Society's Secretary Resigned when notice issued: ITAT directs CIT(E) to reconsider Application u/s 12AB [Read Order]

The Hyderabad Bench of the Income Tax Appellate Tribunal ( ITAT )directed the Commissioner of Income Tax (Exemptions) [CIT(E)] to reconsider the application filed under Section 12AB of the Income Tax Act, 1961  by the assessee which was rejected due to non-compliance.

Assessee, Idam Braahman Society, applied for registration under Section 12AB of the Income Tax Act, 1961. The CIT(E) sent notices to provide the necessary documents. The assessee failed to produce a copy of the Memorandum of Association/trust deed for verification and to reply to any notices. Due to non-compliance, the CIT(E) rejected the application submitted under section 12AB of the Income Tax law.

Get a Copy of Income Tax Refunds (Law & Procedure), Click here

After the rejection, the assessee appealed before the ITAT, Hyderabad claiming that the assessee was unaware of the notices due to the society Secretary’s resignation at that time. The assessee’s counsel submitted that the assessee collected the required documents from the resigned secretary to file this appeal. The assessee's counsel argued that the assessee did not stand to gain anything by not responding and requested an opportunity to submit the required documents.

The Commissioner of Income Tax (E)’s counsel represented by Kumar Pranav argued that the reasons given by the assessee were not within their knowledge and it was up to the assessee to prove such facts to seek further opportunity.

The two-member bench of K. Narasimha Chary (Judicial Member) and Madhusudan Sawdia (Accountant Member) heard the arguments from both sides.

Get a Copy of Income Tax Refunds (Law & Procedure), Click here

The tribunal highlighted that the assessee could not submit the required documents due to the resignation of the society’s secretary around that time which does not appear to be suspicious. The tribunal also noted that the assessee was not aware of the notices.

The tribunal decided to give an opportunity to the assessee by setting aside the impugned order of the CIT(E).

The tribunal thus directed the CIT(E) to restore the matter back on the file. It was  made it clear that no further opportunity would be given to the assessee and it should co-operate with the CIT(E) throughout the proceedings.

The appeal was thereby allowed for statistical purposes.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates