MADAT WELFARE TRUST,PUNE V. CIT (EXEMPTION), PUNE

ITA 2314/PUN/2024

AI Insights

Madat Welfare Trust filed two separate appeals against the orders of the Commissioner of Income Tax (Exemption), Pune, which had rejected the Trust's applications for registration under sections 12AB and 80G of the Income Tax Act, 1961. The primary contention in both appeals was the alleged failure of the CIT (Exemption) to appreciate the circumstances that led to the non-submission of required documents in a timely manner. The Tribunal found merit in the Trust's request for another opportunity to submit the necessary documentation and evidence to substantiate its charitable activities, which were prerequisites for the registrations sought.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 39506 (ITAT-PUNE)
• Duration Of Justice: 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 11-11-2024
• 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
• Section: 10(23C); 80G

Judgement Text

" आयकर अपीलीय अधिकरण “ए” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI R.K. PANDA, VICE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / ITA Nos.2175 & 2314/PUN/2024 Madat Welfare Trust, Lovadarwadi Kusalkar Bunglow, Pune – 411016 PAN : AAFTM9457L Vs. CIT (Exemption), Pune अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Pramod S Shingte Department by : Shri Amol Khairnar Date of hearing : 26-11-2024 Date of Pronouncement : 29-11-2024 आदेश / ORDER PER ASTHA CHANDRA, JM : Two appeals filed by the assessee are directed against the two separate order(s) both dated 24.09.2024 of the Ld. Commissioner of Income Tax (Exemption), Pune [“CIT(E)”] whereby he rejected the application of the assessee filed before him in Form No. 10AB u/s 12A(1)(ac)(iii) on 10.03.2024 and section 80G(5)(iii) of the Income Tax Act, 1961 (the “Act”) filed on 05.03.2024 respectively. These were heard together and are being disposed of by this order. ITA No. 2175/PUN/2024 2. The assessee has raised the following solitary ground of appeal :- “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 12AB without appreciating the facts of the case, and without considering the genuine circumstances which restricted the appellant in sending the reply in time, your appellant prays for and opportunity for submitting the documents and explain the reasons for non-submission and also for granting the registration u/s 12AB of IT Act.” 3. Briefly stated, the facts of the case are that on receipt of the assessee’s application filed in Form No. 10AB u/s 12A(1)(ac)(iii) of the Act along with annexures thereto, with a view to verify the genuineness of the activities of the assessee etc., the Ld. CIT(E) issued notice on 10.05.2024 through ITBA portal requiring the assessee to upload certain information/ clarification such as date of commencement of activity, date of expiry of 2 ITA Nos.2175 & 2314/PUN/2024 provisional registration, details of any other law applicable for achievement of objectives and the proof of compliance of said law, proof of identity of main trustees / managing trustees / directors / trustees / secretary, list of donors, note on activities carried out in the last three years/inception etc. under the provisions of section 12AB of the Act. The compliance was sought by 27.05.2024. On verification of details submitted by the assessee in response to the said notice and the documents submitted alongwith the application, various discrepancies were noticed by the Ld. CIT(E) resulting in issuance of another show cause notice on 06.08.2024 communicating the said discrepancies thereof. 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 Act should not be cancelled. The assessee was specifically informed that in the event of failure to comply by 13.08.2024, the application shall be liable to be rejected and provisional registration shall also be liable to be cancelled and matter will be decided based on material available on record. The show cause notice was duly served through e-mail portal/e-mail in response to which the assessee furnished its reply on 13.08.2024. Considering the assessee’s response, the Ld. CIT(E) observed as under :- “6. The assessee responded to the said notice on 13/08/2024. The activities claimed to be carried out by the trust are that of adopting 120 kids from all over maharashtra and parenting them, helped many institution orphanages and old age home, helped 1000 flood affected people from the district of sangli and kolhapur, handing over a cheque of Rs.50,000/- to the district administration of kolhapur for flood relief, adopting 100 kids from families of flood affected areas and educating them, provided help to 500 families of flood affected area and rehabilitating them, provided help to general public during the pandemic of Covid 19 period. However, the assessee's contention is not acceptable as the assessee has failed to submit any supporting / credible evidences like photographs, bills/vouchers, details of beneficiaries etc in support of the charitable activities claimed by the trust. 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 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.” 4. The Ld. CIT(E) therefore proceeded to pass the impugned order rejecting the application filed by the assessee and also cancelling the provisional registration granted on 01.12.2022 to the assessee. 5. Dissatisfied, the assessee is in appeal before the Tribunal. 6. The Ld. AR submitted that there was no intentional non-compliance before the Ld. CIT(E). As can be seen from the order of the Ld. CIT(E) only 3 ITA Nos.2175 & 2314/PUN/2024 two opportunities of hearing were granted to the assessee vide notice dated 10.05.2024 and 06.08.2024 to which the assessee filed its reply. However, the Ld. CIT(E) proceeded to pass the impugned order rejecting the application of the assessee for the reason that the assessee failed to submit any supporting/credible evidences in support of its charitable activities and also failed to respond to the discrepancies noted by him. The Ld. AR submitted that given an opportunity the assessee is in a position to submit all the requisite details/ documentary evidence before the Ld. CIT(E) in support of its application including the details on discrepancies cited by him. He, therefore, prayed that the matter may be set aside to the file of the Ld. CIT(E) to adjudicate the same afresh on merits after affording one more opportunity of being heard to the assessee. 