S M SHANKARRAO MOHITE-PATIL PRATISTAN,YASHWANTNAGAR vs. ITO WARD 1(2), PUNE

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ITA 371/PUN/2026Status: DisposedITAT Pune20 May 2026AY 2025-266 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal and set aside the CIT(E)'s order. The matter was restored to the CIT(E)'s file for fresh consideration, with a direction to grant the assessee one more opportunity to be heard.

What were the facts?

The assessee's application for registration under Section 12A(1)(ac)(vi) was rejected by the CIT(E) for non-compliance with a show cause notice and filing under the wrong clause. The assessee contended that the non-compliance was unintentional and sought an opportunity to present its case.

What were the issues?

Whether the rejection of the registration application was justified due to non-compliance with the show cause notice, and whether the assessee should be granted another opportunity to present its case.

Which sections of the Income-tax Act were involved?

Section 12A(1)(ac)(vi),Section 12A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE

Before: SHRI RAMA KANTA PANDA & SHRI ASTHA CHANDRA

For Appellant: Shri Piyush Bafna
For Respondent: Shri Amit Bobde, CIT-DR

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI RAMA KANTA PANDA, VICE PRESIDENT AND SHRI ASTHA CHANDRA, JUDICIAL MEMBER

ITA No. 371/PUN/2026 Assessment Year : 2025-26 S M Shankarrao Mohite-Patil Income Tax Officer, Pratistan, Ward-1(2), Shankarnagar, A/P- vs. Income Tax Office, Yashwantnagar, PMT Building, TAL-Malshiras Dist. Shankarsheth Road, Solapur Swargate, Maharashtra-413118. Pune PAN : AAGAS3096P Maharashtra-411037. (Appellant) (Respondent) Assessee by : Shri Piyush Bafna Department by : Shri Amit Bobde, CIT-DR Date of Hearing : 19-05-2026 Date of Pronouncement : 20-05-2026 O R D E R PER ASTHA CHANDRA, J.M.:

The appeal filed by the assessee is directed against the order dated 18-09-2024 of the Ld. Commissioner of Income Tax (Exemption)-Pune [Ld.CIT(E)], whereby he rejected the application of the assessee filed before him on 31-03-2024 in Form No. 10AB u/s. 12A(1)(ac)(vi)-ITEM(B) of the Income Tax Act, 1961 (‘the Act’).

2.

There is a delay of 419 days in filing of this appeal before the Tribunal for which the assessee has filed an affidavit explaining the reasons for such delay. After hearing both the sides, we are of the view that the delay is attributable to the sufficient cause. We, therefore, in light of the decisions of the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC) and in the case of Inder Singh Vs. The State of Madhya Pradesh reported in 2025 Live Law (SC) 339, condone the said delay and proceed to decide the appeal.

2 ITA No. 371/PUN/2026 3. Briefly stated, the facts of the case are that on receipt of the assessee's application filed in 10AB u/s. 12A(1)(ac)(vi) of the Act along with annexures thereto, 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, the Ld. CIT(E) issued notice on 03-06-2024 through ITBA portal which was duly served on the assessee requesting the assessee to upload certain information/clarification contained therein by 14-06-2024. On verification of the details filed by the assessee in response to the said notice, the Ld.CIT(E) observed various discrepancies which were communicated to the assessee vide issue of another notice/show cause notice dated 02-09-2024 seeking compliance by 09-09-2024. The said discrepancies pointed out by the Ld. CIT(E) are reproduced below:

"(i) As per financial statements and ITRs furnished by you, it is seen that the trust has claimed deduction u/s 11. Therefore, said provisions of sec. 12A(1)(ac)(vi)(B) of the Act are not applicable to your case. As such, your present application is liable to be rejected. Please clarify with supporting documents. ii) Kindly furnish evidences claiming expenses on charitable activities such as bills/vouchers/invoices alongwith photographs of charitable activities carried out by your trust."

3.1. The assessee failed to respond to the above show cause notice. The Ld.CIT(E), therefore, rejected the assessee’s application by observing as under:

“6. Since, the assessee has not furnished any explanation to the discrepancies communicated to it, it is presumed that the assessee has nothing to say in the matter. 7. Further, without prejudice to the above and as per financial statements and ITRs furnished by the assessee, it is seen that the trust has claimed deduction u/s 11. Therefore, said provisions of sec.12A(1)(ac)(vi) (B) of the Act are not applicable in the assessee's case. Thus, said provisions of sec. 12A (1) (ac) (vi) (B) of the Act are not applicable in the assessee's case. As such, the undersigned is left with no alternative but to reject the application.”

4.

Aggrieved, the assessee is in appeal before the Tribunal raising the following grounds: 1. On the facts and in the circumstances of the case, and on facts Hon'ble CIT(Exemption) Pune has erred in rejecting the appellant's application merely on the ground of alleged non-compliance with the show cause notice, without

