SITARAM LAHOTI FOUNDATION,MUMBAI vs. COMMISSIONER OF INCOME (EXEMPTION), MUMBAI

Sitaram Lahoti Foundation, CIT(Exemptions), Mumbai C/o. AMITEX Agro Product Pvt. Ltd., 401 A Wing, Eureka Tower, Vs Mindspace Malad West, Mumbai-400064. PAN: ABCCS5615F (Appellant) (Respondent ) Assessee Represented by : Shri Bhavya Sundesha, CA & Shri Deven Shah Shri Satyaprakash R. Singh, CIT-DR Department Represented by : Date of Conclusion of hearing : 10.06.2025 Date of Pronouncement of Order : 10.06.2025 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER;

1. The learned Commissioner of Income Tax (Exemptions) erred in rejecting the application for Regular Registration u/s 12AB of the Act.

2. The learned Commissioner of Income Tax (Exemptions) erred in rejecting the application on the ground that no details were filed in response to notices issued u/s 12A(1)(ac)(iii) of the Act.

3. The appellant craves leave to alter, amend and/or add any other ground of appeal.”

2. Rival submissions of both the parties have been heard and record perused. The learned Authorised Representative (ld. AR) of the assessee fairly submits Sitaram Lahoti Foundation that impugned order was passed by ld. CIT(E) on 05.12.2023 and the present appeal is filed on 21.04.2025, thus there is delay of 417 days in filing appeal before Tribunal. The assessee has filed affidavit of Shri Radheshyam Sitaram Lahoti, Managing Director of assessee – trust. The ld. AR of the assessee submits that delay in filing appeal is neither intentional nor deliberate. In the month of August, 2023, the wife of managing trustee was seriously ill and was diagnosed with Hypoxic Ischemic Encephalopathy and was completely bed ridden. The assessee was looking after his wife who ultimately died. The managing trustee was looking after his wife and even could not file response to notices issued by ld. CIT(E) dated 07.11.2023. Though the assessee trust appointed a part time accountant for looking after certain financial affair from January, 2023 to March, 2024, who had also left without giving any prior intimation or handing over charge to anybody. The managing trustee is started looking after the affairs of assessee – trust from June, 2024 and was under bona fide belief that provisional registration under section 12AA is still valid till A.Y. 2025-26. However, when he approached CA Deven Shah in the month fo March, 2025 who advised to file appeal before Tribunal. The ld. AR of the assessee submits that there is no intentional or deliberate delay in filing appeal before Tribunal. The assessee – trust will suffer prejudice if delay in filing appeal is not condoned. To support his submission the ld. AR of the assessee relied upon the decision of Surat Bench in Shree Mahalakshmi Welfare & Charitable Trust Vs. CIT(E) (2024) 162 taxmann.com 841 (Surat-Trib.) and Chirag P. Thummar Vs. PCIT (2024) 159 taxmann.com 1628 (Surat-Trib.).

Sitaram Lahoti Foundation 3. On merit, the ld. AR of the assessee submits that ld. CIT(E) rejected the application for registration of assessee – trust under section 12A/12AB by holding that assessee was issued show cause notice and reminder to furnish complete set of documents as required as per Rule 17A(2) and the assessee fail to make compliance to such notice. The ld. AR of the assessee submits that assessee has furnished complete set of required evidence to prove the object and activities of assessee while filing application for registration of trust, however, he is still ready to provide all required / desired documents and evidences and matter may be restored back to the file of ld. CIT(E) for consideration of application of assessee afresh.

Sitaram Lahoti Foundation 5. We have considered the rival submissions of both the parties and have gone through the order of ld. CIT(E) carefully. We have also deliberate on various case laws relied by the parties. Firstly, we are considering the plea of condonation of delay. Before us, the ld. AR of the assessee vehemently urged that from the month of August, 2023, the wife of managing trustee was seriously ill and was diagnosed with Hypoxic Ischemic Encephalopathy and ultimately died. During such period the managing trustee was looking after his wife and even could not file response to notices issued by ld. CIT(E) dated 07.11.2023. It was also contended that the assessee trust appointed a part time accountant for looking after certain financial affair from January, 2023 to March, 2024, who had also left without handing over charge to anybody. It is also plea of assessee that Managing Director / Trustee was under bona fide belief that provisional registration under section 12AA is still valid till A.Y. 2025-26. All such facts are stated on affidavit. The assessee has also furnished certain medical papers about the illness of Smt. Indira Devi Radheshyam Lahoti. Considering the aforesaid facts and the submission of ld. Authorised representative of assessee, we find that delay in filing appeal by assessee is not intentional or deliberate. It is settled position in law that when technical consideration and cause of substantial justice are kept against each other, the cause of substantial justice must be preferred. Thus, keeping in view, such principle, delay in filing appeal of 417 days is condoned. Now, adverting to merits of the case.

Sitaram Lahoti Foundation 6. We find that ld. CIT(E) rejected the application of assessee for registration under section 12AB by holding that assessee was issued show cause notice dated 16.10.2023 and 07.11.2023 to furnish complete set of documents as required as per Rule 17A(2) and the assessee fail to make compliance to such notice. We find that application of assessee was rejected for the want of compliance. Before us, the ld. AR of the assessee prayed that due to illness of wife of Managing Director / Trustee, the assessee could not furnish requisite details and that they are ready to file all required evidences to substantiate object and activities of assessee. Considering the peculiar facts of the case and keeping in view the principle of natural justice, the matter is restored back to the file of ld. CIT(E) to reconsider the matter afresh and pass the order in accordance with law. Needless to direct the before passing the order, the ld. CIT(E) shall allow fair and reasonable opportunity to the assessee. The assessee is also directed to be more vigilant in making timely compliance and not to seek adjournment without valid reason.