7. The Ld. DR, on the other hand, supported the order of Ld. CIT(E) and submitted that the assessee was given adequate opportunity by the Ld. CIT(E) to present its case before him still the assessee failed to comply with the provisions of section 12AB of the Act by not submitting any supporting documents/evidence called for, in order for the Ld. CIT(E) to arrive at a satisfactory conclusion about the genuineness of the activities of the assessee trust. The Ld. CIT(E) was therefore, fully justified in rejecting the assessee’s application for final registration and cancelling the provisional registration. 8. We have considered the rival submissions and perused the records. On the facts and in the circumstances of the assessee’s case, we are of the view that it would be judicially expedient and in the interest of justice and fair play if the matter is restored back to the file of Ld. CIT(E) to consider afresh the assessee’s application for registration u/s 12A(1)(ac)(iii) of the Act and decide the matter on merits, in accordance with facts and law after allowing one more opportunity of being heard to the assessee and present its case. The assessee shall provide the requisite support in terms of submitting the relevant details/documentary evidence as may be required/ called upon on the appointed date, failing which the Ld. CIT(E) shall be at liberty to pass appropriate order as per law. We order accordingly. 9. In the result, the appeal of assessee is treated as allowed for statistical purposes. ITA No. 2314/PUN/2024 10. Briefly stated, the fact of the case are that the assessee trust applied for final registration u/s 80G(5)(iii) of the Act on 05.03.2024. On receipt of 4 ITA Nos.2175 & 2314/PUN/2024 the assessee’s application filed in Form No. 10AB under clause (iii) of first proviso to sub-section (5) of section 80G of the Act along with annexures thereto, with a view to verify the genuineness of the activities of the assessee etc., the Ld. CIT(E) issued notice on 09.05.2024 through ITBA portal requiring the assessee to upload certain information/clarification such as date of commencement of activity, date of expiry of provisional registration, details of any other law applicable for achievement of objectives and the proof of compliance of said law, proof of identity of main trustees/ directors / trustees, year-wise list of donations received, note on activities carried out along with supporting credible evidence etc. The compliance was sought by 24.05.2024. On verification of details submitted by the assessee in response to the said notice and the documents submitted alongwith the application, various discrepancies were noticed by the Ld. CIT(E) resulting in issuance of another show cause notice on 06.08.2024 communicating the said discrepancies thereof. The assessee was requested to show cause as to why the application should not be rejected and why the registration granted under section 80G(5) of the Act should not be cancelled. The assessee was specifically informed that in the event of failure to comply by 13.08.2024, the application shall be liable to be rejected and provisional registration shall also be liable to be cancelled. The show cause notice was duly served through e-mail portal/e-mail in response to which the assessee furnished its reply on 13.08.2024. After considering the assessee’s response to the said notice(s), the Ld. CIT(E) proceeded to pass the impugned order observing that the assessee failed to submit any supporting/credible evidences in support of the charitable activities carried out by it and also failed to respond to the discrepancies cited by him. It is therefore not possible for him to verify the genuineness of the activities of the trust. The Ld. CIT(E) further observed that the assessee is neither registered u/s 12AB read with section 12A(1)(ac)(i)/12A(1)(ac)(iii) nor approved u/s 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 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 dependants. 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 24.09.2024. Therefore, the condition (i) of section 80G(5) of the Act is not fulfilled in this case. The Ld. CIT(E) therefore rejected the assessee’s application for registration u/s 80G(5) of the Act. 5 ITA Nos.2175 & 2314/PUN/2024 11. Aggrieved, the assessee is in appeal before the Tribunal by raising the following solitary ground of appeal : “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 without appreciating the facts of the case, and without considering the genuine circumstances which restricted the appellant in sending the reply in time, your appellant prays for and opportunity for submitting the documents and explain the reasons for non-submission and also for granting the registration u/s 80G of IT Act.” 12. We find that the facts in ITA No.2314/PUN/2024 are identical to ITA No. 2175/PUN/2024 except the assessee seeking registration u/s. 80G of the Act. Since, the facts in ITA No. 2314/PUN/2024 are similar to ITA No. 2175/PUN/2024, the findings given by us while deciding the appeal of assessee in ITA No. 2175/PUN/2024 would mutatis mutandis apply to ITA No. 2314/PUN/2024, as well. Accordingly, the appeal of assessee is allowed for statistical purposes. 13. To sum up, both the appeals of the assessee in ITA Nos. 2175 & 2314/PUN/2024 are allowed for statistical purposes. Order pronounced in the open court on 29th November, 2024. Sd/- Sd/- (R.K. Panda) (Astha Chandra) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; दिन ांक / Dated : 29th November, 2024. रदि आदेश की प्रधिधलधप अग्रेधिि / Copy of the Order forwarded to : 1. अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 5. ग र्ड फ़ इल / Guard File. //सत्य दपि प्रदि// True Copy// आिेश नुस र / BY ORDER, िररष्ठ दनजी सदचि / Sr. Private Secretary आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune "