CIT(E) Rejected 12A Registration without Adequate Opportunity: ITAT Restores Matter for Fresh Adjudication [Read Order]

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) restored the matter of fresh adjudication in the matter holding that the CIT(E) had rejected the application for registration under Section 12A of the Income Tax Act, 1961 without Adequate Opportunity.

Shree Sharda Sarvajanik Seva Mandal (assessee) is a charitable trust registered under the Bombay Public Trust Act, 1950. The trust applied in Form 10AB for fresh registration under Section 12A of the Income Tax Act.

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The Commissioner of Income Tax (Exemptions) [CIT(E)] issued notices seeking various details, to which the assessee responded with submissions including its trust deed, audited financials, Form 10BB, and a note on activities. The CIT(E) rejected the application as the assessee failed to respond to the notices.

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Aggrieved by order of CIT(E), the assessee preferred an appeal before the ITAT. The Counsel for the assessee submitted that the trustees lacked familiarity with digital platforms and could not respond in such a short time.

The Counsel highlighted that prior responses had already been submitted to the CIT(E). The Counsel also submitted that the CIT(E) failed to fairly evaluate the documents already on record.

The counsel for the Revenue accepted that adequate opportunity was not provided and supported the remand of the matter for fresh adjudication.

The two-member bench comprising Siddhartha Nautiyal (Judicial Member) and Makarand V. Mahadeokar (Accountant Member), observed that the timeline allowed for reply was unreasonably short and contrary to principles of natural justice.

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The tribunal observed that the CIT(E) failed to evaluate the materials already submitted by the assessee and proceeded mechanically to reject the application. The Tribunal held that the order suffered from procedural infirmity and was liable to be set aside.

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The tribunal restored the matter to the CIT(E) with directions to examine the materials already submitted, allow a reasonable opportunity for further representation, and pass a reasoned and speaking order.

The appeal of the assessee was allowed for statistical purposes.

To Read the full text of the Order CLICK HERE

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