PEHCHHAN PRAGATI FOUNDATION,MUMBAI V. SALIL MISHRA, CIT (EXEMPTIONS), MUMBAI, MUMBAI

ITA 6739/MUM/2024

AI Insights

The case involves Pehchhan Pragati Foundation, a charitable organization, which appealed against the decision of the Commissioner of Income Tax (Exemptions), Mumbai, rejecting their application for registration under section 80G(5) of the Income Tax Act. The Commissioner had initially found the application incomplete and noted intentions to engage in religious activities, which could violate section 80G(5)(ii). The Tribunal noted that the assessee was not given a fair opportunity to amend the objectionable clause in the trust deed and remanded the case for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474406 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R.A. DHYANI
• Assessee Lawyers: OM KANDALKAR; FILING AN APPLICATION ..
• Keywords: Set aside; Opportunity of being heard
• Section: 80G

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “C” BENCH, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER AND SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.6739/MUM/2024 (िनधा\u0005रण वष\u0005 / Assessment Year :2025-2026) PEHCHHAN PRAGATI FOUNDATION, 1001, Atlanta Manor, Opp Patel Alumimium, Western Express Highway, Malad East Mumbai-400097 Vs. SALIL MISHRA CIT(Exemptions), Mumbai \u000bथायी लेखा सं./PAN No. : AACTP 8880P (अपीलाथ\u0010 /Appellant) .. (\u0011\u0012थ\u0010 / Respondent) िनधा\u0016\u0017रती की ओर से /Assessee by : Shri Om Kandalkar (Proxy Counsel) राज\u001a की ओर से /Revenue by : Mr. R.A.Dhyani, CIT-DR सुनवाई की तारीख / Date of Hearing : 12/02/2025 घोषणा की तारीख/Date of Pronouncement : 28/02/2025 आदेश / O R D E R PER NARENDER KUMAR CHOUDHRY, JM: This appeal has been preferred by the assessee against the order dated 29.11.2024, impugned herein, passed by the ld. Commissioner of Income Tax (Exemptions), Mumbai (in short ‘Ld. Commissioner’). ITA No.6739/Mum/2024 2 2. In the instant case, the assessee being a charitable organization was provisionally registered u/s.12A & 80G of the Act and, therefore, was required to be regularized and consequently made an application for regular/permanent registration u/s.12AB of the Act, which was also granted. 3. Subsequently the assessee by filing an application 21.05.2024 u/s.80G(5) of the Act, has sought for registration u/s.80G(5) of the Act. The ld. Commissioner considering the said application, observed that the application is not complete and all the documents required to be accompanied, were not furnished and the applicant intend to indulge in religious activity, which is in violation of provisions of Section 80G(5)(ii) of the Act. Though the show cause notice, was issued to the assessee, however, no response received from the assessee, and, therefore, a final showcause notice dated 13.11.2024 was issued to the assessee, in response to which, the Assessee vide letter dated 08.11.2024 claimed that the assessee has not carried out any religious activity and all activities are of charitable activities. 4. The ld. Commissioner though considered the submission of the Assessee, but could not find sufficient and necessary compliance, as per the provisions of the Act and thus ultimately held the object no. 3(23) as enumerated in the trust deed, is in violation of statutory provisions as reproduced below: - \"3(23)\"-To form and manage, look after religious prayer centre, to support to create religious affection\". ITA No.6739/Mum/2024 3 4.1 The Ld. Commissioner at last, rejected the application mainly on the following reason: “The use of such words in the object of the assessee- trust clearly conveys its intention to utilize the funds for religious activities, thereby leaving open the possibility for future endeavors, which may involve expenditure on religious activities. The assessee-trust ought to have amended these clauses to align with the provisions of the Income Tax Act. However, it has failed to do so”. 5. The Assessee being aggrieved challenged the impugned order and submitted that the assessee had replied the final show cause notice on 08.11.2024 and, therefore, construed that its case for approval u/s.80G(5) of the Act has been ascertained. However, the ld. Commissioner without raising any specific objection qua violation of statutory provisions and/or giving any further opportunity of being heard, rejected the application, vide impugned order and therefore, the impugned order is liable to be set aside. The assessee further submitted that it has carried out the charitable activities as from the details filed, it is clear that the assessee has not incurred even a single paisa for the religious activities, therefore, presumption of the ld. Commissioner that the intention of the assessee to utilize the funds for religious activities and thereby leaving open the possibility for future endeavors, which may involve expenditure on religious activities. 6. On the contrary, ld. CIT-DR refuted the claim of the assessee by submitting that the impugned order does not suffers from any perversity, impropriety and/or illegality. Hence, the appeal of the assessee may be dismissed. ITA No.6739/Mum/2024 4 7. Heard the parties and perused the material available on record. The Assessee though not complied with the show cause notice dated 13.11.2024, however, by filing its reply on 18.11.2024 submitted a letter dated 17.11.2024 before the Ld. Commissioner and claimed that it has not carried out any religious activities and all activities carried out are of charitable activities. 7.1 We have given thoughtful consideration to the observation of ld. Commissioner and claim made by the Assessee. Whatsoever it may be, the fact goes to show that the assessee neither amended the object clause i.e. 3(23) as objected to by the ld. Commissioner nor replied the final show cause notice dated 13.11.2024 in its right prospective and proper manner. Even otherwise the Ld. Commissioner before holding the clause 3(23) of the object is in violation of the statutory provisions and/or rejecting the application filed by the Assessee, has not given any reasonable opportunity of being heard to the Assessee. 7.2 Thus considering the aforesaid facts in totality, as the application filed by the assessee in Form No.10AB was neither complete nor accompanied by the relevant documents, as observed by the ld. Commissioner in para No.3 and the Assessee has not been any opportunity to amend the memorandum of association/objects and/or to delete the object clause no.3(23), as objected to by the ld. Commissioner, we are inclined to set aside the impugned order and consequently remanding the instant case to the file of the ld. Commissioner for decision afresh, suffice to say by affording reasonable opportunity of being heard to the Assessee. ITA No.6739/Mum/2024 5 8. In the result, appeal of the assessee stands allowed for statistical purposes. Order pronounced in the open court on 28/02/2025. Sd/- (PRABHASH SHANKAR) Sd/- (NARENDER KUMAR CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER मुंबई/Mumbai Prakash Kumar Mishra, Sr.PS आदेश की \u0019ितिलिप अ\u001eेिषत/Copy of the Order forwarded to : आदेशानुसार/ BY ORDER, (Assistant Registrar) आयकर अपीलीय अिधकरण, मुंबई/ ITAT, Mumbai 1. अपीलाथ\u0010 / The Appellant- . 2. \u0011\u0012थ\u0010 / The Respondent- 3. आयकर आयु#(अपील) / The CIT(A), 4. आयकर आयु# / CIT 5. िवभागीय \u0011ितिनिध, आयकर अपीलीय अिधकरण, मुंबई / DR, ITAT, Mumbai 6. गाड\u0016 फाईल / Guard file. स\u0012ािपत \u0011ित //True Copy// "