Tribunal Overturns Rejections; Orders Fresh Review of Tax Registration Applications u/ss 12A and 80G.

The Appellate Tribunal in Kolkata allowed the appellant's appeals concerning the rejection of applications for final registration under sections 12A(1)(ac)(iii) and 80G of the Income Tax Act. The Tribunal found that the appellant was not given a fair opportunity to present its case regarding section 12A and remanded the matter for a fresh decision. Similarly, for section 80G, the Tribunal determined there was no delay by the appellant in filing the application following provisional approval, and thus, remanded this matter as well for reconsideration. Both appeals were allowed for statistical purposes.

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Issues involved:
The rejection of application for final registration under sections 12A(1)(ac)(iii) and 80G of the Income Tax Act.

Issue 1: Rejection of application under section 12A(1)(ac)(iii):
The appellant filed appeals against the rejection of the application for final registration as a charitable institution under section 12A(1)(ac)(iii) of the Income Tax Act. The appellant argued that the order by the Commissioner of Income Tax (Exemption) was ex parte, as the appellant did not receive proper communication regarding the hearing. The appellant contended that only a single opportunity was given to present its case, and the time period for issuing notice and fixing the hearing was inadequate. The Appellate Tribunal found that the appellant was not granted a proper opportunity by the Commissioner, and thus, set aside the impugned order and remanded the matter for a fresh decision.

Issue 2: Rejection of application under section 80G:
The appellant also appealed against the rejection of the application for final registration under section 80G of the Income Tax Act. The Commissioner concluded that the application was time-barred based on the proviso to section 80G(5), stating that the appellant had already commenced activities in the financial year 2020-21. However, the Appellate Tribunal clarified that the appellant could not have directly applied for final registration without provisional approval under section 80G(5)(iv) of the Act. The Tribunal held that there was no delay on the appellant's part in filing the application for final registration under section 80G(5), as the appellant applied for final registration shortly after receiving provisional approval. The matter was remanded to the Commissioner for a fresh decision on the application for final registration under section 12A, and consequently, the application for registration under section 80G(5) was also restored.

In conclusion, both appeals of the appellant were treated as allowed for statistical purposes by the Appellate Tribunal in Kolkata on 13th September 2023.

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