The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) held that the rejection of registration of Trust under Section 12 AB of Income Tax Act, 1961 due to alleged non-genuineness of activities and non-registration under Rajasthan Public Trust Act, 1959, warrants a de novo consideration by the Commissioner of Income Tax (Exemption) CIT(E).
The appellant-assessee, Community for the Advancement of Education & Research, a trust, had applied to the respondent CIT(E) for registration under Section 12 AB of the Income Tax Act, 1961, but the application was rejected due to alleged non-compliance.
R.P Sharma,counsel representing the appellant argued that the Trust stands registered under Rajasthan Public Trust Act, 1959, as evidenced by the registration certificate filed at page 36.
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The averment regarding Poddar International College taking over the campus was incorrect and inadvertently included in the pleadings.
No show cause notice was issued by CIT(E) regarding the details stated to have not been furnished by the applicant trust.
Arvind Kumar,arguing on behalf of Revenue contended that the application for registration under section 12 AB of the Income Tax Act, 1961, was rejected due to non-registration under Rajasthan Public Trust Act, 1959, and non-genuineness of activities.
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Also the applicant trust did not furnish necessary details and documents, including those related to the taking over of the campus by Poddar International College.
The two-member Bench comprising Shri Rathod Kamlesh Jayantbhai, Accountant Member, and Shri Narinder Kumar, Judicial Member, observed that the matter deserves to be remanded to the learned CIT(E) for decision on the application afresh.
The Bench observed that in view of the specific averment regarding taking over of the campus by Poddar International College, the Learned CIT(E) was required to conduct an enquiry and look into relevant documents or details.
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It was of the considered view that the appellant deserves reasonable opportunity to make good the defects/shortcomings, and thus, the impugned order was set aside and the matter was remitted back to the file of CIT(E) for de-novo consideration.
Thus, the appeal is allowed for statistical purposes, and the matter is remitted to the CIT(E) for decision on the application afresh after providing reasonable opportunity to the appellant of being heard.
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