SUNRISE FOUNDATION, RAIPUR,RAIPUR V. ITO 1, RAIPUR, RAIPUR

ITA 413/RPR/2024

AI Insights

The case involves Sunrise Foundation, which applied for registration under section 12AB of the Income Tax Act, 1961, using Form No. 10AB. The application was initially rejected by the CIT(E), Bhopal, on the grounds that the foundation had previously claimed exemptions under sections 10, 11, or 12, making it ineligible under the specific clause (vi)(B) of section 12A(1)(ac) applicable from October 1, 2023. The foundation appealed to the ITAT, which found that the CIT(E) had not provided adequate opportunity to the foundation to contest the rejection, leading to the setting aside of the CIT(E)'s order and remanding the case for a fresh decision.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 106795 (ITAT-RAIPUR)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Next Hearing Date: 22-11-2024
• Assessment Year: 2024-2025
• Appeal Filed On: 07-09-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S.L.ANURAGI
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice
• Section: 11

Judgement Text

"आयकर अपीलीय अिधकरण, रायपुर Ɋायपीठ, रायपुर IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR ŵी रिवश सूद, Ɋाियक सद˟ एवं ŵी अŜण खोड़िपया, लेखा सद˟ क े समƗ । BEFORE SHRI RAVISH SOOD, JM & SHRI ARUN KHODPIA, AM आयकर अपील सं. / ITA No: 413/RPR/2024 (िनधा[रण वष[ Assessment Year: 2024-25) Sunrise Foundation, Wallfort Enclave Phase-1, Pachpedi Naka, Raipur, C.G. v s Income Tax Officer-1, Raipur PAN: ABETS2998C (अपीलाथŎ/Appellant) . . (ŮȑथŎ / Respondent) िनधाŊįरती की ओर से /Assessee by : None राजˢ की ओर से /Revenue by : Shri S. L. Anuragi, CIT-DR सुनवाई की तारीख / Date of Hearing : 22.11.2024 घोषणा की तारीख/Date of Pronouncement : 25.11.2024 आदेश / O R D E R Per Arun Khodpia, AM: The captioned appeal is filed by the assessee against the order of Commissioner of Income Tax (Exemption), Bhopal, M.P. [in short, Ld. “CIT(E)”], dated 12.07.2024, rejecting the applications of the assessee trust submitted in Form No. 10AB for registration / approval u/s 12AB of the Act, 1961 (in short “the Act”). 2. The grounds of appeal raised by the assessee are extracted as under: Grounds of Appeal 2 ITA No. 413/RPR/2024 Sunrise Foundatin vs ITO-1, Raipur 1. On the facts and circumstances of the case and in law the learned CIT(E) erred in not providing appellant adequate opportunity and rejecting the application of registration. The Appellant prays that the said order of CIT(E) passed without proper opportunity be directed to be quashed and set aside. 2. On the facts and circumstances of the case and in law, the learned Commissioner of Income tax (Appeals)(\"CIT(E)\") erred in rejecting the application of the Assessee and thereby not granting registration in the correct clause. The Appellant prays that the said order be set aside to the CIT(E) for hearing on merits. 3. The Appellant craves leave to add to, alter and/or amend all or any of h foregoing grounds of appeal. 3. At the outset, it is noticed that the present appeal is fixed for hearing on 08.10.2024 and again on 22.10.2024, however, even in the second round of hearing also there was no representation of behalf of the assessee. It is also brought to our notice that notices send to the assessee through registered post by the ITAT were retuned with the reason “Not known”. Since the issue involved in present case has been dealt with by this Tribunal in some other cases also, we find it appropriate to adjudicate the issue on the basis of material available before us, in the interest of justice. 4. The brief facts of the case are that, the assessee “Sunrise Foundation” had applied for grant of registration u/s 12AB of the Act., in prescribed form 10AB before the Ld. CIT(E), Bhopal. Opportunities were provided to the assessee, wherein the assessee have submitted its response, however, the response of assessee was not found convincing by the Ld. CIT(E), so as to 3 ITA No. 413/RPR/2024 Sunrise Foundatin vs ITO-1, Raipur satisfy him that the assessee herein is entitled for grant of registration u/s 12A(1)(ac)(vi)(B) of the Act. Accordingly, the application of the assessee was rejected with the following observations: The assessee has applied in Form IOAB for registration u/s 12AB under the new provision of Income Tax Act, 1961. Consequently, opportunity letters were issued to the assessee and various documents/details were called for; to process the said application and to verify the eligibility of the assessee. The assessee has submitted his reply during the proceedings. After considering the reply of the assessee, it is noticed that the assessee has applied in Form IOAB for registration u/s 12A(1 )(ac)(vi)(B) of the Act. The relevant part of section applicable from 01.10.2023 of the Section 12A(1 )(ac)(vi)(B) of the Act is as under- (vi) in any other