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Facts
Alpha Charitable Trust filed an application for registration under Section 12AB, which was rejected by the CIT (Exemption) due to non-compliance. The Trust then filed an appeal with the ITAT after a significant delay of 656 days, citing lack of awareness regarding tax procedures and non-receipt of the physical rejection order.
Held
The Tribunal condoned the 656-day delay in filing the appeal, applying a lenient view for substantial justice. It remitted the matter back to the CIT (Exemption) for fresh consideration, directing the CIT (Exemption) to provide a reasonable opportunity of hearing to the Assessee, and the Assessee to ensure timely compliance.
Key Issues
Condonation of delay in filing appeal; Rejection of application for registration under Section 12AB without providing sufficient opportunity of hearing.
Sections Cited
12A, 12AB
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Income Tax Appellate Tribunal, MUMBAI BENCHES “A”, MUMBAI
Before: SHRI PAWAN SINGH & MS.PADMAVATHY S
Per :Pawan Singh, Judicial Member:
This appeal by the Assessee is directed against the order of CIT (E) dated 30.12.2022. The Assessee has raised following grounds of appeal:-.
(1) The learned CIT (Exemption), Pune; erred in law and on facts in rejecting appellant’s application for registration u/s 12A of ITA, 1961. (2) The learned CIT (Exemption), Pune; ought to have appreciated that appellant’s activities are genuine and bonafide, and as such, eligible for registration u/s 12A of ITA, 1961. (3) The learned CIT (Exemption), Pune, erred in law and on facts in not providing sufficient reasonable opportunity of being heard to the appellant, as provided u/s 12AB of the ITA, 1961; to submit the details/information. Appellant contends that, Appellant is keen to ensure complete and total compliance as so required, and the present situation is simply a fall-out of communication gap. (4) Appellant craves leave to add, alter, clarify, explain, modify, delete any or all of the grounds of appeal, and to seek any just and fair relief.
Perusal of record shows that impugned order was passed by Ld. CIT (Exemption) on 30.12.2022, however, the present Appeal is filed only on 15.01.2025. Thus there is delay of 656 days in filing appeal before the Tribunal.
The appellant-Trust has filed application for condonation of delay, which is supported by the affidavit of Amis Michael Lopes, Managing-Trustee of the Assessee. In the application, the appellant /assessee submitted that they were incorporated in the year 2021 and are not very well aware about Income Tax procedure and compliances. The application of the Assessee for registration u/s 12AB was rejected by ld CIT(Exemption), the Assessee could not realized the rejection of application immediately. The Ld. AR of the Assessee submits that physical copy of order was not served and on searching the status of registration of Trust the Assessee came to know about dismissal recently. The Assessee was in the process of searching new consultant for making compliance before Income Tax authorities and to take remedial action against the dismissal of their application under section 12AB. The Ld. AR for the assessee submits that the Assessee is a Charitable Trust and engaged in charitable activities in accordance with its object. The delay in filing appeal is neither intentional nor deliberate. The Assessee has good case on merit and is likely to succeed, if one more opportunity is given to contest the application on merit. To support his submission the Ld. AR of the Assessee relied upon the following case laws:- N. Balakrishnan Vs. M. Krishnamurthy (1998) 7 SSC 123 Collector, Land acquisition Vs. Mst Katiji (1987) 167 ITR 471 (SC) Senior Bhosale Estate (HUF) V. Asst. CIT ([2019] 269 Taxman 472 (SC)) 3. On merit, the Ld. AR of the Assessee submits that application of the Assessee for registration under Section 12AB was rejected for the want of compliance.
The activities of the Assessee are in the furtherance of their object. At the time of filing application for registration the Assessee furnished requisite details. The notice of hearing application for registration was not came to the notice of Managing Trustee of the Assessee, thus, it seems that no compliance was made or the information provided at the time of filing application was not sufficient.
The Ld. AR of the Assessee submits that the matter may be restored back to the file of CIT (Exemption) for consideration of application of the Assessee as afresh. He undertakes on behalf of the Assessee to be more vigilant in making timely compliance.
On the other hand, the Ld. Commissioner of Income Tax-Departmental Representative (ld CIT-DR) for the Revenue, on the plea of condonation of delay of Assessee submits that Assessee has not explained the delay in proper manner. The delay is not ordinary. The Assessee has disclosed a self-serving story for seeking condonation of delay. No compliance in response to notice issued by CIT (Exemption) was made by the Assessee thus, the Assessee is neither entitled for condonation of delay nor have good case on merit.
We have considered the rival submission of both the parties and have gone through the order of CIT (E). Firstly, we are considering the plea of assessee in condoning the delay in filing the present appeal. We find that application of the Assessee for registration under Section 12AB was rejected vide order dated 30.12.2010. The Assessee filed the present appeal on 15.01.2025. The registry of this Tribunal worked out the delay of 656 days in filing appeal. The Assessee has filed affidavit of Managing Trustee namely Amis Michael Lopes. In the affidavit as well as in application the Assessee submitted that they are imparting Education and Vocational Training including Orphanage and Child Care Centre. It is further plea of the Assessee that they set up the Institution in 2021 and were not well worse with the various compliance and working of Income Tax Portal. The Ld. AR of the Assessee vehemently argued that delay in filing appeal is not intentional and main reason was that physical copy of rejection order was not received. Considering the overall facts and the plea raised in the application for condonation of delay as well as in the submission, we find that reason disclosed in the application for condonation of delay is not convincing, yet, keeping in view the principle of law that when technical consideration and cause of substantial justice are kept against each other, the cause of substantial justice may be preferred. The Assessee is not going to be benefitted by resorting a delay. Unless the delay is malafide reasons and based on untenable grounds or arbitrary it may not be condoned. Thus taking a lenient view and keeping in view the fact that the Assessee is not going to be benefitted by filing appeal belatedly, the delay in filing appeal is condoned. Now adverting to merit of the case.
On perusal of impugned order we find that the Assessee filed application in Form 10AB for registration under Section 12AB on 03.06.2022. The Ld. CIT (Exemption) vide notice dated 03.09.2022 directed the Assessee to furnish details about commencement of activities, date of expiration of provisional registration, details of other law applicable for achieving object and compliance thereof. The Assessee was also directed to furnish proof of identity of main Trustee and annual account of last three years with supporting evidence. The CIT (Exemption) recorded that the Assessee failed to furnish such details. In absence of such details, the CIT (Exemption) concluded that in absence of compliance genuineness of activities of the Assessee viz-a-viz its object was not proved. The CIT (Exemption) in absence of such details rejected the application.
7. Before us, the Ld. AR of the Assessee undertakes to provide all requisite details, if one more opportunity is given, therefore, keeping in view the fact that CIT (Exemption) passed the ex-parte order hence, we deem it appropriate to restore the appeal to the file of CIT (Exemption) with the direction to consider it afresh. Needless to direct that before passing the order CIT (Exemption) shall provide requisite opportunity of hearing to the Assessee. The Assessee is also directed to be more vigilant in future and to make timely compliance. In the result grounds of appeal raised by the Assessee are allowed for statistical purpose.
In the result, appeal of the Assessee is allowed for statistical purpose.