The Jodhpur Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the case back to the Assessing Officer ( AO ) for a fresh examination of its registration status under Section 12AA and the applicability of Sections 11 and 12 of the Income Tax Act,1961.
Greenwel Children Society, the appellant-assessee, a charitable trust,filed a NIL return for A.Y. 2018-19. The return was picked for scrutiny as the assessee’s registration and approval were either not granted or cancelled. Notices under sections 143(2) and 142(1) were issued, and the assessment proceeded through the Faceless e-Assessment Scheme 2019.
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Due to assesse’s non-appearance during proceedings, the Assessing Officer ( AO ) passed an order under section 144, disallowing Rs. 29,54,421 and denying benefits under sections 11 and 12 of the act resulting in an assessed income of Rs. 29,58,940. The assessee’s registration application under section 12AA had been rejected.
The assessee filed an appeal before the CIT(A).Despite notices issued on 19.10.2023, 30.10.2023, and 22.11.2023, there was no response from the assessee.As a result, the CIT(A), without discussing the merits of the case, upheld the AO’s order. The assessee then appealed before the tribunal.
At the tribunal hearing, it was noted that the appeal was filed 107 days late. The delay was attributed to the death of the assessee’s Authorized Representative, Mr. Nitin Jalan, during the COVID-19 pandemic in 2021, resulting in complications accessing the income tax portal. The assessee later approached another representative, paid the required fees on 25.04.2024, and filed the appeal on 07.06.2024. Despite objections from the Departmental Representative ( DR ), the tribunal condoned the delay, citing sufficient cause and the principles of substantial justice.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
On merits, the bench observed that the primary issue was whether the assessee held valid registration under Section 12AA. The tribunal found that the AO’s denial of benefits under Sections 11 and 12 was based on the rejection of the assessee’s registration. However, the CIT(A) had failed to examine the merits of the case.
The appellate tribunal noted that the assessee missed hearings due to notices sent to the registered email and the death of their Chartered Accountant. The authorised representative requested the case be remanded for submitting relevant documents.
Consequently, the tribunal remanded the case back to the AO, directing the assessee to substantiate its claim of registration under Section 12AA and the applicability of Sections 11 and 12. The AO was instructed to re-examine the case, particularly the disallowance of expenses, and assess whether they were incurred for the trust’s charitable objectives.
The two member bench comprising Yogesh Kumar U.S ( Judicial Member ) and Prashant Maharishi ( Accountant Member ) allowed the appeal filed by the assessee.
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