THE MANGO HOUSE TRUST,MERCES, PANAJI, GOA V. CIT(EXEMPTIONS), BANGALORE

ITA 200/PAN/2024

AI Insights

The case involves The Mango House Trust appealing against the rejection of their applications for regular registration under sections 12AB and 80G of the Income Tax Act by the CIT(E), Bangalore. The appeals were consolidated due to the identical facts and issues involved. The primary contention was the alleged violation of the principle of natural justice, as the appellant argued they were not given a reasonable opportunity to comply with the notices and rectify the deficiencies noted by the CIT(E). The Tribunal found that the time given to the appellant to respond was insufficient, thus constituting a denial of a real opportunity to be heard.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 26312 (ITAT-PANAJI)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: WT(D)
• Next Hearing Date: 13-11-2024
• Assessment Year: misc
• Appeal Filed On: 12-08-2024
• Other Referred Cases: Smt. Ritu Devi v. CIT [2004, 141 Taxman 559 (Mad.)]
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CAPT. PRADEEP ARYA LD.
• Assessee Lawyers: SHAM KAMAT LD.
• Keywords: Principle of natural justice; Charitable institution
• Section: 201; 80G

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, PANAJI BENCH, PANAJI ITAT-Panaji Page 1 of 6 BEFORE HON’BLE SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER AND SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER ITA Nos. 200 & 201 /PAN/2024 The Mango House Trust, Shop No. 2, H.No. 11/273/5, Bonawadi, Merces, Goa-403005. PAN:AAETT6263G . . . . . . . Appellant V/s The Commissioner of Income Tax, Exemption, Bangalore. . . . . . . . Respondent Appearances Assessee by: Mr Sham Kamat [‘Ld. AR’] Revenue by : Capt. Pradeep Arya [‘Ld. DR’] Date of conclusive Hearing : 13/11/2024 Date of Pronouncement : 13/11/2024 ORDER PER G. D. PADMAHSHALI, AM; By present twin appeals, the assessee impugns separate orders of rejection passed u/s 12A(1)(ac)(vi) and u/s 80G(5) of the Income Tax Act [in short ‘the Act’] by the Commissioner of Income Tax-Exemption, Bangalore [in short ‘CIT(E)’] vide DIN & Order No. ITBA/EXM/F/EXM45/2024-25/1065665240(1) 1055672266(1) both dt. 14/06/2024. 2. Since facts & solitary issue involved in these appeals are identical, common & interrelated, on the rival parties’ request, for the sake of brevity these are heard together for a common and consolidated order. The Mango House Trust Vs CIT(E) ITA Nos.200 & 201/PAN/2024 ITAT-Panaji Page 2 of 6 3. Without touching merits, we have heard rival parties; and subject to rule 18 of ITAT Rules, 1963 perused material placed on record. ITA No. 201/PAN/2024 4. We note that, the appellant vide Form No. 10AB dt. 18/12/2023 filed an application to the respondent u/c (iii) of section 12A(1)(ac) of the Act seeking thereby regular/final registration u/s 12AB of the Act. On the appellant’s effective failure to annexe required documents as contemplated u/r 17A(2)(k) of IT-Rules, and discrepancies noted by the field inquiry officer, the Ld. CIT(E) by email dt. 29/05/2024 accorded an opportunity to make good the deficiency. It was also informed by the registering authority that in the event of failure on the part of assessee to comply with the notices and resolve the discrepancies the application would be rejected and provisional registration granted to it on earlier occasion would be cancelled. In absence of compliance from the appellant assessee, the Ld. CIT(E) was constrained to reject to grant regular registration and cancel the provisional registration granted to appellant on 18/06/2023 u/s 12AB r.w.s. 12A(1)(ac)(vi) of the Act as he could not draw any satisfactory conclusion about very existence of Trust, genuineness of activities of the appellant and satisfaction over compliance of requirements of any other law for the time being in force as are material for the purpose of achieving objective. The Mango House Trust Vs CIT(E) ITA Nos.200 & 201/PAN/2024 ITAT-Panaji Page 3 of 6 ITA No. 200/PAN/2024 5. The long and short of the case is that; the appellant’s application for provisional registration u/s 80G(5)(iv) of the Act was accepted by the respondent Revenue and certificate to that effect vide order dt. 18/06/2023 was issued. In compliance of terms of condition of provisional registration and applicable provisions of the Act, the assessee vide its application From No. 10AB CIT EXEMPTION, Bangalore/2023-24/12AA/13054 dt. 18/06/2023 applied for regular/final 80G approval/registration. 