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Facts
The assessee filed an application for approval under section 80G(5)(iii) of the Income Tax Act, 1961, which was rejected by the CIT(E) due to deficiencies in evidence and non-compliance. The assessee contended that the non-compliance was due to not receiving the notices from the CIT(E).
Held
The Tribunal condoned the delay in filing the appeal, finding that the assessee had sufficient cause and that the rejection was made without providing an opportunity of being heard, violating principles of natural justice. The Tribunal set aside the impugned order and remanded the matter back to the CIT(E).
Key Issues
Whether the delay in filing the appeal should be condoned, and whether the CIT(E)'s rejection of the 80G approval application without providing an adequate opportunity of being heard was justified.
Sections Cited
80G, 80G(5)(iii), 254
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Income Tax Appellate Tribunal, DELHI BENCH ‘A’: NEW DELHI
Before: SHRI MAHAVIR SINGH, HON’BLE & SHRI AVDHESH KUMAR MISHRA
Ten Smiles Foundation, Commissioner of Income H. No. 2E/189, Tax (Exemption), Near Lakhani Dharamshala, Vs. C. R. Building, NIT, Faridabad, Haryana Sector-17E, Chandigarh PAN: AAICT9021F (Appellant) (Respondent) Appellant by Sh. Jitender Wadhwa, CA Respondent by Shri Om Prakash, Sr. DR Date of Hearing 06/06/2025 Date of Pronouncement 11/06/2025 ORDER PER AVDHESH KUMAR MISHRA, AM
The appeal filed by the assessee is directed against the order dated 24.05.2023, passed under section 80G of the Income Tax Act, 1961 (Act), of the Commissioner of Income Tax (Exemption), Chandigarh [CIT(E)].
The relevant facts giving rise to this appeal are that the assessee filed an application for approval under section 80G(5)(iii) of the Income Tax Act, 1961 (Act) on 03.02.2023, which was rejected by the Ld. CIT(E) observing as under:
“5. In view of the above discussions, the present application of the assessee filed in Form 10AB under clause (iii) of first proviso to section 80G(5) of the Act is disposed of as being deficient in factual evidences in the absence of the requisite submissions and appearances of the assessee at the scheduled hearings. This is despite the granting of at least three opportunities as above. It is pertinent to mention here that it is mandated by the provisions of under clause (iii) of first proviso to section 80G(5) of the Act that where the trust or institution has been provisionally approval u/s 80G it has to make an application for approval u/s 80G within six months of commencement of activities. In the absence of any submission from the applicant it is not possible to ascertain the objects and activities carried out by the applicant. Accordingly, the application filed by the applicant for approval u/s 80G of the Act is hereby rejected, which rejection and consequent lack of registration will apply from this F.Y. 2022-23 onwards and also supersede any approval granted u/s 80G of the Act by any authority at any earlier time.” 2.1 The rejection of approval under section 80G(5)(iii) of the Act vide impugned order, prima-facie, is solely due to non-compliance of notices issued by the Ld. CIT(E). Aggrieved, the assessee filed this appeal.
At the outset, the Ld. AR prayed for condonation of the delay in filing this appeal. Vide his submission filed during the hearing before us, it was contended that initially the assessee was advised to file a fresh application under section 80G(5)(iii) of the Act, which was complied with. The new application under section 80G(5)(iii) of the Act was also rejected on 13.11.2024. Thereafter, the assessee was advised to file this appeal. The Ld. AR further contended that the assessee did not gain any thing by filing belated appeal. In fact, the assessee acted as advised from time to time and there was no malafide or deliberate delay in filing this appeal. Further, it was also submitted that the assessee was not having regular professional assistance to look after the filing of the appeal in the income tax matter.
3.1 Per contra, the Ld. Sr. DR submitted that the condonation application in filing this appeal did not reflect any reasonable cause on the part of the appellant assessee. He accordingly, opposed condonation of delay in filing this appeal.
The Ld. AR drawing our attention to the following copy of the letter issued by the Ld. CIT(E), submitted that the non-compliance on the part of the assessee was only due to the fact that it had not received any email/ notice on or before the date of compliance as the said notice issued by the Ld. CIT(E) did not contain the email/address of the recipient/addressee:
4.1 Further, it was specifically admitted at the bar that the assessee had never received any communication, through email/post from the Ld. CIT(E), for providing an opportunity of being heard. Hence, there was non- compliance and the Ld. CIT(E) decided the issue of granting approval under section 80G of the Act without hearing the assessee, which prima facie was against the principles of natural justice. Accordingly, he prayed for remanding this matter back to the file of the Ld. CIT(E) for deciding it afresh. To which, Ld. Sr. DR did not object to.
We have heard both parties and have perused the material available on record. We find merit in the arguments of the Ld. AR.
The condonation of delay in filing this appeal is on the record. There is no dispute that under section 254 of the Act, the Tribunal may pass such orders as it thinks fit. We are of the considered view that there is no malafide or deliberate delay in filing this appeal. In the interest of substantial justice, the delay in filing this appeal deserves condonation so that this appeal is decided on merit. We do not see any prejudice which will be caused to the Revenue in deciding this appeal on merit. In case of HL Malhotra & Company Pvt. Ltd. (ITA No. 211/2020 & CM Appeals 32045-32047/2020 dated 22nd December, 2020), the Hon’ble Delhi High Court has held that in absence of anything male fide or deliberate delay as a dilatory tactic, the Court should normally condone the delay as the intent is always to promote substantial justice. The explanation of the assessee therefore, becomes relevant to determine whether the same reflects sufficient and reasonable cause on his part in not presenting this appeal within the prescribed time.
In case of Collector, Land Acquisition, Anantnag & Anr. Vs Mst. Katiji and others (1987) 2 SCC 107, the Hon'ble Supreme Court has held that the expression ‘Sufficient Cause’ employed by the legislature is adequately elastic to enable the Courts to apply the law in a meaningful manner to sub- serves the ends of justice that being the life-purpose of the existence of the institution of Courts. It was further held by the Hon’ble Supreme Court that such liberal approach is adopted on one of the principles that refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. Another principle laid down by the Hon’ble Supreme Court is that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. It was also held by the Hon’ble Supreme Court that there is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of male fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. In the instant case, applying the same principles, we find that there is no culpable negligence or malafide on the part of the assessee in delayed filing of appeal and it does not stand to benefit by resorting to such delay. Therefore, in the factual matrix of the present case, we find that there exists sufficient and reasonable cause for condoning the delay in filing this appeal as held by the Hon’ble Supreme Court, where substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserved to be preferred.
In light of aforesaid discussions, in exercise of powers under section 254 of the Act, we hereby condone the delay in filing this appeal as we are satisfied that there is sufficient cause for not presenting this appeal within the prescribed time.
The purpose of granting approval under section 80G of the Act is to provide/enhance the socio-economic welfare to achieve the directive principles of the state policy. Section 80G of the Act is welfare legislation rather than penal in nature. Further, it is evident that the Ld. CIT(E) has rejected the approval under section 80G of the Act mainly due to non- compliance on the part of the assessee. Therefore, considering the larger interest of justice, objectives and intent of the provisions of section 80G of the Act and in view the facts in entirety & afore stated observations and in the interest of justice, we are setting aside the impugned order and are remanding the matter back to the file of the Ld. CIT(E) for deciding the issue of approval under section 80G of the Act afresh after affording reasonable opportunity of being heard to the appellant assessee. Ordered accordingly.
In the result, this appeal is allowed for statistical purposes.
Order pronounced in open Court on 11th June 2025