The Bangalore Bench of the Income Tax Appellate Tribunal ( ITAT ) remanded the matter concerning the rejection of the Foundation’s application for approval under Section 80G (v) of the Income Tax Act, 1961, after observing that the Commissioner of Income Tax (Exemptions) [CIT(E)] denied the approval due to the foundation’s failure to comply with notices.
MJN Foundation, the assessee, is a charitable institution that was previously granted registration under Section 12A of the Income Tax Act, confirming its recognized charitable activities. The foundation filed Form No. 10AB on 29.03.2024, seeking approval under Section 80G(v) for tax-deductible donations.
The CIT(E) issued two notices dated 22.07.2024 and 23.08.2024, providing the assessee an opportunity to present its case. The assessee failed to comply with the notices and did not furnish sufficient documentary evidence to substantiate its genuine charitable activities as required under the provisions of the Act.
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Considering the lack of compliance, the CIT(E) rejected the application for approval under Section 80G(v). The assessee appealed the decision before the ITAT, arguing that its submissions were not adequately considered and requesting another opportunity to substantiate its activities.
The two-member bench comprising Laxmi Prasad Sahu (Accountant Member) and Soundararajan K. (Judicial Member) considered the arguments from both parties. The tribunal observed that the CIT(E) had not fully evaluated the evidence provided by the foundation and emphasized the need for fair reassessment.
The tribunal directed the CIT(E) to re-examine the matter, allowing the foundation to provide all necessary documentation to substantiate its case. It also directed the CIT(E) to ensure the foundation receives a reasonable opportunity to be heard during the proceedings.
The tribunal warned that the foundation must cooperate with the proceedings, and any further non-compliance would result in no leniency being granted. The case was remanded to the CIT(E) for fresh adjudication, and the appeal was allowed for statistical purposes.
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