JITO MULUND CHAPTER FOUNDATION,THANE V. CIT EXEMPTION, PUNE

ITA 2528/PUN/2024

AI Insights

The case involves the Jito Mulund Chapter Foundation appealing against the order of the CIT(Exemptions), Pune, which rejected their application for grant of registration under section 12A of the Income Tax Act, 1961, and cancelled the provisional registration previously granted under section 12AB. The foundation faced issues with compliance to notices requesting clarification on discrepancies noted by the CIT(E). Despite these challenges, the ITAT found it just to restore the matter to the CIT(E) for a fresh examination, providing the foundation another opportunity to comply and substantiate their application.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 669041 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANDEEP SENGUPTA
• Assessee Lawyers: RAVI GUPTA
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 12A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND SHRI VINAY BHAMORE, JUDICIAL MEMBER ITA No.2528/PUN/2024 Jito Mulund Chapter Foundation Manba House, Plot No-A 79, Road No.16, Wagle Estate, Thane (West), - 400604, Maharashtra Vs. CIT (Exemption), Pune PAN: AAFCJ5968C (Appellant) (Respondent) Assessee by : Shri Ravi Gupta Department by : Shri Sandeep Sengupta, CIT Date of hearing : 02-06-2025 Date of pronouncement : 23-06-2025 O R D E R PER R. K. PANDA, VP : This appeal filed by the assessee is directed against the order dated 17.07.2023 of the Ld. CIT(Exemption), Pune rejecting the application for grant of registration u/s 12A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) and cancelling the provisional registration granted earlier u/s 12AB of the Act. 2. There is a delay of 429 days in filing of the appeal before the Tribunal for which the assessee has filed the condonation application along with an affidavit requesting for condonation of delay. The contents of the affidavit filed along with the condonation application reads as under: 2 ITA No.2528/PUN/2024 “AFFIDAVIT I Nalin Shah, the trustee of Jito Mulund Chapter Foundation residing at Mumbai, do hereby state and declare on solemn affirmation as follows: 1. That we had applied for provisional registration of the trust on 16.07.2022 u/s 12AB of Income Tax Act, 1961. The provisional registration was granted on 03.08.2022. Thereafter, we filed an application for final registration in Form 10AB on 14.01.2023. However, order in Form No. 10AD dated 17.07.2023 u/s 12AB of the Income-tax Act, 1961, was passed rejecting the application filed. 2. That subsequent to rejection of application for final registration on 17.07.2023, we sought a professional guidance who advised us to apply again for provisional registration. Hence, on 25.12.2023, we again applied for provisional registration. 3. That provisional registration was granted on 01.01.2024. Then we again attempted to apply for final registration of the trust. However, while filing Form 10AB for final registration, we were facing several technical issues on income tax e-filing portal and hence we were not able to submit the said application. 4. That we were not familiar with the updated provisions of the trust registration under the Income Tax Act, 1961. Still facing the difficulties in filing the application in Form 10AB for final registration, we approached CIT(E), Mumbai for guidance as to how we should proceed in the aforesaid situation. We were informed by the CIT(E), Mumbai that on rejection of application for final registration we cannot again apply for registration under section 12AB and that we need to file an appeal before ITAT against the original rejection order dated 17.07.2023. 5. That it is for this reason that we have now filed an appeal against the impugned order dated 17.07.2023. Thus, due to lack of knowledge we could not file the appeal against the rejection order within the statutory time limit of 60 days. 6. Hence, this affidavit is being made in support of our application to the Hon'ble Income Tax Appellate Tribunal, Mumbai to condone the delay in filing of appeal. Whatever is stated hereinabove is true to the best of my knowledge, information and belief. Solemnly affirmed at Mumbai this 22nd day of March, 2025 For Jito Mulund Chapter Foundation (Appellant) Sd/- Nalin Shah (Deponent)” 3 ITA No.2528/PUN/2024 3. After considering the contents of the condonation application filed along with the affidavit and after hearing the Ld. DR, the delay in filing of the appeal is condoned and the appeal is admitted for adjudication. 