2024 (2) TMI 885 - AT - Income Tax

Court Overturns Rejection Orders on Tax Exemption Applications; Case Remanded for New Review and Additional Evidence.

The court set aside the rejection orders issued by the CIT(Exemption), Delhi, regarding the assessee's applications for final registration under section ... Rejection of application filed in Form 10AB in regard to section 12A and exemption u/s 80G - Provisional registration u/s 12A(1)(ac)(vi) of the Act was granted to the assessee in Form 10AC - All the details called for by the ld CIT(E) in the questionnaire were duly replied by the assessee by furnishing voluminous documents HELD THAT:- In our considered opinion, these documents are not appreciated by the ld CIT(E) while denying the registration to the assessee. Hence, we deem it fit and appropriate to restore to file of the ld CIT(E) for de novo adjudication in accordance with law and in the light of various documentary evidences submitted by the assessee which are enclosed in the Paper Book filed before us. Further the assessee is given liberty to furnish fresh evidences, if any, in support of its contentions. Accordingly, the grounds raised by the assessee in both appeals are allowed for statistical purposes. Issues involved:The judgment involves the rejection of the application for final registration u/s 12A(1)(ac)(iii) and exemption u/s 80G(5) of the Income Tax Act, 1961 by the ld CIT(Exemption), Delhi, and the subsequent appeal by the assessee challenging the rejection order.Issue 1 - Appeal u/s 12AB(1)(b)(ii):The assessee appealed against the rejection of the application for final registration u/s 12A, citing that the ld CIT(Exemption) failed to appreciate the facts of the case and did not provide an opportunity for the appellant before framing the orders. The rejection order was deemed to be full of contradictions, leading to the order being set aside. The appellant was granted leave to add, alter, amend, or forego any grounds of appeal before or at the time of the hearing.Issue 2 - Appeal u/s 80G:Similarly, the assessee appealed against the rejection of the application for exemption u/s 80G, highlighting similar grounds as in the appeal u/s 12AB(1)(b)(ii). The rejection order was found to be contradictory and lacking proper consideration of the documents submitted by the assessee. The judgment allowed the assessee to furnish fresh evidence in support of its contentions.Detailed Judgment:The assessee, a registered public charitable trust focusing on conversations around eating disorders in India, sought final registration u/s 12A(1)(ac)(iii) and exemption u/s 80G(5) of the Act. The ld CIT(E) granted provisional registrations for specific periods but subsequently issued a rejection order on 28.03.2023. The rejection was based on a questionnaire responded to by the assessee with voluminous documents. However, the documents submitted were not adequately considered by the ld CIT(E), leading to the judgment to restore the file for de novo adjudication. The assessee was given the liberty to provide additional evidence to support its case. Consequently, the grounds raised by the assessee in both appeals were allowed for statistical purposes, resulting in the allowance of both appeals. The order was pronounced in open court on 16/02/2024.