CHHABA ( CHHAYA AND BAJIRAO) FOUNDATION TRUST,RAIGAD vs. CIT(E), PUNE

There is a delay of 372 days in filing of both the appeals before the Tribunal for which the assessee has filed condonation application along with affidavit explaining the reasons for such delay. The contents of the affidavit read as under: “I, Mr. Damodar Bajirao Chavan (PAN: AIQPC0236Q), residing at C-202, 2nd Floor, Sheetal Dhara Complex, Opp. Jain Park, Kalamboli Node, Raigarh, Maharashtra, India-410218, being President of Chhaba (Chhaya and Bajirao) Foundation Trust (hereinafter referred to as appellant) having PAN: AADTC0353P, have to solemnly state and affirm as below: ii. The appellant's objects are charitable in nature, covering relief to the poor, promotion of education, provision of medical relief, and advancement of objects of

Relying on various decisions the Ld. Counsel for the assessee submitted that the delay in filing of the appeal should be condoned.

The Ld. DR on the other hand strongly opposed the condonation application filed by the assessee.

We have heard the rival arguments made by both the sides on the issue of delay in filing of the appeal and considered the contents of the condonation application filed along with the affidavit of the assessee and also the affidavits filed by the consultants.

We find the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. reported in 167 ITR 471 (SC) has held that when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non- deliberate delay. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties.

We find recently the Hon’ble Supreme Court in the case of Inder Singh Vs. The State of Madhya Pradesh reported in 2025 LiveLaw (SC) 339 has held as under: “14. There can be no quarrel on the settled principle of law that delay cannot be condoned without sufficient cause, but a major aspect which has to be kept in mind is that, if in a particular case, the merits have to be examined, it should not be scuttled merely on the basis of limitation.”

Considering the totality of the facts of the case and in the light of the decisions of Hon’ble Supreme Court cited (supra), the delay in filing of the appeal is condoned and the appeal is admitted for adjudication.

In ITA No. 2319/PUN/2025, the assessee has challenged the order of the Ld. CIT(E) in rejecting the application for registration u/s 12A of the Act while ITA No.2320/PUN/2025 relates to the order of the Ld. CIT(E) in denying the approval u/s 80G of the Act.

Facts of the case in ITA No.2319/PUN/2025, in brief, are that the assessee filed an application in Form No.10AB on 04.01.2024 for registration of the trust under clause (iii) of section 12A(1)(ac) of the Act. With a view to verify the genuineness of the activities of the assessee and compliance to requirements of any other law for the time being in force by the trust/institution as are material for the purpose of achieving its objects, a notice was issued and duly served upon the assessee through ITBA portal on 22.03.2024 requesting the assessee to upload certain information/clarification contained therein by 08.04.2024. The Ld. CIT(E) while going through these details submitted by the assessee in response to the said notice and documents filed along with the application, found various discrepancies for which he issued another notice/show cause notice on 24.06.2024. The said discrepancies recorded by the Ld. CIT(E) in para 3 of the impugned order is reproduced below: “3. … "(i) As per activity note, you have done some activities with collaboration with other trust/foundation in respect of which furnish copy of respective documents/agreements. (ii) In respect of donation received, furnish the details viz. name of donors, PAN/ address of donors, amount of donation, mode of donation, receipt no. etc. Also furnish the copies of receipt issued to the donors by your trust. (iii) Furnish the copies of bills/invoices of expenses done on activities.”

The assessee filed its response to the above notice on 01.07.2024. On verification of the documents furnished by the assessee, the Ld. CIT(E) having dissatisfied about the genuineness of the activities of the assessee trust, rejected the application filed by the assessee and also cancelled the provisional registration granted earlier on 24.05.2022 by observing as under : “4. The assessee responded to the notice on 01/07/2024. On verification of the documents it is found that the assessee trust has submitted 3 photographs of 1 event organised in the year 2023 depicting school bag distribution. Also, the trust has claimed expenses of Rs 7.42 lakhs towards distribution of school bags and relief to poor in FY 2022-23. However, except of bag distribution activity, the assessee trust failed to provide any details of relief to poor. Also, the assessee has also not submitted any bills/invoices/vouchers towards claimed activities. Therefore, the genuineness of activities remained questionable. Further, the trust has not provided any details of donations as requested in the earlier notices.

