MOTIBHAI DOSHI FOUNDATION ,KOLHAPUR V. CIT EXEMPTION , PUNE

ITA 2787/PUN/2024

AI Insights

The case involves the Motibhai Doshi Foundation, 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 CIT(Exemption) had earlier issued notices to the foundation requesting clarification and compliance regarding the genuineness of its activities and fulfillment of conditions under section 80G. The foundation failed to respond to these notices, leading to the rejection of their application. The Tribunal, considering the circumstances and the foundation's claim of an accountant's mistake, decided to give the foundation another opportunity to present its case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 771893 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2025
• 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: NIKHIL S PATHAK
• Keywords: Opportunity of being heard; Non compliance
• Section: 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.2787/PUN/2024 Motibhai Doshi Foundation Swarupam, Shivaji Park, Kolhapur – 416001 Vs. CIT(Exemption), Pune PAN: AAATM1892J (Appellant) (Respondent) Assessee by : Shri Nikhil S Pathak Department by : Shri Amol Khairnar, CIT-DR Date of hearing : 18-08-2025 Date of pronouncement : 25-08-2025 O R D E R PER R.K. PANDA, VP: This appeal filed by the assessee is directed against the order dated 31.08.2024 of the Ld. CIT(Exemption), Pune refusing grant of approval u/s 80G of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). 2. There is a delay of 56 days in filing of this appeal before the Tribunal for which the assessee has filed a condonation application along with an affidavit explaining the reasons for such delay. 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. Printed from counselvise.com 2 ITA No.2787/PUN/2024 3. Facts of the case, in brief, are that the assessee filed an application in Form No.10AB on 26.03.2024 for approval of the trust 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 fulfilment of conditions laid down in clause (i) to (v) of section 80G of the Act, a notice was issued through ITBA portal on 20.05.2024 requesting the assessee to upload certain information / clarification. The assessee was also requested to submit the compliance by 04.06.2024. 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 it to explain on account of those discrepancies. 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 approval shall also be liable to be cancelled. However, the assessee did not make any submission. Therefore, the Ld. CIT(E) was not satisfied about the genuineness of the activities of the assessee and fulfilment of conditions laid down in clause (i) to (v) of section 80G of the Act for which he rejected the application for grant of approval u/s 80G by observing as under: “5. The assessee was requested 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 also given opportunity of 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 approval shall also be liable to be cancelled. The compliance to the said notice was due on 20/08/2024. 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. 6. 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. Printed from counselvise.com 3 ITA No.2787/PUN/2024 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 clasue (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 fulfilment of conditions laid down in clause (i) to (v) of section 80G(5) of the Act. 8. In view of the above, the application filed by the assessee is hereby rejected and the provisional approval granted on 06/04/2022 under clause (iv) for first proviso to section 80G(5) of the Income Tax Act, 1961 is hereby cancelled.” 4. Aggrieved with such rejection of approval u/s 80G by 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, the learned CIT (E) erred in rejecting the application made by the assessee and cancelling approval under clause (iv) for first proviso to section 80G(5) of the Act. 2. On the facts and in the circumstances of the case and in law, the learned CIT (E) is not justified in observing 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 and he is unable to draw any satisfactory conclusion about the genuineness of activities of the assessee and fulfilment of conditions laid down in clause (i) to (v) of section 80G(5) of the Act. 3. On the facts and in the circumstances of the case and in law, The learned CIT (E) failed to appreciate that the assessee is engaged in charitable activities and had submitted various evidences to prove that the activities were carried out in accordance with the objects of the trust and hence, there was no reason to reject the application for approval. 4. On the facts and in the circumstances of the case and in law, the learned CIT (E) is not justified in passing cancellation order observing that the assessee has not furnished any explanation the discrepancies communicated to it, it is presumed that the assessee has nothing to say in the matter without considering adjournment request submitted by the assessee your appellant prays for an opportunity for submitting the documents and also for granting the registration 80G of IT Act. 5. The appellant craves, to consider each of the above grounds of appeal without prejudice to each other and craves leave to add, alter, delete or modify all or any of the above grounds of appeal. Printed from counselvise.com 4 ITA No.2787/PUN/2024 5. The Ld. Counsel for the assessee at the outset submitted that due to non compliance to the second notice issued by the Ld. CIT(E), he rejected the application for approval u/s 80G of the Act and also cancelled the provisional approval granted earlier. He submitted 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 assessee should be given an opportunity to substantiate its case by filing the requisite details before the Ld. CIT(E). 6. The Ld. DR on the other hand heavily relied on the order of Ld. CIT(E) rejecting the application for grant of approval u/s 80G of the Act. 7. 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 2nd notice for which he rejected the application for grant of approval u/s 80G of the Act, the reasons of which have already been reproduced in the preceding paragraphs. It is the submission of the Ld. Counsel for the assessee that due to the mistake of the accountant of the trust, those details could not be filed. It is also his submission that given an opportunity, the assessee is in a position to substantiate its case by filing the requisite details before the Ld. CIT(E) to his satisfaction. 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 Printed from counselvise.com 5 ITA No.2787/PUN/2024 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 Ld. CIT(E) on the appointed date without seeking any adjournment under any pretext, failing which the Ld. CIT(Exemption) 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 25th August, 2025. Sd/- Sd/- (ASTHA CHANDRA) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 25th August, 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 Printed from counselvise.com 6 ITA No.2787/PUN/2024 S.No. Details Date Initials Designation 1 Draft dictated on 18.08.2025 Sr. PS/PS 2 Draft placed before author 19.08.2025 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 Printed from counselvise.com "