SHREE AYYAPPA TRUST,NASHIK V. C.I.T (EXEMPTION), PUNE, PUNE

ITA 2513/PUN/2024

AI Insights

The case involves Shree Ayyappa Trust, which appealed against the order of the CIT (Exemption), Pune, rejecting their application for registration under section 12A of the Income Tax Act, 1961, and cancelling the provisional registration previously granted under section 12AB. The CIT (E) had found discrepancies in the trust's activities and documentation, leading to doubts about the genuineness of its charitable activities and the compliance with legal requirements. The Tribunal, after hearing the arguments, decided to give the trust another opportunity to present its case with adequate documentation and evidence.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 24542 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2025
• 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: ABHAY AVCHAT
• Keywords: Set aside; Opportunity of being heard
• Section: 12A

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.2513/PUN/2024 Assessment year : 2024-25 Shree Ayyappa Trust S No 423 2 Rangubai Junnare Nagar, Dwarka, Nashik – 422011 Vs. CIT (Exemption), Pune PAN: AASTS6431M (Appellant) (Respondent) Assessee by : Shri Abhay Avchat Department by : Shri Amol Khairnar, CIT-DR Date of hearing : 27-02-2025 Date of pronouncement : 27-02-2025 O R D E R PER R. K. PANDA, VP : This appeal filed by the assessee is directed against the order dated 30.09.2024 of the Ld. CIT(Exemption), Pune rejecting the application for grant of registration u/s 12A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) and cancelling the provisional registration granted earlier u/s 12AB of the Act. 2. Facts of the case in brief, are that the assessee filed an application in Form No.10AB on 15.03.2024 for registration of the trust under clause (iii) of section 12A(1)(ac) of the Act. With a view to verify the genuineness of the activities of the assessee and compliance to requirements of any other law for the time being in 2 ITA No.2513/PUN/2024 force by the trust / institution as are material for the purpose of achieving its objects, a notice was issued through ITBA portal on 16.05.2024 requesting the assessee to upload certain information / clarification. The Ld. CIT(E) while going through the various details furnished by the assessee noticed certain discrepancies for which he issued a notice asking the assessee to explain as to why the application should not be rejected and why the registration granted earlier u/s 12AB should not be cancelled. The assessee in response to the same furnished certain details. However, the Ld. CIT(E) was not satisfied with the arguments advanced by the assessee and rejected the application for grant of registration and also cancelled the provisional registration granted earlier u/s 12AB of the Act by observing as under: “6. The assessee furnished its reply in response to the notice on 25/08/2024. However, the same is not accepted for the reasons stated as under. (1) As per the financial statement of the trust it is seen that the major charitable activity of the trust is from annadanam. However, the trust has not submitted any supporting credible evidences in the form of bills / photographs. Thus, the genuineness of the activity cannot be ascertained (ii) The photographs submitted by the assessee trust does not show any charity. In fact, the photographs show conducting puja ceremonies by the temple people/staff/ pujari. Thus, the said photographs does not show any charity for general public. (iii) The assessee furnished its response on 28/08/2024. It was specifically requested to furnish detailed donation lists for all relevant years. On verification, it is seen that the trust has failed to submit the lists of donors (only sample donation receipts are submitted by the assessee). Therefore, identity of such donors and consequential genuineness of donations remained doubtful. 7. Considering the above facts discussed in the show notice and discrepancies noticed, the undersigned is not satisfied 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. 3 ITA No.2513/PUN/2024 8. In view of the above, the application filed by the assessee is hereby rejected and the provisional registration granted on 05/04/2022 under section 12AB read with section 12A(1)(ac) (vi) of the Income Tax Act, 1961 is hereby cancelled.” 3. Aggrieved with such order of CIT(Exemption), the assessee is in appeal before the Tribunal by raising the following grounds: 1. The learned CIT (Exemption), Pune has erred in rejecting application for registration /renewal filed by Assessee by passing order under clause (ii) of section 12A(1)(ac) r.w.s. 12AB of the Income Tax Act, 1961. 2 Without considering the facts and circumstances of the case and the law, the ld. CIT Exemption has erred in rejecting assessee's application for registration/renewal 3. The order of rejection has been passed without considering submission and explanation filed by the assessee and thus suffers from infirmity 4. The Order passed by the CIT Exemption, Pune rejecting the assessee's application is not in keeping with provisions of law, is bad in law and thus the same needs to be set aside. 5. The learned CIT erred in passing the order without affording adequate opportunity of being heard to the assessee. 6. The Ld. CIT was not right in doubting the genuineness of activities of trust and the compliance while passing the rejection order. 7. The Assessee prays for any other relief may be allowed to the Assessee under provisions of income tax law. 8. The assessee craves leave to add, alter, amend, modify, delete any of the grounds of appeal. 4. The Ld. Counsel for the assessee at the outset submitted that the Ld. CIT(E) has given a finding that the trust failed to submit the list of donors for which the identity of such donors and consequential genuineness of the donors remained doubtful. Further, he has also given a finding that the assessee did not furnish the supporting credible evidence in the form of bills, photographs to ascertain the 4 ITA No.2513/PUN/2024 genuineness of the activities. He submitted 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 the Ld. CIT(E). 5. The Ld. DR on the other hand strongly supported the order of the CIT(E). 6. We have heard the rival arguments made by both the sides and perused the order of the Ld. CIT(E). We find due to non submission of the bills, vouchers and photographs to satisfy the genuineness of the activities of the assessee trust and non submission of the complete list of donors to verify the identity and genuineness of such donors, the Ld. CIT(E) rejected the application for registration u/s 12A of the Act and also cancelled the provisional registration granted earlier u/s 12AB. 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 before the 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 CIT(E) 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 as per fact and law. The assessee is also hereby directed to submit the details as called for by the CIT(E) on the appointed date without seeking any adjournment under any pretext, failing which the CIT(E) is at liberty to pass appropriate order as per law. We hold and direct 5 ITA No.2513/PUN/2024 accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes. 7. In the result, both the appeals filed by the assessee are allowed for statistical purposes. Order pronounced in the open Court on 27th February, 2025. Sd/- Sd/- (ASTHA CHANDRA) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 27th February, 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 6 ITA No.2513/PUN/2024 S.No. Details Date Initials Designation 1 Draft dictated on 27.02.2025 Sr. PS/PS 2 Draft placed before author 27.02.2025 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 "