Rejection of 12AB Registration for Overseas Fund Use: ITAT Restores Matter to CIT(E) for Fresh Adjudication [Read Order]

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) restored the matter to Commissioner of Income Tax(Exemption)[CIT(E)] for fresh adjudication after assessee’s application for registration under section 12AB of Income Tax Act1961 was rejected due to intended overseas fund use

Discover Ekam Foundation,appellant-assessee, sought registration under section 12AB by filing Form 10AB. The application was rejected because the trust deed showed that the funds were intended to be applied outside India.

The assessee counsel contended that the CIT(E) had rejected the registration application without providing adequate opportunity of being heard. The counsel submitted an affidavit confirming that the funds would be applied for international welfare and highlighted the revised Memorandum of Association and supporting documents filed with the Ministry of Corporate Affairs. It was argued that no provisions of the Act were violated and the application was wrongly rejected.

The Departmental counsel,however, relied on the orders of the authorities.

The two member bench comprising Sandeep Gosain(Judicial Member) and Prabhash Shankar (Accountant Member) observed that the assessee had submitted a detailed affidavit and a revised Memorandum of Association, along with supporting documents filed with the Ministry of Corporate Affairs, showing that the objects had been amended.

In view of these changed circumstances, the tribunal held that the matter required reconsideration by the CIT(E). Accordingly, the tribunal restored the matter for fresh decision, directing the CIT(E) to consider the documents and provide the assessee an opportunity of being heard.

The appellate tribunal clarified that this action did not express any opinion on the merits, which were to be decided independently by the CIT(E). Accordingly the appeal was allowed for statistical purposes.

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