By TIOL News Service

CHANDIGARH, JULY 09, 2018: THE ISSUE AT HAND BEFORE THE TRIBUNAL IS - Whether an applicant can be debarred from seeking registration of a trust where similar application filed for earlier AYs had been dismissed. NO IS THE ANSWER.

Facts of the case

The assessee had filed an application in Form No-10A seeking registration u/s 12A. During the proceeding, the CIT (E) observed that the assessee was a society having ongoing entity and its aim and objects were to provide Lordship at Bhakta Bhandav Society with a regular source of fund for due performance of daily sewa puja and other acts of devotions; to provide for renovation, maintenance and keeping in good repairs the said Society; to uplift human society of Krishna Consciousness as revaluated in the teaching of Bhagvad Gita; to provide relief for poor, and distribution of food to general public especially to poor and needy people.

Further, the assessee was asked to file certain documents/clarification so as to enable the CIT (E) to examine whether the assessee fulfilled the two basic conditions for grant of registration u/s 12A. On perusal of the reply, the CIT (E) found that grant of registration u/s 12A, was rejected on the ground that it had provided unaudited balance sheet and same revealed that it was engaged solely in religious activities of private nature, which did not benefit the general public. On appeal, CIT (E) held that, since on earlier two occasions the assessees application was rejected, the natural course to follow was for the assessee society to file an appeal before ITAT rather than filing fresh application before it again and again. Further no provision under the act to file a fresh application where the case was rejected and that the same only tantamounted to subverting due process of law, which was not tenable.

On hearing the matter, the Tribunal held that,

++ the CIT(E) did not afford proper opportunity of hearing to the assessee, merely calling for basic information for examining the activities being carried out by the assessee, and thereafter, without giving any further opportunity, rejecting the application filed for the reason that same had been rejected on earlier two occasions also. Hence, we are unable to concur with this reasoning of the CIT(E). Merely because application had been rejected earlier also, does not debar the appellant from filing fresh application seeking registration. No such provision of law has been brought to our notice. In fact, the CIT(E) should have pointed out the observations made in earlier orders, while rejecting the application, and should have given an opportunity to the assessee society to rebut the same;

++ the CIT(E) to reconsider the application of the assessee society after giving due opportunity of hearing. The assessee society is directed to appear before the CIT(E) and is also directed to file all evidences and pleadings before the CIT(E) it wishes to rely upon to rebut the adverse findings in the earlier orders passed rejecting the assessee's application, without waiting for the CIT(E) to ask for the same, so as to expedite the proceedings for grant of registration.

(See 2018-TIOL-1038-ITAT-CHD)