MATUSHRI SANGHVI KAILASHBEN KANTILAL SHAH TRUST,MUMBAI vs. ITO (EXEMPTION)2(1), MUMBAI

The Registry pointed out that the present appeal has been filed with a delay of 89 days. The Ld. AR filed a petition seeking condonation of the delay, supported by a notarized affidavit duly sworn on 19.02.2026 by Mr. Nilesh K. Shah, Trustee of the assessee trust, explaining the reasons for the delay in filing the appeal before the Tribunal. The Ld. DR did not raise any serious objection to the prayer for condonation of delay. Having considered the submissions of both sides and the reasons stated in the affidavit, we are satisfied that sufficient cause has been shown for the delay. Accordingly, the delay of 89 days is condoned, and the appeal is admitted for adjudication on merits.

We heard the rival submissions and considered the documents available in the record. The assessee filed an application in Form No. 10AB on 31.03.2025 under Clause (iii) of 1st proviso of 80G(5) seeking approval u/s. 80G of the Act. The Ld. CIT(E) found that the relevant documents were not accompanied with the application filed by the assessee. So, the Ld. CIT(E) issued notice for furnishing the complete set of documents as mentioned in Rule 11AA(2). But no response was received from the end of the assessee. Accordingly, the Ld. CIT(E) rejected the application filed by the assessee. Being aggrieved, the assessee filed an appeal before us.

The Ld. AR contended that there is a reasonable cause of assessee for fail to comply the notice issued by the Ld. CIT(E). For strengthening the argument, the Ld. AR filed a notarized affidavit duly sworn on 04.08.2026 by Mr. Nilesh K. Shah, Trustee of the assessee trust and duly explained the reason for non-compliance of the documents. He argued that there is no deliberate inaction or have no malafide intention for noncompliance of the notice.

The Ld. DR contended that the Ld. AR had failed to demonstrate any reasonable cause for non-compliance of the notice issued by the Ld. CIT(E). He, therefore, strongly oppose the affidavit filed by the assessee and the reasons sought by the Ld. AR during the argument.

In our considered view, it is admitted fact that the application in Form No. 10AB, the assessee had failed to submit the set of documents which are primarily required for granting registration by the Ld. CIT(E). The reasonable opportunity was duly granted by the Ld. CIT(E) for filing the documents. But the assessee failed to do so. However, before the ITAT, the assessee has failed to provide a satisfactory explanation on its non-compliance with the notice issued by the Ld. CIT(E). We are of view that a cost should be imposed to emphasis the importance of adhere to Income Tax Proceeding. Accordingly, with due consent of the Ld. AR. we impose cost Rs. 1,100/- (Rupees One Thousand One Hundred Only) for the appeal filed by the assesse. Accordingly, the cost which is imposed Rs. 1,100/- (Rupees One Thousand One Hundred Only) will be paid to the credit of the Income Tax Department, under “Other Head” within one month from the date of receipt of this order subject to payment of the aforesaid cost which shall be duly verified by the Ld. CIT(E). All issues are remitted to the file of Ld. CIT(E) for adjudication on merits. We do not express any opinion on merit of the case to ensure that the appellate proceedings remain uninfluenced before the Ld. CIT(E). It is imperative with the assessee is allowed the reasonable opportunity of being heard. Furthermore, the assessee is expected to exercise due diligence in the set aside proceeding to facilitate the expedite disposal of the case.

In the result, the appeal of the assessee bearing ITA No.2315/Mum/2026 is allowed for statistical purposes. Order pronounced in the open court on 07th day of August 2026.