3 12AB of the Act makes it clear that before granting registration, he has to satisfy himself about genuineness of the activities of the trust and to verify that activities are in consonance with object of the trust or institution. Aggrieved by the order of ld. CIT(E), the assessee has filed present appeal before this Tribunal. 3. We have heard the submissions of learned Authorised Representative (ld. AR) of the assessee and the learned Commissioner of Income Tax- Departmental Representative (ld. CIT-DR) for the revenue. The ld. AR of the assessee submits that the assessee furnished complete details while filing/uploading required details at the time of filing of application. The ld. AR of the assessee submits that they have furnished copy of trust deed, registration of trust deed with Charity Commissioner, Surat bearing registration No. F/232/Surat. Same registration number is mentioned in all evidences of assessee trust about its activities. The ld. AR of the assessee submits that the assessee is a charitable and religious trust. The trust is in existence from 1977. There is no change in the object and activities of the assessee-trust. The assessee was granted provisional registration certificate under section 21A(1)(ac)(iii) on 01/12/2022. The name of trust was wrongly mentioned due to inadvertence as “THE MAN MADE TEXTILES RESEARCH ASSOCIATION”, which may be read as “MAN MADE TEXTILES RESEARCH ASSOCIATION”. Different nomenclature due to inadvertence mistake. There is no change ITA No. 411/SRT/2023 The Man Made Textiles Research Assocation Vs CIT(E) 4 in the name of assessee trust rather due to mismatch of name due to inadvertence, use of article “THE” while quoting the name of assessee- trust. The ld. CIT(E) rejected the application instead of considering it in a broad way. The ld. AR of the assessee submits that he has filed copy of PAN card of assessee, registration certificate with Assistant Charity Commissioner, Surat having registration No. F/232/Surat. The assessee is filing its return of income by with PAN AAATT4304L. The audited financial statement also mentioned the registration number and the name of assessee trust and PAN. The trust deed also clearly mentioned the name of assessee trust. The ld. AR of the assessee submits that the application of assessee was rejected in a mechanical way without seeking any clarification for explanation from the assessee. The ld. AR of the assessee submits that the assessee has fulfilled all the conditions and appeal of assessee may be allowed. 4. In alternative submission, the ld. AR of the assessee submits that the matter may be restored back to the file of ld. CIT(E) with direction to consider the application of assessee afresh and to pass he order in accordance with law. The ld AR for assessee submits that he is ready to make correction in the Form-10AB and at other places with the satisfaction of ld CIT(E). 5. On the other hand, the ld. CIT-DR for the revenue submits that there was a mismatch in various documents. The assessee has given different ITA No. 411/SRT/2023 The Man Made Textiles Research Assocation Vs CIT(E) 5 name in Form-10AB, which is not matching with the name mentioned in registration certificate as well as in trust deed. The ls CIT(A) while rejecting application due to mismatch of name in different evidences. The object and activities of the assessee was not verified by the ld. CIT(E). The ld. CIT-DR submits that in case, if the Bench of view that the assessee deserve any relief, the matter may be restored back to the file of ld. CIT(E) to examine the object of assessee and genuinenity of the activities undertaken by the assessee trust and to examine any other requirement, if the assessee fulfills such condition. 6. We have considered the submissions of both the parties and have gone through the order of ld. CIT(E) carefully. We find that the ld. CIT(E) in para 7 of his order, has accepted that the assessee has filed/attached/uploaded trust deed and details regarding the registration with Charity Commissioner with translated copy. The ld. CIT(E) was of the view that there is a mismatch in the name of assessee in PAN/Form- .10AB and in copy of registration deed. We find that such mistake may be inadvertent otherwise the registration number and PAN and the object of assessee are not in dispute. The assessee is in existence from 1954 and registered under the provisions of Bombay Public Charitable Trust vide registration No. F/232/Surat. Considering the fact that the basic ground of rejection of application under section 12AB was mismatch in the name of assessee vis-à-vis name shown in PAN, ITA No. 411/SRT/2023 The Man Made Textiles Research Assocation Vs CIT(E) 6 Application under Form 10AB, and Trust deed, which may due to inadvertence, otherwise the registration number with Charity Commissioner and PAN is not in dispute. The assessee was not given opportunity either to explain the mismatch or to get such mismatch to correct, thus, in our view, the assessee deserve an opportunity to correct the same, which otherwise not fatal, therefore, we deem it appropriate to restore the issue back to the file of ld. CIT(E) reconsider the registration of assessee under Section 12AB of the act afresh and pass order in accordance with law. Needless to direct that before deciding the application afresh, the ld. CIT(E) shall grant opportunity of correcting the mismatch in the name and also to allow to make further submission to prove the object of assessee-trust and its activities. The assessee is also directed to file/furnish any other necessary information if so desired. In the result, grounds of assessees appeal is allowed for statistical purposes. 7. In the result, this appeal of assessee is allowed for statistical purposes. Order pronounced on 17/07/2023 in open court. Sd/- Sd/- (Dr. ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 17/07/2023 *Ranjan Copy to: 1. Assessee – 2. Revenue - ITA No. 411/SRT/2023 The Man Made Textiles Research Assocation Vs CIT(E) 7 3. CIT 4. DR By Order 5. Guard File Sr. Private Secretary, ITAT Surat