S.12A Registration Declined Due to No Proof of Charitable Activities: ITAT Remands Matter to CIT(E) for Verification of Documents [Read Order]

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the order passed by the Commissioner of Income Tax (Exemptions) ( CIT(E) ) rejecting registration under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961 of an assessee, and remanded the matter for fresh adjudication after proper verification of supporting documents.

The assessee-appellant, Dharmarth Education Centre, had filed an application for registration under Section 12A(1)(ac)(iii) of the Act. In response, the CIT(E) issued a questionnaire asking the assessee to submit all necessary documents to prove its charitable activities.

According to the CIT(E), despite being given adequate opportunities, the assessee failed to produce sufficient documents, and the application was rejected.

The assessee contended before the tribunal that it had submitted all the required documents, but the CIT(E) had ignored and rejected the application without properly verifying the material on record.

At the hearing before the Tribunal, no one appeared for the assessee. However, considering the nature of the issue, the Tribunal decided to adjudicate the matter after hearing the Departmental Representative (DR) and perusing the material available on record.

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The Bench comprising M. Balaganesh (Accountant Member) and Yogesh Kumar U.S. (Judicial Member) observed that the reason for rejection was the failure to prove charitable activities through bills/vouchers and supporting documents. However, the assessee maintained in its appeal grounds that such documents were submitted.

The Tribunal held that it was fit to restore the issue to the file of the CIT(E) with a direction to the assessee to produce all requisite documents in support of its claim and the CIT(E) was directed to verify the documents and decide the application for registration filed by the assessee afresh in accordance with law after affording sufficient opportunity of being heard.

Accordingly, the Tribunal set aside the order of the CIT(E) and restored the matter for fresh adjudication.

The Revenue was represented by Surender Pal, while no one represented the Assessee.

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