SAHARA EDUCATION SOCIETY,KURUKSHETRA vs. INCOME TAX OFFICER EXEMPTIONS, AMBALA

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ITA 198/CHANDI/2026Status: DisposedITAT Chandigarh18 August 2026AY 2023-20246 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal, subject to the appellant undertaking plantation of 1000 trees. The matter was remanded back to the CIT(Exemptions) for fresh adjudication on merits, allowing both parties to submit further material.

What were the facts?

The appellant society filed an appeal against an order passed by the CIT(Exemptions) rejecting its application for registration under section 12AB. There was a significant delay of 1033 days in filing the appeal, which the appellant attributed to non-receipt of the impugned order.

What were the issues?

Whether the delay in filing the appeal is liable to be condoned due to non-service of the order, and whether the matter should be adjudicated on merits after remanding it to the lower authority.

Which sections of the Income-tax Act were involved?

Section 12AB,Section 11,Section 2(15),Section 12A,Section 144B,Section 282

AI-generated summary — verify with the full judgment below

आयकर अपीलीय अिधकरण,च�ीगढ़ �ायपीठ “बी” , च�ीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH HEARING THROUGH: VIRTUAL MODE �ी लिलत कुमार, �ाियक सद� एवं �ी िवजय वमा� , लेखा सद� BEFORE: SHRI. LALIET KUMAR, JM & SHRI. VIJAY VARMA, AM आयकर अपील सं./ ITA No. 198/Chd/ 2026 िनधा�रण वष� / Assessment Year : 2023-24 Sahara Education Society बनाम The ITO Sahara Comprehensive School, Exemptions Amin Road, Kurukshetra, Haryana- Ambala 136118 �ायी लेखा सं./PAN NO: AACAS2507H अपीलाथ�/Appellant ��थ�/Respondent िनधा�रती की ओर से/Assessee by : Ms. Manisha Gupta, C.A राज� की ओर से/ Revenue by : Smt. Kusum Bansal, Pr. CIT, DR सुनवाई की तारीख/Date of Hearing : 13/08/2026 उदघोषणा की तारीख/Date of Pronouncement : 18/08/2026 आदेश/Order PER VIJAY VARMA, A.M: The present appeal has been filed by the Appellant against the order of the Ld. CIT, Exemptions, Chandigarh dt. 25/01/2023. 2. In the present appeal Appellant have raised the following grounds: 1. That the order passed by the learned Commissioner of Income Tax (Exemptions) erred in passing the order under section 12AB of the Income Tax Act , 1961 dated 25.03.2023 without duly serving the same upon the appellant and without bringing the said order to the knowledge of the appellant. The impugned order has been passed in violation of the principles of natural justice therefore bad in law and liable to be quashed. 2. That the impugned order passed under section 12AB is in gross violation of the principles of natural justice as the appellant was was neither served with a copy of the said order nor given a reasonable opportunity to respond or comply therewith, thereby causing serious prejudice to the appellant. 3. That the delay , if any, in filing the present appeal is solely on account of non-receipt of the impugned order and absence of any knowledge about the passing of such order, which constitutes a reasonable cause under the provisions of Income Tax Act. 4. That the learned CIT(E) has erred in law and on facts in holding that the appellant trust is not eligible for registration under section 12AB, without properly appreciating that the objects are charitable as defined under section 2(15) and that the activities of the trust are genuine. 5. That the appellant craves to add, delete, concede, modify any or all grounds of appeal at the time of hearing of appeal.

3.

