WORSHIP EARTH FOUNDATION,PUNE V. CIT (EXEMPTIONS) PUNE, PUNE

ITA 2152/PUN/2024

AI Insights

The case involves Worship Earth Foundation, which appealed against the orders of the CIT (Exemption), Pune, rejecting their applications for registration under section 12A and approval under section 80G of the Income Tax Act, 1961. The CIT (Exemption) had initially rejected these applications due to non-compliance and discrepancies noted in the activities and financial statements of the trust. The Tribunal found that the assessee was not given a fair opportunity to address the discrepancies and thus restored the matter to the CIT (Exemption) for a fresh decision, allowing the assessee to present the necessary details to substantiate their claims.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 24640 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY KUMAR KESHARI
• Assessee Lawyers: SURESH WADHWA
• Section: 12A; 10(23C); 80G

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER ITA Nos.2153 & 2152/PUN/2024 Worship Earth Foundation A1/23, Rambaug Colony, LBS Road, Navipeth, Pune – 411030 Vs. CIT (Exemption), Pune PAN: AADCW0987E (Appellant) (Respondent) Assessee by : Shri Suresh Wadhwa Department by : Shri Ajay Kumar Keshari, CIT Date of hearing : 18-03-2025 Date of pronouncement : 18-03-2025 O R D E R PER BENCH: The above two appeals filed by the assessee are directed against the separate orders dated 20.08.2024 of the Ld. CIT(Exemption), Pune rejecting the application seeking grant of registration u/s 12A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) as well as grant of approval u/s 80G of the Act. For the sake of convenience, both these appeals were heard together and are being disposed of by this common order. ITA No.2153/PUN/2024 2. Although a number of grounds have been raised by the assessee, however, these all relate to the order of the Ld. CIT(E) in rejecting the application for grant 2 ITA Nos.2152 & 2153/PUN/2024 of registration u/s 12A and cancelling the provisional registration granted earlier u/s 12AB of the Act. 3. Facts of the case in brief, are that the assessee filed an application in Form No.10AB on 20.02.2024 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 force by the trust / institution as are material for the purpose of achieving its objects, a notice was issued through ITBA portal on 01.05.2024 requesting the assessee to upload certain information / clarification. In response to the same, the assessee filed certain details. While going through the said details, the Ld. CIT(E) noticed various discrepancies for which he issued another notice to the assessee asking it to explain as to why the application should not be rejected and the provisional registration granted earlier u/s 12AB be not cancelled. However, despite the service of notice issued by the Ld. CIT(E), the assessee did not make any submission for which the Ld. CIT(E) rejected the application for grant of registration u/s 12A of the Act and cancelled the provisional registration granted earlier u/s 12AB of the Act by observing as under: “3.1 The assessee was requested to show cause as to why the application should not be rejected and why the registration granted under section 12AB of the Income Tax Act, 1961 should not be cancelled. The assessee was also given opportunity of being heard vide the said notice. The assessee was specifically informed that in the event of failure to comply by the due date, the application shall be liable to be rejected and the registration shall also be liable to be cancelled. The compliance to the said notice was due on 08/08/2024. The notice was duly served on the assessee through e-portal and email. 3 ITA Nos.2152 & 2153/PUN/2024 4. After verification of the documents of the assessee it is seen that the over all primary Objects is/are charitable/educational which included relief of the poor/education/medical relief. From the financial statement it is seen that the assessee is having income from Donations and CSRs funds and project works. However after verification of the submissions it is seen that the assessee has furnished the details of note on activity wherein the assessee claimed various activities viz. Environment cleaning/ awareness/ seminars/ constitution day celebration/voters day celebration/voters awareness/River cleaning projects/Jayanti Nala Cleaning drives/My reiver my valentine/food distribution etc. In support of his claim the assessee has submitted some photographs. The financial statements reveals that the major expenses of the assessee is employee benefits i.e. salaries and other expenses includes mostly establishments /administration expenses. It is clear that the assessee is engaged in activities of general public utility for a consideration and the expenditure Incurred as per financial statements is/are on administrative / establishment purposes. No expenditure on charitable object is made during last three years. Also, the assessee failed to furnish credible evidences such bills/invoices in support of the activities claimed by the trust and considering the fact that no expenditure is shown on charitable objects as compared to expenditure on establishment i.e Salaries (employee benefits), the satisfaction about the genuineness of activities could not be arrived at. 5. Considering the above facts discussed in the show notice and discrepancies noticed and also that the assessee has not complied with the provisions of section 12AB(1)(b)(i) of the Income Tax Act, 1961 as well as the provisions of Rule 17A(2) of Income Tax Rules, 1962 in spite giving sufficient opportunities, 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. 