LATE MAMASAHEB MOHOL VIDYA VIKAS MANDAL,PUNE V. CIT EXEMPTION, PUNE

ITA 2586/PUN/2024

AI Insights

The case involves the Late Mamasaheb Mohol Vidya Vikas Mandal, which appealed against the decision of the Commissioner of Income Tax (Exemption), Pune, who had rejected their application for approval under section 80G of the Income Tax Act, 1961. The rejection was primarily due to the assessee's failure to comply with notices requesting information to verify the genuineness of its activities. The Tribunal noted that despite the assessee's non-compliance, the matter was remanded back to the CIT (Exemption) for a fresh decision, following a similar precedent in a related case concerning the rejection of the assessee's application for registration under section 12A of the Act.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 361041 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMOL KHAIRNAR
• Assessee Lawyers: PRAMOD S SHINGTE
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice; Non compliance
• Section: 11; 12A; 12; 10; 80G

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER ITA No.2586/PUN/2024 Late Mamasaheb Mohol Vidya Vikas Mandal 249, Mauli Sadan, Sadashiv Peth, Pune – 411030 Vs. The CIT (Exemption), Pune PAN: AABTL7146B (Appellant) (Respondent) Assessee by : Shri Pramod S Shingte Department by : Shri Amol Khairnar CIT-DR Date of hearing : 06-05-2025 Date of pronouncement : 23-05-2025 O R D E R PER ASTHA CHANDRA, JM: This appeal filed by the assessee is directed against the order dated 09.10.2024 of the Ld. Commissioner of Income Tax (Exemption), Pune [“CIT)E)”)] rejecting the application for approval u/s 80G of the Income Tax Act, 1961 (the “Act”). 2. Facts of the case in brief, are that the assessee filed an application in Form No.10AB on 29.06.2024 for approval under clause (iii) of first proviso to sub section (5) of section 80G of the Act. With a view to verify the genuineness of the activities of the assessee and fulfillment of conditions laid down in clause (i) to (v) of section 80G(5) of the Act, a notice was issued through ITBA portal on 08.08.2024 requesting the assessee to upload certain information / clarification. 2 ITA No.2586/PUN/2024 The assessee was requested to submit the compliance by 22.08.2024. Since the assessee did not furnish compliance to the said notice, another notice was given on 24.09.2024 requesting it to show cause as to why the application should not be rejected and why the approval granted u/s 80G should not be cancelled. In absence of any reply from the side of the assessee by the due date i.e. 01.10.2024, the Ld. CIT(E) rejected the application filed by the assessee for grant of approval u/s 80G of the Act and also cancelled the provisional approval granted earlier by observing as under: “4. Since the assessee did not furnish compliance to the said notice, another opportunity was given to the assessee vide notice dated 24/09/2024 requesting it 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 requested to submit compliance by 01/10/2024. The assessee was also given opportunity of being heard vide the said notice. The notice was duly served on the assessee through e-portal and email. However, the assessee neither furnished compliance to the show cause notice nor availed the opportunity of being heard. 5. The information / details were called for under the provisions of sub-clause (a) of clause (ii) of second proviso to section 80G (5) of the Income Tax Act, 1961. These are the basic details required to ascertain the overall nature of the activities of the assessee and are directly relevant to the present proceedings. However, the assessee has failed to comply despite giving sufficient opportunities as discussed above, including an opportunity of being heard. 6. Thus, the assessee has failed to furnish the details called for under the provisions of sub-clause (a) of clause (ii) of second proviso to section 80G (5) of the Income Tax Act, 1961 to verify the genuineness of activities of the trust or institution and fulfilment of conditions laid down in clauses (i) to (v) of Section 80G(5) of the Act. 7. In absence of the compliance to the above requirement, it is not possible to arrive at any conclusion about the genuineness of activities of the assessee and fulfilment of conditions laid down in clauses (i) to (v) of Section 80G (5) of the Act. 8. It is clear from the above that the assessee was given sufficient opportunity to comply, but it has not complied to the same. It seems that the assessee is not having any supporting documents / evidence to submit. The assessee has failed to comply with the provisions of sub-clause (a) of clause (ii) of second proviso to 3 ITA No.2586/PUN/2024 section 80G(5) of Income Tax Act, 1961 and hence, the undersigned is unable to draw any satisfactory conclusion about genuineness of activities of the assessee and fulfilment of conditions laid down in clauses (i) to (v) of Section 80G(5) of the Act and has left no alternative but to reject the application. 9. As per the condition vide clause (i) of section 80G(5) of the Income Tax Act, 1961, the approval is available only if the income of the institution or fund is not be liable to inclusion in its total income under the provisions of section 11 and 12 or clause (23AA) / clause (23C) of section 10 of the Income Tax Act, 1961. Exclusions for the said condition are detailed in clause (a), (b) and (c) of proviso to clause (i) of section 80G(5) of the Act. Therefore, the institution/fund is required to be regularly registered/approved either under section 12AB or 10(23AA) or 10(23C) of the Income Tax Act, 1961 or the institution / fund shall be a Regimental Fund or Non-Public Fund established by the armed forces of the Union for the welfare of the past and present members of such forces or their dependents. 