The Appellant has also raised following additional grounds: 1. That, on the facts and in the circumstances of the case and in law, the learned Assessing Officer erred in denying exemption under section 11 of the Act on the sole and incorrect premise that the Appellant did not hold valid registration under section 12AB of the Act, whereas the Appellant held a valid, subsisting and uncancelled registration in Form No. 10AC dated 30.11.2022 bearing URN AACAS2507HE20211, granted under sub-clause (i) of clause (ac) of sub-section (1) of Section 12A of the Act, expressly valid from Assessment Year 2022-23 to Assessment Year 2026-27. 2. That, on the facts and in the circumstances of the case and in law, the Form 10AD dated 25.01.2023 is void, non est and incapable of adversely affecting the Form 10AC registration, since it was passed in respect of Application No. CIT EXEMPTIONS CHANDIGARH/2022-23/12AA/11316, which was the Form 10AB application filed on 30.09.2022 and surrendered by the Appellant on 15.11.2022a proceeding on an entirely different statutory track from the fresh Form 10A application filed on 16.11.2022 that resulted in the Form 10AC; that the CIT(Exemptions) was functus officio qua the Form 10AC registration, having already passed a final order thereon on 30.11.2022; that the Assessing Officer had no jurisdiction to collaterally attack or override the registration order of the CIT(Exemptions); and accordingly, the impugned assessment order, in so far as it relies on the Form 10AD as the basis for denying section 11 exemption, is vitiated by a fundamental jurisdictional 3. That, on the facts and in the circumstances of the case and in law, without prejudice to Additional Grounds 1 and 2, the Form 10AD dated 25.01.2023 was never validly served upon the Appellant in accordance with section 282 of the Act read with Rule 127 of the Income-tax Rules, 1962, having been merely uploaded on the portal without any email notification or postal dispatch; that mere passive uploading without effective communication to the Appellant does not constitute valid service; that the Appellant specifically stated this non-receipt in its replies dated 13.01.2026 and 29.01.2026; that an adverse order not effectively communicated to the affected party does not become operative against it; and that accordingly, the Form 10AD dated 25.01.2023 never became operative or enforceable against the Appellant. 4. That, on the facts and in the circumstances of the case and in law, without prejudice to Additional Grounds 1, 2 and 3, the observation in the Form 10AD dated 25.01.2023 purporting to 'supersede any registration granted w/s 12AB or 12AA of the Act by any authority at any earlier time' is legally impotent and of no effect as a cancellation of the Form 10AC registration bearing URN AACAS2507HE20211, since: (a) cancellation of a registration under section 12AB requires the mandatory statutory procedure prescribed under section 12AB(4) read with section 12AB(5), namely a specific show-cause notice identifying which clause of the Explanation to section 12AB(4) constitutes the 'specified violation', an enquiry, a meaningful opportunity of hearing, and a separate speaking order of cancellation; (b) none of these steps were taken in relation to the Form 10AC registration; (c) non-attendance at registration proceedings is not a 'specified violation' under any of the seven clauses (a) to (g) of the Explanation to section 12AB(4), which the Form 10AD proceedings were entirely based on; and (d) a stray recital in an unrelated order cannot substitute for the mandatory cancellation procedure; and accordingly, the Form 10AC registration remained operative and uncancelled for Assessment Year 2024-25. 5. That, on the facts and in the circumstances of the case and in law, the impugned assessment order is vitiated by non-application of mind and

3 violation of the requirements of section 144B of the Act, since the Assessing Officer: (a) failed to consider the Form 10AC bearing URN AACAS2507HE20211, which is the Department's own document accessible on the departmental portal and which is decisive of the entire controversy; (b) failed to verify or record any finding on the Appellant's specific submission dated 13.01.2026 that registration had been 'duly approved by the CIT(Exemptions), Chandigarh on dated 30.11.2022'; (c) proceeded mechanically on an incorrect database entry without independent verification of the actual registration position from the formal departmental record; and (d) disposed of all the Appellant's detailed submissions with the single repetitive phrase 'since the assessee does not have a valid registration certificate u/s 12AB, the submission is not acceptable', which is circular reasoning and not a reasoned finding on the merits of the submissions; and accordingly, the impugned order is liable to be set aside. 4. The present appeal is in respect of order passed on 25/01/2023 which has apparently been wrongly typed as 25/03/2023 in the grounds of appeal(supra).

5.

There is a delay of 1033 days in filing of appeal. The appellant has made out a reasonable cause for delay in filing the appeal in Ground No. 3 which is not appropriate as a separate application for condonation of delay, supported by an affidavit, was required to be filed rather than raising it as a ground of appeal. However, the appellant did file the application for condonation of delay and affidavit in support of condonation of delay which is placed from page 47-50 of the paper book filed by the appellant.

6.

The reasons for delay mentioned in the application for condonation of delay are reproduced herein under:

“1. That the accompanying appeal has been filed against the order dated 25.01.2023 passed by the learned Commissioner of Income Tax (Exemptions), Chandigarh under section 12A(1)(ac)(iii) of the Income-tax Act, 1961 rejecting the Appellant's application for registration under section 12AB. 2. That the appeal could not be filed within the prescribed period of limitation as the impugned order was never served upon or communicated to the Appellant. Consequently, the Appellant remained unaware of the passing of the said order. 3. The delay is of 1033 days. 4. That the Appellant acquired knowledge of the impugned order only subsequently. Immediately thereafter, the Appellant obtained a copy of the order, consulted its counsel and took prompt steps to file the present appeal before this Hon'ble Tribunal.

