SHARAN CHARITABLE TRUST,HYDERABAD vs. COMMISSIONER OF INCOME TAX,(EXEMPTIONS), HYDERABAD

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ITA 423/HYD/2021Status: DisposedITAT Hyderabad14 December 20214 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal and, considering the pandemic situation, decided to provide the assessee with one more opportunity to furnish the required details to the DCIT (Exemptions). The matter was remitted back to the DCIT for fresh adjudication.

What were the facts?

The assessee, Sharan Charitable Trust, applied for registration under Section 12AA of the Income Tax Act. The CIT (Exemptions) rejected the application due to the absence of documentary evidence to verify the genuineness of the trust's objects and activities. The assessee cited the COVID-19 pandemic as a reason for their inability to provide the necessary details.

What were the issues?

Whether the CIT (Exemptions) was justified in rejecting the registration application without providing a further opportunity, given the pandemic constraints. The primary issue is the assessee's ability to furnish evidence for its charitable activities.

Which sections of the Income-tax Act were involved?

Section 12AA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCH “A”, HYDERABAD

Before: SHRI A. MOHAN ALANKAMONY & SRI S.S. GODARA

Hearing: 07/12/2021Pronounced: 14/12/2021

This appeal is filed by the assessee against the order of the Ld. CIT(Exemptions), Hyderabad in DIN No. ITBA/EXM/S/EXM1/2020- 21/1031896344(1), dated 30/03/2021 passed U/s. 12AA(1)(b)(ii) of the Income Tax Act, 1961.

2.

The assessee has raised five grounds in its appeal and they are extracted herein below for reference:

“1. The order of the Ld. CIT(Exemptions), Hyderabad in rejecting the application of the appellant for grant of registration U/s. 12AA of the Act is wholly unsustainable.

2. The Ld. CIT(E) failed to note that the assessee’s activities were of charitable in nature and therefore erred in not granting registration U/s. 12AA of the Act.

3. The Ld. CIT(E) failed to note that the charitable trust was formed only in March, 2020 which was the Pandemic period and there was a complete lockdown in the country on and off during the regular intervals therefore the trust could not carry on any charitable activities for verification as called for by the CIT (E). 4. The Ld. CIT(E) failed to note that the necessary explanation could not be filed on account of the Pandemic period and therefore the assessee was prevented by reasonable and sufficient cause in not filing the necessary evidence before the Ld. CIT(E). 5. The Ld. CIT(E) may be directed to give an opportunity so that the appellant trust could file all the necessary evidence to the satisfaction of the CIT(E) to accord recognition U/s. 12AA of the Act. 6. Any other ground or grounds that may be urged at the time of hearing of the appeal.”

3.

None appeared before us to represent the assessee’s appeal. From the record, it is apparent that there is a delay of 138 days in filing the appeal before the Tribunal. In this regard, the assessee had filed a condonation petition wherein it was stated that due to Pandemic situation prevailed during the relevant period the Trustees of the assessee could not meet and file the appeal papers before Tribunal within the prescribed time limit. On perusing the reasons stated by the assessee for filing the appeal beyond the prescribed time limit with a delay of 138 days due to the Pandemic situation prevailed during the relevant period, we hereby conde the delay of 138 days in filing the appeal before the Tribunal and proceed to adjudicate the case on merits.

4.

On examining the order of the Ld. CIT(Exemptions), Hyderabad, it is apparent that the assessee had filed e-application seeking registration U/s. 12A of the Act on 04/08/2020. Thereafter, the assessee was asked to produce certain documents in support of its claim of registration U/s. 12A of the Act. In the absence of any documentary evidence in the support of the assessee’s claim of registration, the Ld. CIT(E) could not verify the genuineness of the assessee’s objects / charitable activities and therefore, the Ld. CIT(E) did not grant registration u/s. 12A of the Act. Aggrieved, assessee filed the present appeal before the Tribunal.

5.

On perusing the facts and circumstances of the case, we are of the view that because of the Pandemic situation the assessee could not cooperate before the Learned CIT (Exemptions) by furnishing the requisite details. Therefore, in our view the assessee should be provided with one more opportunity to furnish the details in support of its claim for registration u/s. 12A of the Act. Accordingly, we hereby remit the matter back to the file of the concerned DCIT (Exemptions) in order to provide one more opportunity to the assessee to furnish the details as required by the Ld. Revenue Authorities. Assessee is also hereby directed to promptly cooperate before the Ld. CIT (E) failing which the Ld. CIT(E) is at liberty to pass appropriate order in accordance with law and merit. It is ordered accordingly.

6.

In the result, appeal of the assessee is allowed for statistical purposes.

Pronounced in the open Court on the 14th December, 2021.

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