9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2025 (5) TMI 522 - AT - Income TaxRejection of registration u/sec.80G - assessee trust has failed to prove it s onus of charitable activities carried-out - HELD THAT - CIT(A) dismissed the application filed by the assessee in a casual manner by repeating or copying the contents from some other order which is evident from the findings in CIT(E) s order where the CIT(E) observed that the application in Form-10AB is to be decided in time bound manner and non-submission of mandatory information the present application in Form-10AB for registration u/sec.80G is infructuous and herewith rejected as non-maintainable. CIT(E) never discussed the objects of the appellant trust and activities carried-out by the assessee trust during the relevant assessment year. CIT(E) dismissed the application filed by the assessee without even considering the relevant application filed in Form-10AB and other evidences filed in support of the application. Therefore we set aside the order of the CIT(E) and restore this issue back to the file of CIT(E) with a direction to redecide the issue afresh after providing an adequate opportunity of being heard to the assessee. Accordingly the grounds of appeal of the assessee are allowed for statistical purposes.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this appeal are:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Justification for rejection of Form-10AB application under section 80G Relevant legal framework and precedents: Section 80G of the Income Tax Act, 1961 provides for deduction to donors for contributions made to certain funds or charitable institutions registered under this section. Registration under section 80G is granted upon application in Form-10AB, subject to verification of the charitable nature of the institution and compliance with prescribed conditions. The authorities are mandated to decide such applications within a stipulated time frame, but the decision must be based on proper scrutiny of the facts and evidence submitted. Court's interpretation and reasoning: The Tribunal noted that the learned CIT(E) rejected the application on the ground of non-submission of mandatory information and treated the application as non-maintainable without discussing or considering the documentary evidence and submissions made by the assessee trust. The order of the learned CIT(E) lacked any detailed reasoning or evaluation of the facts presented by the assessee. Key evidence and findings: The assessee trust had filed the application in Form-10AB along with relevant documents evidencing its charitable activities. However, the learned CIT(E) did not engage with these submissions, as evident from the absence of any discussion on the objects or activities of the trust in his order. Application of law to facts: The rejection of the application solely on procedural grounds without examining the substantive merits or documentary evidence is contrary to the principles governing registration under section 80G. The Tribunal emphasized that the learned CIT(E) was required to consider the evidence and provide reasons for rejection, which was not done. Treatment of competing arguments: The Revenue contended that the assessee failed to discharge its onus of proving charitable activities to the satisfaction of the learned CIT(E), justifying the rejection. The Tribunal, however, found that since the learned CIT(E) did not consider the evidence at all, the contention was not sustainable. Conclusions: The rejection of the application by the learned CIT(E) was not justified as it was done without proper consideration of the evidence and without recording reasons, rendering the order unsustainable. Issue 2: Adequacy of opportunity of hearing provided to the assessee trust Relevant legal framework and precedents: Principles of natural justice require that before any adverse order is passed, the affected party must be given adequate opportunity to present its case and respond to objections. This is particularly important in cases involving registration under section 80G, where the assessee's eligibility depends on factual verification. Court's interpretation and reasoning: The Tribunal observed that the learned CIT(E) did not provide adequate opportunity of hearing to the assessee trust. The order indicated a summary rejection without engaging with the submissions or allowing the trust to clarify or supplement its application. Key evidence and findings: The assessee's counsel submitted that no meaningful hearing was conducted, and the rejection was abrupt. The Tribunal found no evidence in the record to suggest that the assessee was heard in detail or given a chance to remedy any deficiencies. Application of law to facts: Given the lack of adequate hearing, the procedural fairness required under the Act and judicial precedents was not complied with, vitiating the order. Treatment of competing arguments: The Revenue did not specifically dispute the lack of adequate hearing but relied on substantive non-compliance. The Tribunal held that without hearing, substantive evaluation itself could not be valid. Conclusions: The learned CIT(E) failed to provide the assessee trust with adequate opportunity of hearing, which is a fundamental procedural requirement, thereby invalidating the rejection order. Issue 3: Validity of appellate authority's (CIT(A)) order upholding the rejection Relevant legal framework and precedents: The appellate authority is expected to conduct an independent and reasoned review of the lower authority's order, ensuring compliance with legal standards and procedural fairness. Court's interpretation and reasoning: The Tribunal found that the appellate authority dismissed the appeal in a casual manner by merely reiterating or copying the contents of the lower authority's order without independent analysis. The CIT(A) did not address the lack of consideration of evidence or the absence of adequate hearing. Key evidence and findings: The order of the CIT(A) contained no substantive discussion on the merits or procedural lapses, merely affirming the rejection on the same grounds as the CIT(E). Application of law to facts: Such mechanical confirmation of the lower order without independent scrutiny or addressing procedural defects is inconsistent with the appellate jurisdiction and principles of natural justice. Treatment of competing arguments: The Revenue relied on the correctness of the CIT(E) order, but the Tribunal emphasized the inadequacy of the appellate order in remedying the procedural infirmities. Conclusions: The appellate order was not sustainable as it failed to independently consider the issues or correct the procedural lapses in the order of the learned CIT(E). 3. SIGNIFICANT HOLDINGS The Tribunal held that:
Core principles established include the necessity for the assessing authority to:
Final determinations:
|