10. In the instant case it is noticed that the assessee is neither regularly registered u/s 12AB read with section 12A(1)(ac) (i) /12A(1)(ac)(iii) nor having regular approval under section 10(23C) read with clause (i)/(iii) of first proviso to the said section and the case is not covered under the exclusions provided vide proviso to clause (i) of section 80G(5) of the Act. The assessee is not approved under section 10(23AA) of the Act. The assessee is also not a Regimental Fund or Non-Public Fund established by the armed forces of the Union for the welfare of the past and present members of such forces or their dependents. In fact, the application of the assessee in form No. 10AB for registration u/s 12AB filed under the provisions of section 12A(1)(ac)(iii) of the Act has been rejected vide order dated 27/03/2024. Therefore, the condition (i) of section 80G(5) of the Income Tax Act, 1961 is also not fulfilled in this case. 11. In view of the above, the application filed by the assessee is hereby rejected and the provisional approval dated 30/05/2022 under section 80G(5)(vi) read with clause (iv) of first proviso to section 80G(5) of the Act is hereby cancelled.” 3. Aggrieved with such order of Ld. CIT(E), the assessee is in appeal before the Tribunal by raising the following grounds: 1. On the facts and in the circumstances of the case and in law Ld. CIT Exemption has erred in not granting registration u/s 80G(5)(vi) r.w.c (iv) of the IT Act, 1961 without appreciating the facts of the case. Your appellant prays for grant of such registration u/s 80G(5)(vi) r.w.c (iv) of the IT Act, 1961. 2. Your appellant prays for deletion of entire addition. Your appellant craves for to add, alter amend, modify, delete any or all grounds of appeal before or during the course of hearing in the interest of natural justice. 4 ITA No.2586/PUN/2024 4. The Ld. Counsel for the assessee at the outset submitted that due to non compliance to the notice(s) issued by the Ld. CIT(E) and also since the assessee is not regularly registered u/s 12A of the Act, he rejected the application for approval u/s 80G of the Act and also cancelled the provisional approval granted earlier. He submitted that the co-ordinate bench of the Tribunal in assessee’s appeal challenging the rejection of section 12A application of the assessee for grant of regular registration, has set aside the issue to the file of the Ld. CIT(A) and therefore urged that this present appeal being consequential may also be set aside to the file of the Ld. CIT(E). He submitted that the assessee failed to make compliance before the Ld. CIT(A) on account of certain unavoidable circumstances and that given an opportunity, the assessee is in a position to substantiate its case by filing the requisite details before the Ld. CIT(E). He accordingly submitted that in the interest of justice, the impugned issue may be set aside to the Ld. CIT(E) for fresh adjudication after affording an opportunity of being heard to the assessee. 5. The Ld. DR, on the other hand, heavily relied on the order of Ld. CIT(E) and submitted that the Ld. CIT(E) afforded adequate opportunities to the assessee but the assessee still chose not to comply with the notices issues by the Ld. CIT(E) and therefore he was completely justified in rejecting the assessee’s application. 6. We have heard the rival arguments made by both the sides and perused the order of the Ld. CIT(E). It is an admitted fact that despite sufficient opportunities granted by the Ld. CIT(E), the assessee did not respond to the notice(s) for which 5 ITA No.2586/PUN/2024 he rejected the application for grant of approval u/s 80G of the Act. It is the submission of the Ld. Counsel for the assessee that non-compliance before the Ld. CIT(E) was not intentional but was on account of certain circumstances beyond the control of the assessee. It is also his submission that given an opportunity, the assessee is in a position to present and substantiate its case by filing the requisite details before the Ld. CIT(E) to his satisfaction. We have perused the order of the coordinate bench of this Tribunal in assessee’s case in ITA No. 2027/PUN/2024 dated 03.03.2025 in assessee’s appeal against the order of the Ld. CIT(E) wherein he rejected the assessee’s application for regular registration under section 12A of the Act. Since the Tribunal in the said appeal has set aside the order of the Ld. CIT(E) and remanded the matter back to his file with a direction to decide the application for registration under section 12A(1)(ac)(iii) afresh, we deem it fit and proper, in the interest of justice, to restore the impugned issue in the present appeal being consequential, to the file of the Ld. CIT(Exemption) 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 afresh as per fact and law. The assessee is also hereby directed to remain vigilant and submit the details as called for by the Ld. CIT(E) on the appointed date without seeking any adjournment under any pretext unless for the sufficient cause, failing which the Ld. CIT(E) shall be 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.2586/PUN/2024 7. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 23rd May, 2025. Sd/- Sd/- (R. K. PANDA) (ASTHA CHANDRA) VICE PRESIDENT JUDICIAL MEMBER पुणे Pune; दिन ांक Dated : 23rd May, 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 08.05.2025 Sr. PS/PS 2 Draft placed before author 21.05.2025 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 "