Educational Trust's Tax Exemption Denial Challenged; ITAT Orders Re-evaluation Citing Unfair Process by CIT.

The appellant, a trust operating educational institutions, faced denial of registration under Sec. 12AB(1)(ac)(vi) and approval under Sec. 80G(5)(iv) of the Income Tax Act, 1961. The CIT, Exemption's denial was challenged due to insufficient response time, breaching natural justice principles. The ITAT Pune found the CIT's actions unreasonable, remanding both issues back for de novo consideration. Consequently, both appeals were partly allowed, and the orders were issued on January 30, 2024.

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Issues involved: Denial of registration u/s. 12AB(1)(ac)(vi) and approval u/s.80G(5)(iv) of the Income Tax Act, 1961.

Summary:

Issue 1: Denial of registration u/s. 12AB(1)(ac)(vi)
The appellant, a trust running educational institutions, applied for registration u/s 12AB of the Act. The CIT, Exemption denied the registration without disposing of the adjournment petition, leading to the cancellation of provisional registration. The appellant challenged this denial, citing insufficient time given to respond to the notice, which violated principles of natural justice. The ITAT Pune found the approach adopted by the CIT, Exemption to be unreasonable and in violation of natural justice principles. Considering this, the matter was remanded back to the CIT, Exemption for de novo consideration in accordance with the law. The appeal against the denial of approval u/s. 80G was also remitted back due to the circumstances. Both appeals of the assessee were partly allowed.

Issue 2: Denial of approval u/s. 80G(5)(iv)
The denial of approval u/s. 80G was challenged by the appellant along with the denial of registration u/s. 12AB. The ITAT Pune, after finding the denial of registration to be unreasonable and against natural justice principles, remanded both matters back to the CIT, Exemption for fresh consideration. The appeals of the assessee were partly allowed, and the orders were pronounced on January 30th, 2024.

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