ITAT Pune Orders Re-Examination: Section 12AB Registration Under the Scanner

Mahesh Shikshan Sanstha Vs CIT (ITAT Pune)

1. Background:
   • Assessee appealed against rejection order by CIT(E) under Section 12A(1)(ac)(vi) of the Income-tax Act, 1961.
   • Appeal based on order No. ITBA/EXM/F/EXM45/2023-24/1 055450380(1) dated 26/08/2023.
2. Application for Registration:
   • Assessee submitted Form No.10AB on 31/03/2023 for regular/final registration under Section 12AB.
   • Deficiencies noted by CIT(E) under Rule 17A(2) of IT Rules.
3. Notices and Opportunities:
   • CIT(E) issued notices on 15/06/2023 and 24/07/2023, allowing opportunities to rectify deficiencies.
   • Assessee failed to address the shortcomings despite multiple chances.
4. Rejection Basis:
   • CIT(E) rejected the application due to the assessee’s failure to provide satisfactory information about the genuineness of their activities.
   • Decision was considered procedurally flawless.

1. Assessee’s Response:
   • Assessee’s representative, the Ld. AR, acknowledged the non-compliance and requested one more effective opportunity to rectify the issues.
2. Purpose of Registration:
   • Emphasized that the provisions for registration of trusts (Section 12A/12AB) and recognition (Section 80G) aim to fulfill Directive Principles of State Policy for societal welfare.
   • Highlighted that Income Tax laws are welfare legislations, not punitive, and should serve the larger interest of justice.
3. ITAT Decision:
   • Without commenting on the case’s merits, ITAT Pune allowed the appeal for statistical purposes.
   • Ordered a de-nova consideration by CIT(E), preferably in three effective hearings.
   • Stressed the importance of the assessee ensuring timely compliance with the law.
4. Conclusion:
   • The appeal was allowed by ITAT Pune, directing a fresh review of the registration application by the CIT(E) with the opportunity for the assessee to rectify the noted deficiencies.

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