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Before: SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL & SHRI PRABHASH SHANKAR
Date of Hearing 29.09.2025 Date of Pronouncement 18.11.2025 आदेश / O R D E R PER PRABHASH SHANKAR [A.M.] :- The present appeal is preferred by the assessee Trust against the order passed by the Learned Commissioner of Income-tax (Exemptions), Mumbai [hereinafter referred to as “CIT(E)”] pertaining to the order passed u/s. 12AB of the Income-tax Act, 1961 [hereinafter referred to as “Act”] .
Bai Bhicaijee Jehangir Mody Parsi Sanatorium 2. The grounds of appeal are as under:- Ground No. 1: Denial of registration 1.1 On the facts and circumstances of the case and low, the learned Commissioner of Income-tax (Exemptions) (hereinafter referred to as “the Ld. CIT(A) for sake of brevity] has erred in rejecting the application filed in form 10AB seeking renewal of the registration for exemption under section 12AB of the Act. 1.2 The Appellant submits that Ld.CIT(E) erred in holding that the Trust is a private trust without appreciating the fact that it is a charitable trust registered under Bombay Public Trust Act, 1950 and it has been consistently assessed as a charitable trust until the rejection of the application for renewal. 1.3 The Appellant craves that its exemption be restored retrospectively from the date of rejection and allowed to file revised returns of income filed in the intervening period claiming the exemption once restored.
3. At the outset, It is noticed that the appeal is delayed by 492 days. In this regard, an application for condonation of delay has been filed as per record stating that the dealing person did not inform the partners in time regarding disposal of its appeal. In the affidavit of Shehrnaz Panthaky, it is stated that trust CA M/s R.S. Barucha and co did not take appropriate action at the relevant time as it was in the process of winding up. Neither the trustee nor Sri Jehangir Mistry, another trustee, looking after the registration work, were made aware of passing of the said order. Once Sri Mistry became aware of order, he immediately contacted another CA but the appeal was again not filed and trust engaged another CA which caused further delay. It is also stated that Sri Mistry is NRI settled in USA and he used to look after statutory compliance and the Trust relies on professional guidance of Bai Bhicaijee Jehangir Mody Parsi Sanatorium CAs. Therefore, under the circumstances beyond under control, the present appeal was filed delayed. The ld.DR has objected to the condonation application.
On careful consideration of the submissions of the assessee, we are of the considered opinion that the delay in filing of the present appeal was not intentional but on account of certain unavoidable reasons which could be considered as ‘sufficient reason’ attributed to the delay. In this connection, reliance could be placed on the landmark decision of hon’ble Supreme Court which inter alia held in Collector, Land Acquisition v Mst. Katiji And Others- 167 ITR 471 (SC) that “ordinarily, a litigant does not stand to benefit by lodging an appeal late……..Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated….Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period…. A litigant does not stand to benefit by resorting to delay. In fact, he runs serious risk.”Accordingly, in the interest of justice, we Bai Bhicaijee Jehangir Mody Parsi Sanatorium condone the delay and proceed to adjudicate the grounds of appeal filed by the assessee.
Briefly stated facts of the case are that the applicant Trust applied in Form 10AB for registration under Section 12AB, having earlier obtained provisional registration in Form 10AC. The ld.CIT(E) observed that the trust deed showed that only interest income from the corpus could be used for upkeep of the sanatorium, and records revealed that it was registered in Mumbai on 26.12.2018 as a private trust under Reg. No. C-1223. Since section 12AB applies only to public charitable or religious trusts, he held the application non est. As the trust is a private trust and there was a misinformation while filing the Application in Form 10AB, the application was rejected.
Before us, the ld.DR has placed reliance on the impugned order stating that the ld.CIT (E) had rightly rejected the assessee’s application in Form 10AB seeking registration under section 12AB of the Act. The ld.AR, on the other hand has submitted that the impugned order is not based on correct appreciation of facts as the trust is engaged in charitable activities and is not a private trust as held by the authorities. The Bench directed the ld.AR to submit all relevant details regarding objects of the trust, activities carried on alongwith evidences so as to Bai Bhicaijee Jehangir Mody Parsi Sanatorium demonstrate that it was engaged in charitable activities for the public at large. In compliance, a Paper book dated 10.10.2025 filed alongwith affidavit of one of the trustees stating objects, activities, details of trustees etc. which have been carefully perused.
We find that the impugned order has been passed without complete appreciation of facts and the circumstances of the case. All relevant issues involved have not been adjudicated. Considering the entirety of the facts and the circumstances of the case and in the interest of principles of natural justice and fair play, we consider it appropriate to send the entire matter back to the file of the ld.CIT(E) granting an opportunity to the assessee to advance its arguments and submissions before him, so as to provide details in connection with the merits of the case. Accordingly, in the substantial interest of justice, we set aside the impugned order and restore the entire matter back to him for passing the relevant order de novo after allowing adequate opportunity of hearing to the applicant Trust which is also directed to attend the proceedings before the ld.CIT(E) and cooperate with him in furnishing relevant details etc. as sought by him.
Bai Bhicaijee Jehangir Mody Parsi Sanatorium 8. In the result, the grounds of appeal and the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 18/11/2025.