Tribunal grants opportunity to provide missing details for tax registration

The Tribunal set aside the order rejecting the application for registration under section 12AA of the Income Tax Act due to non-submission of necessary details. The assessee, engaged in educational and medical relief activities, was granted another opportunity to provide the required information. The Tribunal emphasized leniency and directed the CIT(Exemptions) to reconsider the application, stressing the importance of justice for a trust benefitting society. The appeal was allowed for statistical purposes, with instructions for timely compliance, and the decision was rendered in Ahmedabad on 25th March 2021.

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Issues:
- Rejection of application for registration under section 12AA due to non-submission of requisite details.

Analysis:
The judgment pertains to an appeal against the order of the ld. CIT(Exemptions) rejecting the application for registration under section 12AA of the Income Tax Act, 1961. The sole issue raised was the rejection of the application due to the absence of necessary details during the proceedings.

The assessee, a trust engaged in educational and medical relief activities, had initially filed the registration application along with the required documents. However, upon receiving a letter from the Department requesting additional details, the assessee failed to comply, leading to the rejection of the application by the ld. CIT(E).

During the appeal, the assessee presented a paper book with relevant documents, attributing the non-submission of details to the negligent behavior of the accountant responsible for handling the matter. The trustee of the trust explained the situation in an affidavit, highlighting the accountant's failure to provide the necessary information to the consultant chartered accountant for submission to the ld. CIT(Exemption).

After considering the submissions, the Tribunal acknowledged the reasons provided by the trustee for the non-compliance and decided to grant the assessee another opportunity to furnish the required details. Despite justifying the ld. CIT's initial decision to some extent, the Tribunal emphasized the importance of leniency in the interest of justice, especially for a trust engaged in beneficial activities for society.

Therefore, the Tribunal set aside the earlier order, directing the ld. CIT(E) to reconsider the application for registration after affording the assessee a reasonable opportunity. The assessee was instructed to ensure timely submission of details as requested by the CIT (Exemptions). The appeal was allowed for statistical purposes, and the decision was pronounced in court on 25th March 2021 in Ahmedabad.

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