4. Facts of the case, in brief, are that the assessee filed an application in Form No.10AB on 14.01.2023 for registration of the trust under clause (iii) of section 12A(1)(ac) of the Act. With a view to verify the genuineness of the activities of the assessee and compliance to requirements of any other law for the time being in force by the trust / institution as are material for the purpose of achieving its objects, a notice was issued through ITBA portal on 17.04.2023 requesting the assessee to upload certain information / clarification. The assessee was also requested to submit the compliance by 02.05.2023. On verification of the details submitted by the assessee, the Ld. CIT(E) noted various discrepancies for which another notice was issued to the assessee asking the assessee to explain on account of those discrepancies. Since the assessee did not comply to 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 registration shall also be liable to be cancelled. However, the assessee did not make any submission. The Ld. CIT(E) therefore, rejected the application for grant of registration u/s 12A of the Act and also cancelled the provisional registration granted earlier u/s 12AB by observing as under: “2.3 The assessee was requested to show cause as to why the application should not be rejected and why the registration granted under section 12AB of the Income Tax Act, 1961 should not be cancelled. The assessee was also given opportunity of 4 ITA No.2528/PUN/2024 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 registration shall also be liable to be cancelled. The compliance to the said notice was due on 13/07/2023. 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. 3. 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. 4. Considering the above facts discussed in the show notice and discrepancies noticed and also that the assessee has not complied with the provisions of section 12AB(1)(b)(i) of the Income Tax Act, 1961 as well as the provisions of Rule 17A(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 compliance of requirements of any other law for the time being in force by the assessee as are material for the purpose of achieving its objects. 5. In view of the above, the application filed by the assessee is hereby rejected and the provisional registration granted on 03/08/2022 under section 12AB read with section 12A(1)(ac)(vi) of the Income Tax Act, 1961 is hereby cancelled.” 5. Aggrieved with such order of Ld. CIT(E), the assessee is in appeal before the Tribunal by raising the following grounds: 1. In the facts and circumstances of the case and in law, the learned Commissioner of Income tax (Exemptions) has erred in passing an order in Form 10AD, rejecting the approval sought by the appellant for its final registration u/s 12A of the Act, in violation of principles of natural justice, without considering the documentary evidences and the explanations furnished by the appellant. 2. The appellant craves leave to add, alter, delete or modify all or any of the above grounds of appeal. All the above grounds are without prejudice to each other. 6. The Ld. Counsel for the assessee submitted that due to preoccupation of the concerned Chartered Accountant, the details could not be filed. He submitted that given an opportunity the assessee is in a position to substantiate its case by filing 5 ITA No.2528/PUN/2024 all the relevant details for deciding the issue afresh. He accordingly submitted that the matter may be restored to the file of the Ld. CIT(E). 7. The Ld. DR on the other hand strongly objected to the arguments advanced by the Ld. Counsel for the assessee. 8. We have heard the rival arguments made by both the sides, perused the order of the Ld. CIT(E) and the paper book filed on behalf of the assessee. It is an admitted fact that due to non-compliance to the 2nd notice issued by the Ld. CIT(E) asking for certain clarifications regarding the discrepancies pointed out by him, he rejected the application for grant of registration and also cancelled the provisional registration granted earlier. It is the submission of the Ld. Counsel for the assessee that given an opportunity the assessee is in a position to substantiate its case by filing all the relevant details before the Ld. CIT(E). Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the CIT(E) with a direction to grant one final opportunity to the assessee to substantiate its case by filing the requisite details to his satisfaction and decide the issue as per fact and law. The assessee is also hereby directed to submit the details as called for by the CIT(E) on the appointed date without seeking any adjournment under any pretext, failing which the CIT(E) is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes. 6 ITA No.2528/PUN/2024 9. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 23rd June, 2025. Sd/- Sd/- (VINAY BHAMORE) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 23rd June, 2025 GCVSR आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपीलार्थी / The Appellant; 2. प्रत्यर्थी / The Respondent 3. 4. The concerned Pr.CIT, Pune DR, ITAT, ‘A’ Bench, Pune 5. गार्ड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण ,पुणे / ITAT, Pune S.No. Details Date Initials Designation 1 Draft dictated on 18.06.2025 Sr. PS/PS 2 Draft placed before author 19.06.2025 Sr. PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member AM/AM 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order "