Opportunity to be Granted to Provide Documents for Trust Registration and 80G Approval

By | January 23, 2025
(Last Updated On: January 23, 2025)

Opportunity to be Granted to Provide Documents for Trust Registration and 80G Approval

Summary in Key Points:

  • Issue: Whether the Commissioner (Exemption) should provide the assessee with an opportunity to submit supporting documents for registration under Section 12AB and approval under Section 80G of the Income-tax Act, 1961, even though the applications were initially rejected for lack of documents.
  • Facts: The assessee’s applications for trust registration and 80G approval were rejected due to non-submission of supporting documents. The assessee claimed that there was no specific request for these documents.
  • Decision: The ITAT remanded the matter back to the Commissioner (Exemption) to allow the assessee to submit the necessary documents and make further submissions.

Analysis:

The ITAT ruled in favor of the assessee, emphasizing the following:

  • Opportunity to be Heard: In the interest of justice, the assessee should be given a fair opportunity to present their case and submit the required documents.
  • No Specific Requisition: Since there was no specific requisition for documents, the assessee may not have been aware of the need to submit them.
  • Remand to Commissioner (Exemption): The ITAT remanded the matter back to the Commissioner (Exemption) to reconsider the applications after providing the assessee with an opportunity to submit the necessary documents and make further submissions.

Important Note: This case highlights the importance of procedural fairness in granting registrations and approvals to charitable trusts. The ITAT’s decision ensures that the assessee is not denied registration or approval merely due to a lack of awareness about the documentary requirements. This approach promotes transparency and allows the Commissioner (Exemption) to make a well-informed decision after considering all relevant information and documents.

IN THE ITAT DELHI BENCH ‘B’
Dhananjay Sanjogta Foundation
v.
CIT Exemption
Shamim Yahya, Accountant member
and ANUBHAV SHARMA, Judicial member
IT A NOS. 2464 & 2465 (DEL) of 2024
[Assessment Year 2024-25]
JANUARY  2, 2025
Alakto Majumder, CA and Ankit Majumder, Adv. for the Appellant. Rajesh Kumar Dhanesta, Sr. DR for the Respondent.
ORDER
Shamim Yahya, Accountant Member. – These appeals by the assessee are against the respective orders of the Ld. CIT Exemption, Lucknow both dated 19.3.2024 pertaining to assessment year 2024-25.
2. The grounds raised in ITA No. 2464/Del/2024 read as under:-
1.On the facts and circumstances of the case and the law, the impugned order issued u/s. 12AB(1)(b)(ii)(B) of the Act is arbitrary and bad in law and deserves to be set aside.
2.On the facts and circumstances of the case and the law, the Ld. CIT(E) has erred in not appreciating the facts available on record while deciding genuineness of the activity.
3.On the facts and circumstances of the case and the law, the Ld. CIT(E) has erred in not appreciating that the very purpose of incurring employee related expenditure was to aid and further pursue the charitable objects for which the appellant assessee was set up. The Ld. CIT(E) failed to appreciate that the employees were not the ultimate beneficiaries and only assisted to attain the charitable objects as specified repeatedly in the form of response to the notice and the detailed submissions made.
4.On the facts and circumstances of the case and the law, the Ld. CIT(E) has violated the principles of natural justice by not providing adequate opportunity of being heard and passing a non-speaking order in violation of judicial precedents.
5.The assessee humbly craves leave to add, alter, or delete all or any of the grounds of appeal.
3. The grounds raised in ITA No. 2465/Del/2024 read as under:-
1.On the facts and circumstances of the case and the law, the impugned order issued under second proviso to clause (ii)(b)(B) of section 80G(5) of the Act is arbitrary and bad in law and deserves to be set aside.
2.On the facts and circumstances of the case and the law, the Ld. CIT(E) has erred in not appreciating the facts available on record while deciding genuineness of the activity.
3.On the facts and circumstances of the case and the law, the Ld. CIT(E) has erred in not appreciating that the very purpose of incurring employee related expenditure was to aid and further pursue the charitable objects for which the appellant assessee was set up. The Ld. CIT(E) failed to appreciate that the employees were not the ultimate beneficiaries and only assisted to attain the charitable objects as specified repeatedly in the form of response to the notice and the detailed submissions made.
4.On the facts and circumstances of the case and the law, the Ld. CIT(E) has violated the principles of natural justice by not providing adequate opportunity of being heard and passing a non-speaking order in violation of judicial precedents.
5.The assessee humbly craves leave to add, alter, or delete all or any of the grounds of appeal.
4. The brief facts of the case are that assessee has filed an application for registration of trust under section 12AB of the Act on 27.9.2023 in Form No. 10AB under Rule 17A of the I.T. Rules, 1962. Similarly, assessee has also filed an application for grant of approval u/s. 80G of the Act on 27.9.2023 in Form No. 10AB under Rule 11AA of the I.T. Rules, 1962. Both the applications were rejected by the CIT (Exemption), Lucknow. Against the aforesaid action of the Ld. CIT(Exemptions), Lucknow, assessee has appealed before us.
5. We have heard both the parties and perused the records. Ld. Counsel for the assessee submitted that in both the cases, in para 4 of the Ld. CIT(E)’s order there was a requisition note on the activities of the assessee. He further submitted that assessee duly complied with the same. However, Ld. CIT(E) dismissed the assessee’s applications on the ground that supporting documents were not provided. Ld. Counsel for the assessee further submitted that there was no requisition of supporting documents, hence, asseessee could not provide the same. Therefore, he prayed an opportunity may be granted to the assessee to provide the necessary documents and submissions before the Ld. CIT (E) in the interest of justice. Ld. DR did not have any serious objection to the proposition made by the Ld. AR for the assessee.
6. In view of the aforesaid facts and circumstances of the case and in the interest of justice, we deem it fit and proper to remit back the issues in both the appeals to the file of the Ld. CIT (Exemption), Lucknow with the directions to decide the same, afresh, after giving adequate opportunity of being heard to the assessee, by passing a speaking orders. We hold and direct accordingly.
7. In the result, both the Assessee’s appeals are allowed for statistical purposes.