The Jaipur Bench of the Income Tax Appellate Tribunal ( ITAT ) recently set aside the rejection order of the Commissioner of Income Tax (Exemption) and remanded the matter for fresh consideration of the applicant trust’s registration .Along with a cost of Rs. 4,000 imposed on the trust.
The Appellant-Trust, Amritam Prasadam Foundation filed an Income Tax Appeal before the ITAT, contesting the rejection of its application for registration under section 12 AB of the Income Tax Act, 1961, by the Commissioner of Income-tax (Exemptions), Jaipur, for the financial year relevant to the Assessment Year 2023-24.
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The events unfolded with the Appellant-Trust’s filing of an application for registration on 22.9.2023, which was subsequently rejected by the Commissioner of Income Tax (Exemption), Jaipur, leading to the present appeal.
The CIT(E) rejected the Trust’s application for registration, citing non-genuineness of it’s activities and non compliance with the trust’s objectives.
The CIT(E) had conducted an examination of the applicant trust’s application for registration and disallowed its claim due to non-compliance with the requirements under section 12 AB of the Income Tax Act, 1961, and the Rajasthan Public Trust Act, 1959.
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The appellant trust represented by their Counsel Mukesh Kandelwal averred that the applicant trust had been registered under the Rajasthan Public Trust Act, 1959, but failed to submit the registration certificate before the CIT(E). The trust also claimed that its activities were genuine and in accordance with its objects.And contended that the Trust requests for one more opportunity to comply with the directions issued by CIT(E).
The applicant trust’s arguments were countered by Revenue Counsel,Arvind Kumar who argued that the trust had failed to furnish any reply to the show cause notice dated 5.12.2023, and that its activities were found to be non-genuine.
The two-member Bench comprising Rathod Kamlesh Jayest Bhai,Accountant Member along with Narinder Kumar ,Judicial Member of the Income Tax Appellate Tribunal, Jaipur observed that the applicant trust’s failure to register under the Rajasthan Public Trust Act, 1959, and its non-genuine activities are not sufficient grounds to reject its application for registration under section 12 AB of the Income Tax Act, 1961, without providing a reasonable opportunity to comply with the directions.
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The Bench imposed Rs.4000 as fine on the Trust for its casual approach in pursuing application for registration.
The appeal was disposed of for statistical purposes, and the matter was remitted to the CIT(E) for decision afresh after providing a reasonable opportunity to the applicant-appellant to comply with the directions. Additionally, the applicant-appellant trust was burdened with costs of Rs.4,000/- to be deposited in Prime Minister’s National Relief Fund.
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