case, where activities of the trust or institution have— (B) commenced and no income or part thereof of the •said trust or institution has been excluded from the total income on account of applicability of subclause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause ( 23C) of section s 10, or section 11 or section 12, for any previous year ending on or before the date of such application, at any time after the commencement of such activities, It is clear that the section 12A(1)(ac)(vi)(B) is applicable only for those assessee whose activities are commenced and no exemption U/s 11/12 or 10(23C)(iv)/(v)/(vi)(via) has ever been claimed before filling of application in Form IOAB. 4 ITA No. 413/RPR/2024 Sunrise Foundatin vs ITO-1, Raipur On perusal of reply of the assessee and data available on record, it is noticed that the assessee has already claimed exemption in its I TR for earlier years before filling the present application. Hence, the assessee is not eligible to file application under section 12A(1 )(ac)(vi)(B) of the Act. Considering the facts of the case and reasons mentioned above, application filed in Form IOAB for registration u/s 12AB of the Act is hereby rejected. Note- Please note that due to above technical issue, merits of the case has not been examined. 5. Aggrieved with the aforesaid order of rejection by the Ld. CIT(E), assessee preferred an appeal before the ITAT, which is under consideration in the instant case. 6. As there were no representation on behalf of the assessee, the appeal is taken up for adjudication on the basis of material available on record. 7. On behalf of the revenue, Ld. CIT-DR, Shri S. L. Anuragi, have submitted that the order of Ld. CIT(E) is justified, therefore, the same deserves to be upheld. 8. We have considered the rival submissions, perused the material available on record and the relevant provisions of the Act. On perusal of the 5 ITA No. 413/RPR/2024 Sunrise Foundatin vs ITO-1, Raipur order of Ld. CIT(E), it is transpired that the application of assessee has been rejected on the ground that as per section 12A(1)(ac)(iv)(B), if the activities by the assessee are commenced and no exemption u/s 11/12 or 10(23C)(iv)/(v)/(vi)(via) has ever been claimed before the date of such application are only eligible for applying registration u/s 12A. However, the assessee in present case, as per data available on record had already claimed exemption in its ITR for earlier years before filing the present application. Hence, assessee is not eligible to file an application in terms of provisions of section 12A(1)(ac)(vi)(B). 9. Going through the grounds of appeal of the assessee, we found that the main grievance of the assessee was that, adequate opportunity was not afforded to the assessee while the application was declined. The order of Ld. CIT(E) is also silent about any opportunity to the assessee before making the rejection through a show cause notice that, why the application of assessee for grant of registration should not be rejected for the reasons based on which the rejection was effected. 10. In view of aforesaid facts and circumstances, we are of the view that the assessee herein was not provided with sufficient opportunity, dehors any confrontation about the reason of denial. Consequently, following of principle 6 ITA No. 413/RPR/2024 Sunrise Foundatin vs ITO-1, Raipur of natural justice as well as the violation of provisions of section 12AB(1)(b)(ii)(B), wherein it is specifically mentioned that if the approving authority is not satisfied, he may pass any order, rejecting such application and also cancelling assessee’s registration but after affording a reasonable opportunity of being heard. 11. In backdrop of aforesaid observations, facts and circumstances of the present case, we are of the considered view that the assessee herein is divested from the reasonable opportunity, thus, in order to follow the mandate of law, the impugned order is set aside and restored back to the file of Ld. CIT(E) to reconsider the application of the assessee and dispose of the same after affording reasonable opportunity as mandated. 12. Resultantly, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 25/11/2024. Sd/- (RAVISH SOOD) Sd/- (ARUN KHODPIA) Ɋाियक सद˟ / JUDICIAL MEMBER लेखा सद˟ / ACCOUNTANT MEMBER रायपुर/Raipur; िदनांक Dated 25/11/2024 Vaibhav Shrivastav 7 ITA No. 413/RPR/2024 Sunrise Foundatin vs ITO-1, Raipur आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : आदेशानुसार/ BY ORDER, (Senior Private Secretary) आयकर अपीलीय अिधकरण, रायपुर/ITAT, Raipur 1. अपीलाथŎ / The Appellant- Sunrise Foundation 2. ŮȑथŎ / The Respondent- ITO-1, Raipur 3. आयकर आयुƅ(अपील) / The CIT(A), 4. The Pr. CIT, Raipur (C.G.) 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, रायपुर/ DR, ITAT, Raipur 6. गाडŊ फाईल / Guard file. // स×याǒपत Ĥित True copy // "