6. In view of the above, the application filed by the assessee is hereby rejected and the provisional registration granted on 19/01/2022 under section 12AB read with section 12A(1)(ac) (vi) of the Income Tax Act, 1961 is hereby cancelled.” 4. Aggrieved with such order of CIT(Exemption), the assessee is in appeal before the Tribunal. 5. The Ld. Counsel for the assessee at the outset submitted with folded hands that the Counsel appointed by the assessee trust did not respond to the queries raised in the second notice issued by the Ld. CIT(E) for which all these unfortunate 4 ITA Nos.2152 & 2153/PUN/2024 events happened. He submitted that given an opportunity, the assessee is in a position to substantiate its case by filing the requisite details before the Ld. CIT(E). He accordingly submitted that in the interest of justice, the assessee should be given an opportunity to substantiate its case by filing the requisite details before the Ld. CIT(E). 6. The Ld. DR on the other hand opposed the arguments advanced by the Ld. Counsel for the assessee and submitted that despite due opportunity granted by the Ld. CIT(E), the assessee failed in its duty by clarifying the defects pointed out by the Ld. CIT(E). He accordingly submitted that the order of the Ld. CIT(E) rejecting the application for grant of registration u/s 12A should be upheld and the grounds raised by the assessee be dismissed. 7. We have heard the rival arguments made by both the sides, perused the order of the CIT(E) and the paper book filed on behalf of the assessee. It is an admitted fact that after assessee filed certain details in response to the notice issued by the Ld. CIT(E) for grant of registration u/s 12A, the Ld. CIT(E) noticed certain discrepancies for which he issued another notice to the assessee asking it to explain those discrepancies. However, the assessee failed to submit any response for which the Ld. CIT(E) rejected the application for grant of registration u/s 12A and also cancelled the provisional registration granted earlier. It is the submission of the Ld. Counsel for the assessee that due to the mistake of the concerned Chartered Accountant those details could not be filed. It is also his submission that 5 ITA Nos.2152 & 2153/PUN/2024 given an opportunity, the assessee is in a position 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(Exemption) 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(Exemption) is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes. ITA No.2152/PUN/2024 8. Although a number of grounds have been raised by the assessee, however, these all relate to the order of the Ld. CIT(E) in rejecting the application for grant of approval u/s 80G of the Act. 9. After hearing both sides, we find the Ld. CIT(E) rejected the application for grant of approval u/s 80G of the Act on the ground that the assessee did not respond to the show cause notice issued by him pointing out the discrepancies noticed. Further, the assessee is neither registered u/s 12AB r.w.s. 12A(1)(ac)(i) / 12A(1)(ac)(iii) nor approved u/s 10(23C) read with clause (i) / (iii) of first proviso 6 ITA Nos.2152 & 2153/PUN/2024 to the said section and the case is not covered under the exclusions provided vide proviso to clause (i) of section 80G(5) of the Act. Since it is the submission of the Ld. Counsel for the assessee that given an opportunity, the assessee is in a position to substantiate its case and since we have restored the issue of grant of registration u/s 12A to the file of the Ld. CIT(E) for fresh adjudication, therefore, considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue of grant of approval u/s 80G also to his file for fresh adjudication. Needless to say, the CIT(Exemption) shall grant an opportunity of being heard to the assessee and decide the issue as per fact and law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes. 10. In the result, both the appeals filed by the assessee are allowed for statistical purposes. Order pronounced in the open Court at the time of hearing itself i.e. on 18th March, 2025. Sd/- Sd/- (ASTHA CHANDRA) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 18th March, 2025 GCVSR 7 ITA Nos.2152 & 2153/PUN/2024 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, ‘B’ Bench, Pune 5. गार्ड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण ,पुणे / ITAT, Pune S.No. Details Date Initials Designation 1 Draft dictated on 18.03.2025 Sr. PS/PS 2 Draft placed before author 18.03.2025 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 "