LOK KALYAN MANDAL,GANPATI MANDIR, DR HEDGEWAR NAGAR, ICHALKARANJI V. EXEMPTION WARD, KOLHAPUR, AAYAKAR BHAVAN,KOLHAPUR

ITA 2337/PUN/2024

AI Insights

The case involves Lok Kalyan Mandal Ganpati Mandir, a public charitable trust, which appealed against the decision of the CIT(Exemption), Pune, rejecting their application for approval under section 80G of the Income Tax Act, 1961. The trust, engaged in various charitable activities, applied for this approval to enhance their fundraising capabilities. The CIT(Exemption) initially issued a notice to verify the genuineness of the trust's activities and compliance with the conditions of section 80G(5). After reviewing the submitted details, discrepancies were noted, leading to a second notice. The trust's failure to address these discrepancies resulted in the rejection of their application. The Tribunal, considering the circumstances, decided to give the trust another opportunity to present their case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471200 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2024-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMOL KHAIRNAR
• Assessee Lawyers: HARI KRISHAN
• Keywords: Opportunity of being heard; Charitable institution
• Section: 11; 12A; 12; 10; 10(23C); 80G

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.2337/PUN/2024 Assessment year : 2024-25 Lok Kalyan Mandal Ganpati Mandir, Dr Hedgewar Nagar, Ichalkaranji – 416115 Vs. CIT Exemption, Pune PAN: AAATL0634K (Appellant) (Respondent) Assessee by : Shri Hari Krishan Department by : Shri Amol Khairnar, CIT-DR Date of hearing : 11-02-2025 Date of pronouncement : 12-02-2025 O R D E R PER R. K. PANDA, VP : This appeal filed by the assessee is directed against the order dated 14.09.2024 of the Ld. CIT(Exemption), Pune rejecting the application for grant of approval u/s 80G of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). 2. Although a number of grounds have been raised by the assessee, however, these all relate to the rejection of the application for approval u/s 80G of the Act by Ld. CIT(E). 3. Facts of the case, in brief, are that the assessee is a public charitable trust duly registered u/s 12A of the Act. It is engaged in various charitable activities in 2 ITA No.2337/PUN/2024 line with its objects including social welfare, health care, education and relief for the economically weaker sections of society. The assessee trust applied for the approval u/s 80G of the Act on 29.03.2024 in form No.10AB. In order to verify the genuineness of activities of the assessee trust and fulfillment of conditions laid down in clause (i) to (v) of section 80G(5) of the Act, a notice was issued to the assessee asking it to upload certain information. The assessee in response to the same filed various details. However, upon noticing various discrepancies in the submissions made by the assessee, the CIT(E) issued another notice to the assessee communicating the various discrepancies. Since the assessee did not furnish any explanation to the discrepancies communicated to it, the CIT(E) presumed that the assessee has nothing to say in the matter. He, therefore, rejected the application requesting grant of registration u/s 80G of the Act by observing as under: “7. 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 fulfillment of conditions laid down in clause (i) to (v) of section 80G(5) of the Act. 8. 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. 9. 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 (1)/(iii) of first proviso to the said section and the case is not covered under the exclusions provided vide 3 ITA No.2337/PUN/2024 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. Therefore, the condition (i) of section 80G(5) of the Income Tax Act, 1961 is also not fulfilled in this case. 10. In view of the above, the application filed by the assessee is hereby rejected and the provisional approval granted on 04/04/2022 under clause (iv) for first proviso to section 80G(5) of the Income Tax Act, 1961 is hereby cancelled.” 4. Aggrieved with such order of the Ld. CIT(E), the assessee is in appeal before the Tribunal. 5. The Ld. Counsel for the assessee at the outset submitted that the assessee had responded to the first notice issued by the CIT(E) by filing the various details. However, the assessee could not file the requisite details in response to second notice wherein the Ld. CIT(E) has pointed out certain discrepancies. He submitted that in the interest of justice the assessee should be given an opportunity to substantiate its case by filing the requisite details before the CIT(E). 6. The Ld. DR on the other hand strongly opposed the above submission made by the Ld. Counsel for the assessee. He submitted that despite opportunities granted by the Ld. CIT(E), the assessee failed to comply to the said notices, therefore, the order of the Ld. CIT(E) should be upheld and the grounds raised by the assessee be dismissed. 7. After hearing both sides, we find the assessee in response to the first notice issued by the Ld. CIT(E) has filed the requisite details. However, when the Ld. 4 ITA No.2337/PUN/2024 CIT(E) issued another notice asking the assessee to clarify regarding certain discrepancies found in the above submissions, the assessee failed to comply to the same. It is the submission of the Ld. Counsel for the assessee that in the interest of justice, the assessee should be given an opportunity to substantiate its case by filing the requisite details to the satisfaction of 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 Ld. CIT(Exemption) with a direction to grant one final opportunity to the assessee to substantiate its case by filing requisite details and decide the issue as per fact and law after giving due opportunity of being heard to the assessee. The assessee is also hereby directed to make its submissions, if any, before the Ld. CIT(E) on the appointed date without seeking any adjournment under any pretext, failing which the Ld. 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. 8. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 12th February, 2025. Sd/- Sd/- (VINAY BHAMORE) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 12th February, 2025 GCVSR 5 ITA No.2337/PUN/2024 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 11.02.2025 Sr. PS/PS 2 Draft placed before author 11.02.2025 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 "