6. On the appellant’s effective failure to annexe required documents as contemplated u/r 17A(2)(k) of IT-Rules and discrepancies noted by the field inquiry officer, the Ld. CIT(E) by email dt. 29/05/2024 accorded an opportunity to make good the deficiency. It was also informed by the registering authority that in the event of failure on the part of assessee to comply with the notices and resolve the discrepancies the application would be rejected and provisional registration granted to it on earlier occasion would be cancelled. In absence of compliance from the appellant assessee, the Ld. CIT(E) was constrained to reject to grant regular registration and cancel the provisional registration granted to appellant on 18/06/2023 u/c (iv) of first proviso to s/s (5) of section 80G of the Act as he could not draw The Mango House Trust Vs CIT(E) ITA Nos.200 & 201/PAN/2024 ITAT-Panaji Page 4 of 6 any satisfactory conclusion about the very existence of appellant and genuineness of activities of the appellant vis-a-vis satisfaction over compliance of requirements of any other law for the time being in force as are material for the purpose of achieving objective. 7. Aggrieved assessee brought up the present appeals before Tribunal on common five grounds which substantively alleges the violation of principle of natural justice for not providing opportunity to comply with the notices and cure the defects notified by email. 8. We note that, the statue empowers the registering authority to call any such documents or information so as to satisfy himself with twin prescriptions of the Act viz; (A) genuineness of activities (B) Compliance with all applicable laws etc., and in order to draw conclusion over satisfaction the registering authority is duty bond to carry out wholesome & autonomous exercise according to nature/character of charitable purpose vis-a-vis the applicant engaged into. In arriving to conclusion over satisfaction about the genuineness of activities and compliance of applicable law, the registration proceedings is expected to vouch predominantly; (i) whether applicant is a public charitable trust established in accordance with applicable law & in operation as such [Constitution/Establishment] (iii) whether all the entries of object clause are in consonance with the ‘charitable The Mango House Trust Vs CIT(E) ITA Nos.200 & 201/PAN/2024 ITAT-Panaji Page 5 of 6 purpose’ as defined by section 2(15) of the Act [Objects] (iv) whether there exist any implied or express provision in the constitutional & other administrative documents/policies etc., entitling any right or power to the trust/trustee carry to engage (by itself or through agent/appointees) into any activities outside the ambit of registered objects [Rights/Power] (vi) whether all the activities and operation are strictly carried out in line with the registered objects of ‘charitable in nature’ [Activity] and finally (vii) whether it is compliant of all the applicable law in all respect and around the clock[Compliance]. Any proceedings culminated without vouching these former key factual (Corac) would prima-facie be deficient as it may lead to absurd conclusion. 9. In the instant both cases we find that, owning to absence of evidential documents and failure on the part of appellant to cure notified deficiencies constrained the Ld. CIT(E) to culminate registration proceedings without former wholesome & autonomous exercise. We also note that, vide notice dt. 29/05/2024 the appellant in both the proceeding was accorded only six days to cure the defects & explain the discrepancies. The notices requiring appellant to comply allowed much less than a reasonable period of fifteen days which in our considered view suggest denial of real opportunity, hence violative of The Mango House Trust Vs CIT(E) ITA Nos.200 & 201/PAN/2024 ITAT-Panaji Page 6 of 6 principle of natural justice. While holding so we place on reliance on ‘Smt. Ritu Devi v. CIT’ [2004, 141 Taxman 559 (Mad.)] wherein their Hon’ble lordships have held that, time of just few days was given to the assessee to furnish reply which was also held as denial of real opportunity as it was just a paper opportunity. On the other hand, the reasons behind non-compliance as explained in our considered view are sufficient for setting aside the impugned rejections which the Ld. DR could hardly object. 10. In view hereof, without commenting on merits we set-aside the impugned rejections and cancellation of provisional registrations, and in result remit these matters back to the file of Ld. CIT(E) at the stage of issuance of notice dt. 29/05/2024 for their de-novo consideration in accordance with law in three effective hearing opportunities to the appellant assessee. 11. In result, both these appeals are allowed for statistical purposes. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on date mentioned herein before. -S/d- -S/d- PAVAN KUMAR GADALE G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER Panaji/Dt: 13th day of November, 2024. Copy of the Order forwarded to : 1. The Appellant. 2. The Respondent. 3. The ITO/CIT Concerned. 4. PCIT Concerned 5. DR, ITAT, Panaji Bench, Panaji 6. Guard File By Order, Sr. Private Secretary / AR ITAT, Panaji. "