VIKRAM FOUNDATION,NAIGAON,NASHIK V. CII(EXEMPTION), PUNE, PUNE

ITA 1321/PUN/2024

AI Insights

The case involves Vikram Foundation appealing against the order of the Commissioner of Income Tax (Exemption), Pune, which rejected their application for regular registration under section 12AB of the Income Tax Act. The rejection was based on the foundation's failure to annex required documents and comply with notices to rectify deficiencies. The Tribunal found that the foundation was not given a reasonable period to comply, which constituted a violation of the principles of natural justice. Consequently, the Tribunal set aside the rejection and remitted the matter back for re-evaluation.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 473488 (ITAT-PUNE)
• Duration Of Justice: 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-09-2024
• Assessment Year: misc
• Appeal Filed On: 08-06-2024
• 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: AJAY KUMAR KESARI LD.
• Assessee Lawyers: SATISH CHAVAN LD.
• Keywords: Principle of natural justice; Charitable institution

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, PUNE ‘B’ BENCH, PUNE ITAT-Pune Page 1 of 4 BEFORE HON’BLE SMT ASTHA CHANDRA JUDICIAL MEMBER AND SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.1321/PUN/2024 Vikram Foundation At Post: Naigaon, Tal.: Sinnar, Dist.: Nashik-422102 PAN: AACTV5580G .......अपीलार्थी / Appellant V/s The Commissioner of Income Tax (Exemption), Pune ....... प्रत्यर्थी / Respondent Appearances Assessee by : Mr Satish Chavan [‘Ld. AR’] Revenue by : Mr Ajaykumar Kesari [‘Ld. DR’] Date of conclusive Hearing : 30/09/2024 Date of Pronouncement : 01/10/2024 ORDER PER G. D.PADMAHSHALI, AM; By present appeal, the assessee impugned the order of rejection passed u/s 12A(1)(ac)(vi)of the Act by the Commissioner of Income Tax (Exemption), Pune [for short ‘CIT(E)’] vide DIN & order No. ITBA/EXM/F/EXM45/2024-25/1064085904(1) dt. 15/04/2024 2. We have heard rival parties; and subject to provisions of rule 18 of ‘ITAT Rules’, perused material placed on record and we note that, the appellant vide Form No. 10AB dt. 30/10/2023 filed an application to the respondent under clause (iii) of section 12A(1)(ac) of the Act thereby Vikram Foundation Vs CIT(E) ITA No. 1321/PUN/2024 ITAT-Pune Page 2 of 4 seeking regular/final registration u/s 12AB of the Act. The appellant’s effective failure to annexe required documents as contemplated u/r 17A(2)(k) of IT-Rules, the Ld. CIT(E) by notice dt. 11/01/2024 accorded an opportunity to make good the deficiency. In the event of failure vide further notice dt. 01/04/2024 one more opportunity was granted to cure the defects & remove the discrepancies notified. 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 12/05/2022 u/s 12AB r.w.s. 12A(1)(ac)(vi) of the Act as he could not draw any satisfactory conclusion about 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 its stated objective. 3. 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 section 12AB(1)(b)(i) 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 Vikram Foundation Vs CIT(E) ITA No. 1321/PUN/2024 ITAT-Pune Page 3 of 4 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 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. 4. In the instant case we find that, owning to absence of evidential documents and failure on the part of appellant to cure all the notified deficiencies it constrained the Ld. CIT(E) to culminate the impugned registration proceedings without former wholesome & autonomous exercise. We also note that, vide notice 01/04/2024 the appellant was Vikram Foundation Vs CIT(E) ITA No. 1321/PUN/2024 ITAT-Pune Page 4 of 4 accorded only seven days to cure the defects & explain the discrepancies. The notice requiring appellant to comply allowing less than a reasonable period of fifteen days in our considered view suggest denial of real opportunity, hence violative of 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. 5. On the other hand, the reasons behind non-compliance as explained in our considered view are sufficient for setting aside the rejection which the Ld. DR could hardly object. In view hereof, without commenting on merits we set-aside the impugned rejection and cancellation of provisional registration, and consequently remit the matter back to the file of Ld. CIT(E) at the stage of issuance of notice dt. 01/04/2024 for de-novo consideration in accordance with law after giving three effective opportunities to the appellant assessee. 6. The appeal in result is ALLOWED FOR STATISTCIAL PURPOSES. U/r 34 of ITAT Rules, order pronounced in open court on this Tuesday, 01st day of October, 2024. -S/d- -S/d- ASTHA CHANDRA G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / PUNE; दिन ांक / Dated : 01st day of October, 2024. आदेशकीप्रतितितिअग्रेतिि / Copy of the Order forwarded to : 1.अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr.CIT(Exemption),Pune 4. The CIT-Concerned(MH-India) 5. DR, ITAT, Bench ‘B’, Pune 6.ग र्डफ़ इल / Guard File. आिेश नुस र / By Order वररष्ठदनजीसदिव / Sr. Private Secretary आयकरअपीलीयन्य य दिकरण, पुणे / ITAT, Pune. "