The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) held that in order to prevent miscarriage of justice, the assessee was provided one more opportunity of being heard in support of its case for registration of the trust under Section 12AB of the Income Tax Act.
The assessee filed application under Section 12AB of the Income Tax Act on 31.03.2022 in Form No. 10AB under Rule 17A of the Income Tax Rules, 1962. The CIT(E) issued a notice dated 16-07-2022 through ITBA on the e-mail id given by the assessee, requesting to furnish detailed note on the activities carried out by the trust, as well as certain details/documents as mentioned therein. As there was no response, three more opportunities were provided to the assessee by issuing notices on 03-08-2022, 07-09-2022 and 15-09-2022 directing the assessee to furnish the details called for.
However, the CIT(E) found the submissions filed by the assessee does not contain complete details/documents, such as detailed note on the nature of activities and projects, the details of main charitable/religious undertaken in the last 3 years, details of application of funds, details of other laws material for the purpose of achieving objects and compliance thereof, whether any commercial activities are undertaken, details of donations received and given and not filed undertaking under Section 2(15) , 11(5), 13(1)(c) & 13(3) of the Income Tax Act, undertaking regarding adherence towards all the requirements of law as are material for the purpose of its objects as enumerated in the Trust Deed.
Therefore, following Principle of natural Justice, final opportunity was given to the assessee by issuing another notice on 15-09-2022 by the CIT(E). However in response to the said notice neither the assessee furnished any details nor sought any adjournment. Therefore, the CIT(E) constrained to dispose of the application for registration under Section 12AB of the Income Tax Act on the basis of material available on record and rejected the application filed in Form No. 10AB for the registration under Section 12AB of the Income Tax Act.
Aggrieved against this rejection order, the assessee appealed before the tribunal.
After hearing both the parties, the tribunal noted that CIT(E) had not contravented exact deficiency in the documents submitted by the assessee and exact nature of clarification, explanation required from the assessee, but rejected the registration application under Section 12AB of the Income Tax Act. Further the assessees are existing and carried the objects enumerated in the trust for long time.
The two member bench consisting of Waseem Ahmed (Accountant member) and T.R Senthil Kumar (Judicial member) held that in order to prevent miscarriage of justice, the aseesee was provided one more opportunity of being heard to the assessee in support of its case for registration of the trust under Section 12AB of the Income Tax Act. Therefore the appeal was disposed by restoring this issue to the file of the CIT(E) with a direction upon him to provide further opportunity of being heard to the assessee and consider the documents, evidences which the assessee wou file as per the notice issued by the CIT(E). Needless to say if the assessee fails to co-operate with the CIT(E) as directed, the CIT(E) would be at liberty to pass orders strictly in accordance with law.
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