BAI BHICAIJEE JEGANGIR MODY PARSI SANATORIUM,MUMBAI vs. THE COMMISSIONER OF INCOME TAX (EXEMPTION), MUMBAI

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.