The Ahmedabad ITAT has held that failure of CIT(E) to consider an affidavit filed by the trust explaining the mistake in Form 10AD violation of principles of natural justice.
The assessee is a Trust having registration u/s. 12A of the Income Tax Act vide order dated 21-03- 2023. The Assessee also made an application for registration u/s. 80G(5) of the Act by filing Form 10AD on 26-09-2022.
CIT(E) issued a notice on 12-12-2022 sent through ITBA on the e-mail address given by the assessee to furnish detailed note on the activities actually carried out by the Trust as well as certain details and documents mentioned therein. In response thereto, the assessee furnished its reply.
The CIT(E) issued one more notice on 12-01-2023 requiring certain details. In response thereto, the assessee filed Affidavit wherein it is declared that the Trust has not incurred religious expenses, but due to mistake, incorrect details were filed in Form 10AB and therefore requested to consider that Affidavit filed by the Trustee and grant exemption u/s. 80G.
Thus, CIT(E) relied upon various case laws and rejected the application filed in Form 10AD for approval u/s. 80G(5).
The assessee contended a Paper Book which carries various details and the notices issued by CIT(E), reply filed by the assessee and also registration granted u/s. 12A of the Act and Affidavit explaining the mistakes in Form 10AB. CIT(E) without considering the above Affidavit rejected the application u/s. 80G but whereas granted registration u/s. 12A of the Act. Thus assessee pleaded one more opportunity be given to the assessee to explain its case and that the assessee Trust has not expanded for any religious activities.
The department contended that the assessee ought to have filed the details required u/s. 80G in Form 10AD as per Rule 11AA(1) of the Income Tax Rules. The CIT(E) after perusing the Audit Reports for various financial years denied the registration u/s. 80G which does not require any interference and assessee appeal is liable to be dismissed.
The tribunal noted that it is seen from the order CIT(E) passed that two opportunities of hearing were given to the assessee. Though the assessee filed reply to the notices issued alongwith Affidavit of the Trustee explaining mistakes in Form 10AB. However, without verifying the same, rejected the application filed u/s. 10AB and u/s. 80G(5) of the Act.
Tapovan Youth Alumni Group Trust V/s The Commissioner of Income Tax (Exemption)