3 ITA No. 371/PUN/2026 appreciating that such non-compliance was neither deliberate nor contumacious and could not have been the sole basis for rejection of statutory registration. 2. On the facts and in the circumstances of the case, and on facts Hon'ble CIT(Exemption) Pune has failed to appreciate that rejection of registration under section 12A/12AB is a serious civil consequence and could not have been done without granting an effective, meaningful, and reasonable opportunity of being heard, thereby violating the principles of natural justice. 3. On the facts and in the circumstances of the case, and on facts Hon'ble CIT(Exemption) Pune has erred in drawing an adverse presumption against the appellant solely on account of non-filing of reply, without examining the merits of the case or the material already available on record. 4. On the facts and in the circumstances of the case, the Hon'ble CIT(Exemption), Pune has erred in not appreciating that the appellant is genuinely engaged in charitable activities and is operating in accordance with its stated objects and applicable law, thereby fulfilling the eligibility criteria for registration under section 12A and hence, it should be granted the registration under section 12A of the Act. 5. On the facts and in the circumstances of the case, the Hon'ble CIT(Exemption), Pune has erred in rejecting the application for registration under section 12A of the Act without pointing out any specific instance of non-genuine activity or any violation of the objects of the Appellant trust, and therefore, the rejection is unjustified and the registration ought to have been granted. 6. On the facts and in the circumstances of the case, the Hon'ble CIT(Exemption), Pune has erred in law in holding that the provisions of section 12A(1)(ac)(vi)(B) were not applicable to the appellant, without properly appreciating the factual and legal context in which the application was filed. 7. On the facts and in the circumstances of the case, the Hon'ble CIT(Exemption), Pune has erred in law in rejecting the application as "not maintainable" without pointing out any statutory bar under the Income-tax Act, 1961, and without affording the appellant an opportunity to rectify or refile the application under the appropriate clause, if required. 8. On the facts and in the circumstances of the case, the impugned order is vitiated as it does not contain any finding that the activities of the appellant are non-genuine or not in accordance with its stated objects, which is a mandatory requirement for rejection or cancellation of registration. 9. On the facts and in the circumstances of the case, the Hon'ble CIT(Exemption), Pune has erred in not following established judicial precedents wherein courts and tribunals have held that minor procedural lapses should not be the basis for rejection of a genuine charitable trust's registration. 10. On the facts and in the circumstances of the case, the Hon'ble CIT(Exemption). Pune has exceeded his jurisdiction by proposing rejection and cancellation of registration on purely technical and procedural grounds, without satisfying the substantive conditions laid down under section 12AB for cancellation of registration. 11. On the facts and in the circumstances of the case, the Ld. CIT(Exemption), Pune has erred in law in holding that he was "left with no alternative" but to reject the application, whereas the Act empowers the authority to adopt a facilitative and corrective approach in matters of charitable registration. 12. On the facts and in the circumstances of the case and without prejudice to the above grounds, Hon'ble Tribunal may kindly restore the matter for fresh consideration before Ld. CIT(Exemption), Pune and permit the appellant to file a fresh or revised application under the appropriate clause of section 12A(1)(ac), instead of outright rejection.

4 ITA No. 371/PUN/2026

13.

The Appellant craves leave to add, amend, alter, modify, vary, or withdraw all or any of grounds of appeal, in the interest of justice, if necessary, at the time of hearing of the appeal.

5.

The Ld.AR submitted that non-compliance before the Ld.CIT(E) was not intentional, the assessee was not aware of the notice issued by the Ld.CIT(E) as it inadvertently missed the same. He submitted that the assessee is in a position to substantiate its case before the Ld.CIT(E) to his satisfaction by filing the requisite details/documents. He has, therefore, humbly prayed that in the interest of justice, an opportunity may be granted to the assessee to pursue his case before the Ld.CIT(E).

6.

The Ld.DR, on the other hand, supported the order of the Ld.CIT(E).

7.

We have heard the Ld. Representatives of the parties and perused the material available on record. Admittedly, there was non-compliance to the show cause notice issued by the Ld.CIT(E) due to which the various discrepancies pointed out by the Ld.CIT(E) [reproduced above] remained un-responded to by the assessee. We observe that the Ld.CIT(E) has rejected the assessee’s application for registration u/s. 12A of the Act due to non-compliance of the show cause notice issued to the assessee and filing of application under the wrong clause. Before us, the counsel for the assessee has submitted that non-compliance to the notice issued by the Ld.CIT(E) was not intentional, but resulted due to the reasons cited above. He has, therefore, humbly prayed that in the interest of justice, an opportunity may be granted to the assessee to substantiate its case before the Ld.CIT(E) by filing the requisite details/documents to the satisfaction of the Ld.CIT(E).

8.

Considering the totality of the facts and in the circumstances of the case, we deem it fit and proper, in the interest of justice, to set aside the

5 ITA No. 371/PUN/2026 impugned order of the Ld. CIT(E) and restore the matter to his file with a direction to decide the assessee's application for registration u/s 12A of the Act afresh on merits as per fact and law after affording one more opportunity of hearing to the assessee. The assessee is also hereby directed to make its submissions before the Ld. CIT(E) 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 as per law.

9.

At the same time, due to callous attitude of the assessee in delay in filing of the appeal before the Tribunal and not responding to the notice issued by the Ld.CIT(E), we levy a cost of Rs. 5,000/- on the assessee, which shall be deposited within one month from the receipt of this order. The Ld.CIT(E) shall ensure that the cost has been deposited before disposal of the appeal. We hold and direct accordingly. The grounds of appeal raised by the assessee are accordingly allowed for statistical purposes.

9.

In the result, the appeal filed by the assessee is treated as allowed for statistical purposes. Order pronounced in the open Court on 20th May, 2026

Sd/- Sd/- (RAMA KANTA PANDA) (ASTHA CHANDRA) VICE PRESIDENT JUDICIAL MEMBER

पुणे/Pune; दिन ांक/Dated : 20-05-2026 TNMM

6 ITA No. 371/PUN/2026 आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी / The Appellant 2. प्रत्यर्थी / The Respondent 3. The concerned Pr.CIT, Pune 4. DR, ITAT, ‘B’ Bench, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune

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