4 5. That the delay in filing the appeal is bona fide and neither deliberate nor intentional. The Appellant has acted diligently immediately after acquiring knowledge of the impugned order. 6. That the Appellant has a strong prima facie case on merits. The impugned order has been passed ex parte without considering the Appellant's case, and substantial questions of law and fact arise for consideration by this Hon'ble Tribunal. 7. That no prejudice will be caused to the Revenue if the delay is condoned, whereas irreparable loss and hardship would be caused to the Appellant if the delay is not condoned, resulting in denial of an opportunity to contest the matter on merits. 8. The Assessee relies on the principles laid down in: Collector Land Acquisition vs Mst Katiji (SC): Liberal approach should be adopted while condoning delay. N.Balakrishnan vs M Krishnamurthy (SC): Length of delay is not material sufficiency of cause is. Ell Aar Memorial Educational Trust Vs CIT (Exemption) (ITAT Chandigarh) 9. It is a settled principle of law that when sufficient cause is shown, matters should ordinarily be decided on merits rather than dismissed on technical grounds of limitation. 7. The appellant also placed some screenshot of e-filing portal in the paper book from page 43 to 46 which mentioned the details of various hearing notices issued by the Ld. CIT(E).

8.

The appellant’s main contention is that it was not aware of the order dt. 25/01/2023 and came to know of that during the assessment proceedings for A.Y. 2024-25 when the exemption was denied to the appellant in view of the impugned order dt. 25/01/2023.

9.

The appellant also placed a chronological chart of various registration and rejection on page 6 of the paper book which is reproduced hereinunder: Feature Form 10AB Application Form 10A Application (Surrendered) (Resulted in Form 10AC) Date of application 30.09.2022 16.11.2022 Statutory provision s.12A(1)(ac)(iii) - conversion s. 12A(1)(ac)(i) – migration of of provisional to regular existing 12A/12AA registration Status SURRENDERED ON 15.11.2022 Active ; resulted in Form _ before any order passed 10AC on 30.11.2022 Application Number CIT EXEMPTIONS 805869870161122

5 CHANDIGARH/2022- 23/12AA/11316 Outcome Form 10ad dated 25.01.2023_ Form 10AC dated ex-parte rejection 30.11.2022_ regular five year registration Date of outcome 25.01.2023 (AFTER Form 10AC 30.11.2022 of 30.11.2022)

10.

To summarise the appellant was first granted registration under section 12A(1)(ac)(vi) on 26/09/2022 for the period from A.Y 2023-24 to 2025-26 which is claimed to have been surrendered by the appellant and then the registration under 12A(1)(ac)(i) was granted on 30/11/2022, for the period from A.Y. 2022-23 to A.Y 2026-27 on 25/01/2023. An order was later passed in Form No. 10AD cancelling the registration with effect from 25/01/2023 as the appellant did not comply with the notices issued by the Ld. CIT(E) on 10/11/2022, 13/12/2022 and 28/12/2022 fixing up the date of compliance on 25/11/2022, 21/12/2022 and 04/01/2023 respectively. 11. The present appeal has been filed against this order. Subsequently the assessee was granted registration under section 12AB(1)(b) on 29/08/2025 for the period from Assessment Year 2027-28 to Assessment Year 2031-32. The appellant submitted that though the impugned order was uploaded on the e-filing portal, no email was received regarding notices of hearing issued which led to the non compliance. Screenshots of e-filing portal(supra) have been submitted by the appellant in support of the said claim. 12. From a perusal of the above facts and the record it is undisputed fact that the notices were uploaded on the e-filing portal. The registration on e- filing portal was of the appellant with access through login id and password. The issue in the request for condonation of delay is not the service of notice before passing of the impugned order but delay after passing of the impugned order. It is also an undisputed fact that there was non compliance of these notices, though these notices were available on e-filing portal. Therefore after considering all these facts and in the interest of justice the

6 delay is condoned subject to imposition of cost on the appellant which shall be paid in the following manner: “The assessee is directed to undertake the plantation of 1000 trees of Indian origin, with each sapling having a minimum height of four feet at a suitable place having regard to serving the larger public interest, as a cost imposed under this para” 13. As regards the merits of the case, we consider it appropriate to remand the matter back to the Ld. CIT(E) for fresh adjudication after considering all the material available on the record including that discussed in this order. The appellant shall be at liberty to make any further submission and Ld. CIT(E) shall also be at liberty to seek any further information which may be necessary for adjudication in this matter. The appellant is also directed to ensure compliance before the Ld. CIT(E).

14.

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

Order pronounced on 18/08/2026

Sd/- Sd/- लिलत कुमार िवजय वमा� (LALIET KUMAR) (VIJAY VARMA) �ाियक सद� /JUDICIAL MEMBER लेखा सद�/ ACCOUNTANT MEMBER AG आदेश की �ितिलिप अ�ेिषत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��थ�/ The Respondent 3. आयकर आयु�/ CIT 4. आयकर आयु� (अपील)/ The CIT(A) 5. िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, च�ीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File

BY ORDER, ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KENDRIYA SADAN, SECTOR-9A CHANDIGARH

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