Senior Citizen Not Familiar with Online Systems: ITAT Remands Section 12AB and 80G Matter for Reconsideration [Read Order]

The Rajkot Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the orders of the Commissioner of Income Tax (Exemptions) [CIT(E)] which rejected the application for registration under Section 12AB and approval under Section 80G and remanded the matters for fresh consideration.

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Lothada-Piplana-Padavala Industrial Association (assessee), a trust applied for registration under Section 12AB through Form 10AB and for approval under Section 80G. The CIT(E) issued notices requesting documents to verify the genuineness of the trust’s activities and compliance with relevant laws.

The CIT(E) alleged that the assessee failed to respond to these notices or submit the required documents. The CIT(E) rejected the application for registration under Section 12AB and the application for approval under Section 80G of the Income Tax Act. Aggrieved by the CIT(E)’s orders, the assessee filed appeals before the ITAT.

The Counsel for the assessee argued that the director of the assessee trust, a 68-year-old senior citizen who was less educated and unfamiliar with online compliance systems and email tracking.

The Counsel for the assessee submitted that the assessee relied on an accountant who failed to inform them timely and left the job which led to non-compliance with the CIT(E)’s notices. The counsel submitted that non-response to notices were neither willful or deliberate.

The counsel for the Revenue contended that the assessee’s non-cooperative attitude and failure to submit documents justified the rejection of registration under section 12AB and for approval under section 80Gof the Income Tax Act.

The two-member bench comprising Dr. Arjun Lal Saini (Accountant Member) and Dinesh Mohan Sinha (Judicial Member) observed the assessee’s reasons for delay, including the director’s age, lack of education, and dependence on an uncooperative accountant.

The tribunal further observed that the CIT(E) rejected the applications due to the assessee’s failure to submit documents, but the assessee’s lack of familiarity with online systems contributed to the non-compliance.

The tribunal remanded both matters to the CIT(E) for de-novo adjudication and directed the assessee to submit all relevant documents and evidence in the interest of justice. The tribunal directed the CIT(E) to provide a reasonable opportunity for the assessee to present their case.

The appeals of the assessee were allowed for statistical purposes.

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