2014 (9) TMI 1235 - AT - Income Tax

ITAT emphasizes procedural fairness in tax exemption appeal, directs reconsideration of 80G registration.

The ITAT allowed the appeal, setting aside the rejection of the application for 80G exemption under the I.T. Act, 1961. The decision highlighted the ... Grant of registration u/s 80G denied - 12A certificate not submitted alongwith the application - assessee's application was defective and hence rejected for want of statutory compliance - HELD THAT:- CIT in last para itself has mentioned that assessee's 80G certificate was renewed upto 31-03-2003. This could not have been granted upto 31-03-2003 without a valid 12A certificate. We find merit in the arguments of the ld. Counsel for the assessee that if assessee 12A certificate is misplaced then in that case the certified copy is provided to the assessee on payment of requisite fee. Besides when the record of 80G registration is available with the Department upto 31-03-2003 then it will have the copy of 12A Certificate also. Assessee contends that 12A certificate is granted without date of expiry. In this eventuality, the department has to verify its records and make the certified copy available to the assessee. The copy may be lying with earlier 80G registration. It is a trite law that if any application is found defective then the assessee should be given adequate opportunity to rectify the procedural defect. In consideration of the above, we are inclined to set aside the matter back to the ld. CIT to reconsider the same, trace 12A certificate granted to the assessee, provide a copy thereof in accordance with law and then decide the issue relating to 80G registration. Appeal of the assessee is allowed for statistical purposes . Issues:Appeal against rejection of application u/s 80G(5)(vi) of the I.T. Act, 1961 due to missing 12A(a) certificate.Detailed Analysis:Issue 1: Rejection of 80G ExemptionThe appellant, a charitable society, appealed against the rejection of its application u/s 80G(5)(vi) of the I.T. Act, 1961 by the ld. CIT, Kota. The rejection was based on the non-availability of the 12A(a) certificate. The appellant argued that despite being registered u/s 12A, the exemption u/s 80G was denied. The ld. CIT observed that the society had been granted registration u/s 12A(a) but the certificate was missing. The appellant contended that they had a statutory right to obtain a certified copy of the certificate from the department. The ld. DR argued that the application was defective as the 12A certificate was not submitted. The ITAT found merit in the appellant's argument, stating that the 80G certificate could not have been renewed without a valid 12A certificate. They directed the ld. CIT to reconsider the matter, trace the 12A certificate, provide a copy, and then decide on the 80G registration issue.Issue 2: Statutory ComplianceThe ld. CIT rejected the appellant's application citing non-compliance with Rule 11AA(2)(i) of the I.T. Rules 1962, which required enclosing a copy of the 12A registration with the application. The appellant argued that if the 12A certificate was lost, they had the right to obtain a certified copy. The ITAT agreed, emphasizing that the appellant should have been given an opportunity to rectify the procedural defect. They highlighted that the 12A certificate's absence did not justify the outright rejection of the application. The ITAT directed the ld. CIT to reconsider the matter, stressing the importance of providing a fair chance to rectify any deficiencies.Conclusion:The ITAT allowed the appeal for statistical purposes, setting aside the rejection of the application u/s 80G(5)(vi) of the I.T. Act, 1961. The judgment emphasized the need for procedural fairness, including providing opportunities to rectify defects and ensuring proper documentation before making decisions regarding tax exemptions.