Aggrieved with such order of the Ld. CIT(E), the assessee is in appeal before the Tribunal by raising the following grounds of appeal : “1. The learned CIT (Exemption), Pune; erred in law and on facts in rejecting appellant's application for regular registration u/s 12A(1)(ac)(iii) of ITA, 1961 and in cancelling the provisional registration of the ITA, 1961. 2. Appellant contends that, appellant's application for registration u/s 12A of ITA, 1961 is Bonafide as regards charitable object and activities. Appellant further contends that, Appellant is keen to submit all requisite documents and proofs before the I-T authorities to justify the charitable object and activities. 3. The learned CIT (Exemption), Pune; erred in law and on facts in holding that activities of the appellant are not genuine. 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. 4. The appellant respectfully submits that all activities undertaken by it are genuine, bona fide, and carried out solely in furtherance of the objects of the Trust. The charitable nature of these activities is in full conformity with the requirements of Section 12A of the ITA, 1961. 5. The learned CIT (Exemption), Pune erred in law and on facts in holding that all activities were carried out prior to the incorporation of the trust on 09/03/2022, without appreciating that the appellant had also submitted details of activities undertaken after incorporation, which were not duly considered. 6. 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.”

Admittedly, the facts of the case in ITA No.2320/PUN/2025 are similar to that of ITA No.2319/PUN/2025 narrated above. Similar grounds have been raised in ITA No. 2320/PUN/2025 which read as under:

It is the submission of the Ld. AR that since the Ld. CIT(E) has rejected the grant of registration u/s 12A of the Act and cancelled the provisional registration granted earlier, he refused to grant approval u/s 80G of the Act.

The Ld. AR submitted that all the activities undertaken by the assessee trust are genuine and bonafide activities and are carried out solely in furtherance of the objects of the assessee trust. He also submitted that the assessee has carried out activities even after 09.03.2022 which is post incorporation of the trust, the details of which were duly submitted before the Ld. CIT(E) which has not been considered by him. The Ld. AR submitted that given an opportunity the assessee is in a position to substantiate its case by submitting all the requisite documents and details before the Ld. CIT(E) in order to justify the charitable objects and activities of the trust. He, therefore, prayed that in the interest of justice, the matter may be set aside to the file of the Ld. CIT(E) for de-novo consideration of the assessee’s application(s).

The Ld. DR had no objection to the above proposition of the Ld. AR.

We have heard Ld. Representatives of the parties and perused the material available on record. We find that the Ld. CIT(E) has rejected the assessee’s application for registration u/s 12A of the Act and also cancelled the provisional registration granted earlier to the assessee on 24.05.2022 for the reasons mentioned in the preceding paragraphs. Since section 12A registration was not there, he rejected grant of approval u/s 80G as well. We find that primarily, the Ld. CIT(E) has doubted the genuineness of the activities carried out by the assessee trust. Before us, the Ld. AR has submitted that all the activities of the trust prior to its incorporation as well as post incorporation were carried out towards furtherance of objects of the trust. He has submitted that given an opportunity the assessee is in a position to substantiate its case

Considering the totality of the facts and in the circumstances of the case enumerated above and in the interest of justice, we deem it proper, to set aside the impugned order(s) of the Ld. CIT(E) and restore the issue(s) to his file with a direction to grant one more opportunity to the assessee to explain and substantiate its case to his satisfaction by filing the requisite details/documentary evidence and decide both the applications of the assessee u/s 12A and 80G of the Act afresh as per fact and law. The assessee is also hereby directed to make its submissions on the appointed date without seeking any adjournment under any pretext, unless required for the sufficient cause, failing which the Ld. CIT(E) shall be at liberty to pass appropriate order(s) as per law. We hold and direct accordingly. The grounds raised by the assessee in both the appeals are accordingly allowed for statistical purposes.

In the result, both the appeals in ITA Nos. 2319 & 2320/PUN/2025 filed by the assessee are allowed for statistical purposes.