2021 (10) TMI 270 - AT - Income Tax

ITAT Amritsar: Appeal No. 117/Amr/2020 allowed, No. 61/Amr/2020 dismissed; remand for fresh CIT (E) order.

Nand Singh Memorial Society Versus Commissioner of Income Tax (Exemptions), Chandigarh

The Appellate Tribunal ITAT Amritsar allowed appeal No. 117/Amr/2020 for statistical purposes and dismissed appeal No. 61/Amr/2020 as infructuous. The ... Rejection of application u/s 12AA - Non filing of return - as argued none of the papers was considered by the CIT exemption while rejecting the application for the assessee for registration - Denial of natural justice - HELD THAT:- As perusal of the order passed by the CIT exemption, clearly shows that the order was passed by the lower authorities without considering documents shown to us in the paper book filed by AR and further the CIT exemption has not considered the binding precedent of various HC available on record, wherein High Court had held that the filing of return of income is not necessary for considering the application was registration. it was held that only the account of the assessee are required to examine, and from the accounts it was to ascertain whether the activities of the assessee were genuine and charitable in nature or not since the Commissioner exemption has not done the needful. We set aside the order passed by the Commissioner and remand the matter to CIT (E). The CIT(E) is directed to pass fresh speaking order, in terms of direction given hereinabove, after following the principle of natural justice and affording the opportunity of hearing to the assessee. - Decided in favour of assessee for statistical purposes Issues:1. Appeal against rejection of registration under section 12AA of the income tax act.2. Consideration of documents and precedent by the CIT exemption.3. Requirement of filing return of income for registration.Issue 1: Appeal against rejection of registration under section 12AAThe appellant filed an appeal against the order passed by the CIT exemption rejecting the application for registration under section 12AA of the income tax act. The appellant was aggrieved by the decision, leading to the appeal before the Appellate Tribunal ITAT Amritsar. The Ld. AR requested the matter to be sent back to the CIT exemption for a fresh decision. The DR for the revenue did not object to remanding the matter but directed the appellant to comply with the directions issued by the CIT exemption. The Tribunal noted that a subsequent application for registration had been filed by the appellant, rendering the initial appeal infructuous and non-maintainable.Issue 2: Consideration of documents and precedent by the CIT exemptionThe appellant's representative argued that the CIT exemption did not consider various documents, including audited accounts, while rejecting the application for registration. The Ld. AR contended that the CIT exemption's findings were against the rules framed by the Board and cited a decision of the Allahabad High Court stating that non-filing of the return of income should not be a ground to deny registration. The Tribunal observed that the CIT exemption did not consider the documents provided by the appellant and failed to take into account binding precedents from various High Courts emphasizing the examination of the assessee's activities to determine their genuineness and charitable nature.Issue 3: Requirement of filing return of income for registrationThe AR for the appellant highlighted a condition in the CIT exemption's order stating that the application for registration cannot be considered unless legitimate taxes for certain financial years are paid. The Ld. AR argued that this condition contradicted the rules framed by the Board and referred to the Allahabad High Court decision supporting the appellant's position. The DR for the revenue supported the lower authority's order. The Tribunal emphasized that the filing of the return of income is not a prerequisite for considering the application for registration. It reiterated that only the accounts of the assessee need to be examined to ascertain the genuineness and charitable nature of their activities. Consequently, the Tribunal set aside the CIT exemption's order and remanded the matter for a fresh decision, emphasizing the principles of natural justice and the opportunity for the appellant to be heard.In conclusion, the Appellate Tribunal ITAT Amritsar allowed the appeal No. 117/Amr/2020 for statistical purposes and dismissed appeal No. 61/Amr/2020 as infructuous. The matter was remanded to the CIT (E) for a fresh speaking order, ensuring compliance with the principles of natural justice and the consideration of relevant documents and precedents.