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Judgment
ORDER
PER NAVEEN CHANDRA, ACCOUNTANT MEMBER :
This captioned appeal has been filed by the assessee against the order of the learned Commissioner of Income Tax (Exemption)-NFAC, Delhi [‘CIT(A)’ in short] dated 27.11.2024.
The grounds raised by the assessee are as under :
1.That the learned Commissioner of lncome Tax (Exemption) erred in law and on facts in rejecting the Appellant's application for regular registration under section 12A(1)(ac)(iii) of the Act merely on account of non-filing of replies, without adjudicating the application on merits.
2.That the learned CIT (Exemption) failed to appreciate that non-compliance was neither willful nor deliberate but occurred due to bona fide dependence on a professional advisor, and therefore rejection on such technical grounds is unsustainable in law.
3.That the impugned order is violative of the principles of natural justice, as the Appellant was denied a meaningful opportunity of being heard on the merits of its charitable objects and activities.
4.That the learned CIT (Exemption) erred in cancelling the provisional registration dated 22.12.2022, without recording any finding that the objects of the trust are non-charitable or that the activities are not genuine, as required under section 12AB of the Act.
5.That cancellation of provisional registration solely on the ground of noncompliance is bad in law and contrary to the legislative intent of sections 12A and 12AB of the Act.
6.That the learned CIT (Exemption) failed to exercise jurisdiction judiciously, as the power under section 12AB is to examine the charitable nature and genuineness of activities and not to summarily reject applications for procedural lapses.
7.That the impugned order is arbitrary, excessive and unsustainable, as it results in grave hardship to the Appellant trust, which is engaged in charitable activities for public welfare. 8. That the Appellant craves leave to add, alter, amend or withdraw any ground of appeal at or before the time of hearing.
8.All the above grounds are independent and without prejudice to one another That the appellant craves lea.ve to add, amend or alter any or all grounds of appeal, with the proper permission of the Hon’ble Bench.”
Brief facts of the case are that the assessee filed application in Form 10AB for registration u/s 12A(1)(ac)(iii) of the Income Tax Act, 1961 on 31.05.2024 which was rejected by for regular registration merely on account of non-filing of replies, without adjudicating the application on merits.
The sole issue in the case is rejection of assessee’s application for registration under section 12A(1)(ac)(iii) of the Income Tax Act, 1961.
It is the say of the learned Counsel of the assessee that the learned CIT(E) has rejected the application on account of non-filing of replies and has not adjudicated the application on merit. It is the say of the counsel of the assessee that non-compliance was neither willful nor deliberate but occurred due to bona fide dependence on a professional advisor and brought for setting aside the matter to the CIT(E).
Per contra, learned DR did not raise any serious objection.
We have heard the rival submissions and perused the material available on record. We find that the application in Form 10AB for registration under Section 12A(1)(ac) (iii) of the Income-tax Act, 1961 was rejected by the Ld. CIT(E) who passed an ex parte order rejecting the application and also cancelled the provisional registration primarily on the ground of non-submission of certain documents. We find that the CIT(E) did not examine whether the objects of the trust were non-charitable or that the activities of the trust were genuine. The rejection of registration merely for non-submission of documents, without examining the charitable objects and genuineness of activities of the trust, is not justified. We are of the view that the non-availability of professional advisor is sufficient cause for non compliance. In such facts and circumstances, we are of the considered view, in the interest of natural justice, that the issue be set aside to the file of the CIT(E) for a fresh adjudication. The ld CIT(E) is further directed to provide adequate three effective opportunities to the assessee. The assessee is also directed to avail the opportunities and submit requisite documents as and when required by the CIT(E).
In the result, appeal of the assessee is allowed for statistical purposes.