Case Number: ITA 3005/DEL/2022
Appellant: Pragyawan Foundation, Ghaziabad
Respondent: ITO, Exemption, Ghaziabad
Assessment Year: –
Case Filed On: 2022-12-23
Order Type: Final Tribunal Order
Date of Order: 2023-08-24
Pronounced On: 2023-08-24
In the case of Pragyawan Foundation vs. ITO, Exemption, Ghaziabad, the appellant, Pragyawan Foundation, challenged the rejection of registration under Section 12AB of the Income-tax Act, 1961. The case was heard by the Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘F’ on 22nd August 2023, with the final order pronounced on 24th August 2023.
The appeal arose from the order passed by the Commissioner of Income-tax (Exemption), Lucknow on 27th October 2022. The appellant, represented by Shri Rohan Sogani, CA, argued that the CIT (Exemptions) had erred in rejecting the application for registration under Section 12AB without providing adequate opportunity to the appellant to make requisite submissions.
During the proceedings, the counsel for the appellant contended that the application for registration under Section 12A(1)(ac)(iii) was filed on 28th April 2022 in Form No.10AB. The CIT (Exemptions) noted that several notices were issued for the appellant’s compliance, but the appellant did not respond. Consequently, the CIT (Exemptions) concluded that the charitable nature and genuineness of the activities could not be verified, and the application was treated as non-maintainable.
The appellant’s counsel argued that the notices provided were too short and requested another opportunity for the appellant to present the necessary documents and information.
The ITAT bench, comprising Shri Shamim Yahya (Accountant Member) and Shri Yogesh Kumar US (Judicial Member), acknowledged the appellant’s request for additional time to comply with the notices. The tribunal decided to remit the issue back to the CIT (Exemptions) for reconsideration, ensuring the appellant is given an adequate opportunity to present their case.
The tribunal’s order stated: ‘In the interest of justice, we remit the issue to the file of CIT (Exemptions). The CIT (Exemptions) will consider the issue afresh after providing the appellant an opportunity of being heard.’
The appeal was allowed for statistical purposes, meaning the matter was sent back to the CIT (Exemptions) for reevaluation.
The ITAT’s decision highlights the importance of providing adequate opportunities for appellants to present their cases and the necessity for thorough verification of charitable activities before rejecting applications for registration under Section 12AB of the Income-tax Act.
Order Pronounced: In the open court on 24th August 2023.
Bench: Shri Shamim Yahya, Accountant Member and Shri Yogesh Kumar US, Judicial Member
Copy forwarded to:
Date of Hearing: 22nd August 2023
Date of Order: 24th August 2023
The appellant, Pragyawan Foundation, filed an application dated 28th April 2022 for registration under section 12A(1)(ac)(iii) of the Income-tax Act, 1961, in Form No.10AB. The CIT (Exemptions) issued several notices for compliance, but due to the appellant’s failure to respond, the application was rejected.
The appellant’s counsel argued that the notices provided were insufficient in time, thereby preventing the appellant from making the necessary submissions. They requested that another opportunity be given to present the required documents and information.
In the tribunal’s order, it was noted that: ‘As the application has been submitted under sub-clause (iii) of 12A(1)(ac), an enquiry letter requiring documents and information was sent to verify the genuineness of the activities as well as the charitable nature and commencement of the activities. In the absence of any reply, the charitable object and genuineness of the charitable activities of the appellant could not be proved. Hence, the application of the society is treated as non-maintainable.’
Despite the rejection, no adverse inference was drawn against the appellant, and the rejection of the application did not affect any provisional approval granted under sections 12A/80G(5) of the Act by the CPC.
The tribunal, considering the request for a fair chance to present the case, remitted the issue back to the CIT (Exemptions) for fresh consideration. The CIT (Exemptions) was instructed to provide the appellant with an opportunity of being heard before making a final decision.
The tribunal’s decision underscores the importance of due process and fairness in the evaluation of applications for charitable registration under the Income-tax Act. The remittance of the case back to the CIT (Exemptions) ensures that the appellant is given a fair opportunity to comply with the requirements and substantiate their claim for registration.
Overall, the ITAT’s order serves as a reminder of the need for thorough and fair assessment procedures, especially in matters involving charitable organizations seeking tax exemptions and registrations under the Income-tax Act.
Pragyawan Foundation vs. ITO, Exemption, Appeal under Section 12AB for Registration, 2023
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