The Jaipur Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the matter to the Commissioner of Income Tax (Exemption)[CIT(E)] for reconsideration after the rejection of a registration application under Section 12AB of Income Tax Act, 1961.
Nidhivan Foundation ,appellant-assessee, applied for registration under section 12AB on 14.09.2023. The CIT(E) issued a notice on 02.12.2023, requesting documents by 12.12.2023, but no response was received. A reminder was sent on 27.12.2023, and a reply was filed on 10.01.2024.
Finding discrepancies, the CIT(E) issued a show-cause notice on 20.02.2024. After reviewing the reply submitted on 01.03.2024, the registration was denied due to non-registration under the Rajasthan Public Trust Act, benefit to interested persons, and non-genuine activities.
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The application for registration under section 80G was also rejected, as it required prior registration under section 12AB of the Act. The CIT(E) further canceled the provisional registration due to a lack of justification for its regularization.
The assessee appealed before the tribunal aggrieved by the decision.
The assessee’s counsel argued that the rejection was based on curable issues and that sufficient opportunity was not given. It was stated that the trust had applied for registration under the Rajasthan Public Trust Act, and a copy of the certificate was submitted. An affidavit was also provided, clarifying that the bill issue was due to the other party’s mistake. The counsel requested the matter to be remanded.
In response the revenue counsel supported the CIT(E)’s order, stating that the assessee failed to submit the required details despite multiple opportunities. It was also pointed out that an invoice dated 20.03.2024 could not have been submitted with a reply dated 01.03.2024.
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The two member bench comprising Sudhir Pareek ( Judicial Member ) and Rathod Kamlesh Jayanbhai ( Accountant Member ) noted that the CIT(E) rejected the assessee’s registration under section 12AB due to non-registration under the Rajasthan Public Trust Act, benefit to interested persons, and non-genuine activities. However, the assessee obtained registration on 22.05.2024. An affidavit clarified that a billing error was due to a clerical mistake.
Finding the issues curable, the tribunal ruled that the assessee should get another chance to submit the required documents. The matter was remanded to the CIT(E) for reconsideration, with no opinion on the merits.
In short,the appeal filed by the assessee was allowed for statistical purposes.
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