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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI INTURI RAMA RAO & SHRI PARTHA SARATHI CHAUDHURY
आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM:
This appeal preferred by the assessee emanates from the order of the Ld. CIT (Exemption) Pune dated 22.09.2020 passed u/s.12AA(1)(b)(ii) of the Income Tax Act, 1961 (hereinafter referred to as „the Act‟) as per the following grounds of appeal on record:
“1. The Ld. CIT EXEMPTION, Pune, erred in finalizing the order under section 12AA(1)(b)(ii) of the Income Tax Act, 1961, ex parte denying the appellant an opportunity of being heard thus, violating the principle of natural justice.
2. The Ld. CIT EXEMPTION, Pune, erred in finalizing the order under section 12AA(1)(b)(ii) of the Income Tax Act, 1961, ex parte without appreciating the factual aspect of service of the notice when the entire country was under lockdown during the pandemic situation.
3. The Ld. CIT EXEMPTION, Pune, erred in finalizing the order under section 12AA(1)(b)(ii) of the Income Tax Act, 1961, ex parte without appreciating the technical and factual aspects relating to the service of notice.
4. The appellant craves leave to amend or alter any of the above Grounds of appeal or to add new grounds of appeal during the course of appeal proceedings.”
The brief facts in this case are that the assessee/applicant has made an online application in Form 10A for approval of the Trust/Institution u/s.12AA of the Act on 07.01.2020 under the category of Charitable Trust/Institution as per CBDT Notification No.S.O.2033 (E) dated 24.06.2020 read with provisions of The Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance 2020, No.2 of 2020 dated 31.03.2020. The assessee/applicant is registered under Companies Act, 2013 with registration number: U85320PN2018NPL175275 dated 10.03.2018. The application was carefully perused and considered along with its annexures. Thereafter, a letter was issued through ITBA portal to the assessee/applicant on 10.02.2020 requesting to upload certain other information/clarification by 27.02.2020 in order to process the application. However, the assessee/applicant has not responded to the said notice.
In this case, the grievance of the assessee is denial of registration u/s.12AA of the Act by the Ld. CIT(Exemption) vide order dated 22.09.2020. It is further the case of the assessee that an application for registration u/s.12AA of the Act was rejected by the Ld. Ld. CIT(Exemption) since requisite details/evidences as sought for, were not submitted by the assessee. However, this was for the reason beyond the control of the assessee. Non compliance as recorded in the order of the Ld. CIT(Exemption) cannot be attributed to deliberate or willful default of the assessee and it was due to compelling circumstances which were beyond the reasonable control of the assessee. That as found in the record, the assessee has stated as follows:
“1. The appellant company is registered under section 8 of the Companies Act and as such is engaged in non profit activities.
2. It is the Pune Chapter of an International Organization called "International Coach Federation" which is involved in the overall development, training of sports coaches. The activities aim in developing professional standards for coaching and to promote professional coaching and training.
3. As such, application u/s.12AA of the IT Act was filed for grant of exemption benefits to the non-profit company. But the order u/s. 12AA(1)(b)(ii) of the IT Act was finalized ex parte.
Total three notices were issued by the Department. The first notice issued on 27.02.2020 through ITBA system to call for the details. But this letter was never received by the appellant on email or through SMS i.e. it was just uploaded on the portal. It was then realized i.e. after the service of second notice that the earlier notice was corrupted and couldn't open.
The second notice was issued on 15.06.2020 and was communicated through SMS. This notice did not contain the details to be uploaded. But since Pune was again under complete lockdown due to pandemic, the office of the appellant company was closed. As such there were no office bearers to gather and submit the documents. An email was sent to CIT Exemption on 03.08.2020 in this regard. The email also stated that the earlier notice was corrupted and couldn't open and therefore a detailed list of documents to be uploaded was required. But there was no response to this e mail.
6. The third notice was issued on 10.09.2020 and was communicated through SMS to file the response before 17.09.2020. In spite of the pandemic situation and the cases on rise, the office bearers tried their best to gather the information. On 17.09.2020 when the appellant tried to login and upload the requisite documents, the submission tab was deactived and the documents could not be uploaded. Again a mail was sent to CIT Exemption on 17.09.2020 regarding the technical issue faced but there was no response.
7. In the mean time, even the grievances were filed but before the resolution of grievances, the order was finalized on 22.09.2020.
As such this order was finalized ex parte without even taking into account the pandemic situation in India especially in Pune in not allowing proper opportunity of being heard.”
4. The Ld. Counsel for the assessee submitted that one final opportunity may be granted to the assessee in the interest of natural justice so that the assessee may be able to furnish requisite details/evidences before the Ld. CIT(Exemption) to represent the case on merits.
5. The Ld. DR did not raise any objection on this submissions put forth by the Ld. Counsel for the assessee.
It is observed from record that one letter was issued on 15.06.2020 and another letter was issued on 10.09.2020 asking the assessee to upload documents and credible evidences of activities carried out by them. It is also observed that this was the period of pandemic being effective specially in Maharashtra, particularly in the city of Pune wherein most of the offices remain closed and were not functioning. In such scenario, non compliance by the assessee is definitely not a deliberate act. The assessee has acted bona- fide explaining reasons, more particularly that their office was closed and therefore, they were not able to upload the requisite details/evidences in the department‟s portal.
Therefore, we are of the considered view in the interest of justice, one final opportunity should be given to the assessee and in view thereof, we set aside the order of the Ld. CIT(Exemption) and restore the matter back to his file for adjudicating the matter while complying with the principles of natural justice. At the same time, we direct the assessee to furnish relevant details/evidences as called for by the Ld. CIT(Exemption) to represent the case on merits.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced on 07th day of January, 2021.
Sd/- Sd/- INTURI RAMA RAO PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER ऩुणे / Pune; ददनाांक / Dated : 07th January, 2021 SB आदेश की प्रतिलऱपप अग्रेपिि / Copy of the Order forwarded to : अऩीऱाथी / The Appellant. 1. प्रत्यथी / The Respondent. 2.