JAGSHI K. SHAH PATRIWALA CHARITABLE TRUST,MUMBAI vs. THE CIT (EXEMPTION), MUMBAI

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ITA 2196/MUM/2025Status: DisposedITAT Mumbai15 May 2025AY 2024-256 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, in the interest of justice, decided to restore the matter to the Learned CIT(E) for fresh adjudication. The Tribunal acknowledged the assessee's explanation regarding the delay and the issues faced with their tax consultant. It was observed that the rejection orders were passed without further opportunity, possibly due to statutory time limitations for the CIT(E) to pass an order. The Tribunal directed the assessee to make necessary compliance before the CIT(E). The finding on the delay in filing appeals and the sufficiency of cause for non-compliance was implicitly accepted by remanding the matter for fresh adjudication. The ratio decidendi is that where a genuine procedural lapse occurs due to circumstances beyond the assessee's control, and the assessee demonstrates a willingness to comply, the matter can be remanded for fresh consideration to ensure justice.

What were the facts?

The assessee, Jagshi K. Shah Charitable Trust, filed appeals against the order of the Commissioner of Income-tax (Exemptions), Mumbai (CIT(E)). The CIT(E) rejected the assessee's application for registration under Section 12AB and approval under Section 80G of the Income-tax Act, 1961. The assessee had initially been granted provisional registration and approval. They subsequently applied for regular registration and approval on September 30, 2023. The CIT(E) issued a notice seeking compliance, which the assessee failed to meet. The rejection orders were passed on February 9, 2024, and February 22, 2024, respectively. The assessee claims to have learned of these rejections only on February 27, 2025, due to issues with their tax consultant.

What were the issues?

1. Whether the appeals filed by the assessee are within the prescribed time limit, considering the delay in the assessee becoming aware of the rejection orders? 2. Whether the assessee has sufficient cause for the delay in complying with the notices issued by the CIT(E) for furnishing trust deed and financial records? Assessee's Arguments: The assessee contended that the delay in filing the appeals was due to sufficient cause beyond their control. They explained that all trustees are senior citizens and relied heavily on their tax consultant. The tax consultant faced personal family issues and shifted his office, leading to a failure in communicating compliance notices to the trust. The assessee claimed they only became aware of the rejection orders on February 27, 2025, after receiving orders for AY 2023-2024. They requested a fresh opportunity to make the requisite compliance and sought directions for the CIT(E) to reconsider their applications. Revenue's Arguments: The judgment does not record any specific arguments made by the revenue.

Which sections of the Income-tax Act were involved?

Section 12AB,Section 80G

AI-generated summary — verify with the full judgment below

Before: SMT. BEENA PILLAI & SMT. RENU JAUHRI

For Appellant: Shri Dinesh Shah, Shri Vivek Perampurna
For Respondent: Shri Vivek Perampurna
Hearing: 15.05.2025Pronounced: 19.05.2025

Heard together (2 matters)

ITA No. 2197/MUM/2025
ITA No. 2196/MUM/2025

Read from the judgment's own cause title. This page is filed under one of them.

सुिवधई की िधरीख / Date of Hearing 15.05.2025 घोर्णध की िधरीख/Date of Pronouncement 19.05.2025 आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order of the Learned Commissioner of Income-tax (Exemptions), Mumbai [hereinafter referred to as “CIT(E)”] dated 09.02.2024 in rejecting the application for grant of registration & 2196/Mum/2025 A.Y. 2024-25 Jagshi K. Shah Patriwala Charitable Trust, Mumbai u/s 12A and application in Form 10AB for approval u/s 80G of the Income-tax Act, 1961 [hereinafter referred to as “Act”].

2.

The assessee has raised the following grounds of appeal:

“(i) There are peculiar facts and circumstances of the case. The appellant is very small trust having corpus of Rs. 10,000/- only. The tax consult has made application for registration of Trust u/s 12AB and 80G exemption approval u/s 80G(5) (i) and provisional registration and approval u/s 8G(5) (i) was granted on 12/05/2022 and the registration & approval was upto A.Y. 2025- 2026. (i.e. for Registration u/s 12AB and for 80G approval on 12/05/2022) (ii) The Charitable trust started activities and applied for regular registration u/s 12AB and approval u/s 8G(5) (i) on 30th September 2023. (iii) The Managing Trustee Mr. Jagshi K. Shah is super senior citizen and other trustee are also senior citizens but they are not familiar with taxation and accounts. (iv) The application under section 12AB & approval u/s 8G(5) (i) were made by the tax consultant giving his E mail ID but due to bad luck. The tax consultant borther's family has financial and other social problem. The tax consultant was busy with this problem and he shifted his office. The notice of compliance were sent on his (tax consultant E-mail) he failed to communicate the appellant trust and compliance i.e. submission of trust deed and financial records were not complied with even though same were available with the Income tax Department. (the Trust deed was submitted with name, address of all trustees and financial accounts are submitted with accounts) (v) The Registration u/s 12AB & approval u/s 8G(5) (i) were rejected by the CIT (Exemption) this facts came to the knowedge of the appellant only after receipt of order for the A.Y. 2023 2024 on 26/27th February 2025 (vi) There is delay in filing appeal against rejection of registration u/s 12AB of IT Act, 1961, which was rejected by the CIT(Exemption) Mumbai on 9th February 2024 and which came to the knowedge of the appellant i.e. to the managing trustees only on 27th February 2025. The appellant prevented from sufficient cause beyond his control. (vii) There is delay in filing appeal against rejection of approval u/s 8G(5) (i) of Income tax Act 1961 by the CIT(exemption) Mumbai on 22nd February 2024 and which came to the knowedge of the managing trustee of the appellant trust on 27th February 2025. The appellant is prevented from sufficient cause beyond his control. (viii) The appellant is filing separate condonation application by way of an affidavit from the managing trustee and considering the facts and circumstance of the case. The appellant request your honour to admit the appeal and humbly request your honour to give direction to the CIT (exemption) to reconsider the application for regular registration of the trust & 2196/Mum/2025 A.Y. 2024-25 Jagshi K. Shah Patriwala Charitable Trust, Mumbai u/s 12AB and approval u/s 8G(5) (i) i.e. granting the trust the benefit of exemption under section 80G of IT Act, 1961” (i) There are peculiar facts and circumstances of the case. The appellant is very small trust having corpus of Rs. 10,000/- only. The tax consult has made application for registration of Trust u/s 12AB and 80G exemption approval u/s 80G(5) (1) and provisional registration and approval u/s 8G(5) first proviso clauses (I to IV) was granted on 12/05/2022 and the registration & approval was upto A.Y. 2025-2026, (ie. for Registration u/s 12AB and for 80G approval on 12/05/2022) (ii) The Charitable trust started activities and applied for regular registration u/s 12AB and approval u/s 8G(5) first proviso clauses (I to IV) on 30th September 2023. (iii) The Managing Trustee Mr. Jagshi K. Shah is super senior citizen and other trustee are also senior citizens but they are not familiar with taxation and accounts. (iv) The application under section 12AB & approval u/s 8G(5) first proviso clauses (I to IV) were made by the tax consultant giving his E mail ID but due to bad luck. The tax consultant borther's family has financial and other social problem. The tax consultant was busy with this problem and he shifted his office. The notice of compliance were sent on his (tax consultant E-mail) he failed to communicate the appellant trust and compliance ie. submission of trust deed and financial records were not complied with even though same were available with the Income tax Department. (the Trust deed was submitted with name, address of all trustees and financial accounts are submitted with accounts) (v) The Registration u/s 12AB & approval u/s 8G(5) first proviso clauses (I to IV) were rejected by the CIT (Exemption) this facts came to the knowedge of the appellant only after receipt of order for the A.Y. 2023-2024 on 26/27th February 2025 (vi) There is delay in filing appeal against rejection of registration u/s 12AB of IT Act, 1961, which was rejected by the CIT(Exemption) Mumbai on 9th February 2024 and which came to the knowedge of the appellant i.e. to the managing trustees only on 27 February 2025. The appellant prevented from sufficient cause beyond his control. (vii) There is delay in filing appeal against rejection of approval u/s 8G(5) first proviso clauses (I to IV) of Income tax Act 1961 by the CIT(exemption) Mumbai on 22nd February 2024 and which came to the knowedge of the managing trustee of the appellant trust on 27th February 2025. The appellant is prevented from sufficient cause beyond his control. (viii) The appellant is filing separate condonation application by way of an affidavit from the managing trustee and considering the facts and circumstance of the case. The appellant request your honour to admit the appeal and humbly request your honour to give direction to the CIT (exemption) to reconsider the application for regular registration of the trust u/s 12AB and approval u/s 8G(5) first proviso clauses (I to IV) le. granting the trust the benefit of exemption under section 80G of IT Act, 1961”

& 2196/Mum/2025 A.Y. 2024-25 Jagshi K. Shah Patriwala Charitable Trust, Mumbai 3. These two appeals relate to the rejection of the assessee’s applications for the grant of registration u/s 12AB and the approval u/s 80G of the Act. As the facts are identical, these are being disposed of by a common order and is taken as the lead case.

4. Brief facts of the case are that the assessee was granted the provisional registration vide order dated 12.05.2022 for AYs 2023-24 to 2025-26. Thereafter, the assessee trust applied for regular registration u/s 12AB as well as approval u/s 80G vide separate Forms 10AB filed on 30.09.2023. In response to the notice by the Ld. CIT(E) seeking certain details and documents, the assessee failed to make any compliance, and therefore, the application for registration was rejected vide order dated 09.02.2024. As the registration was denied u/s 12AB, the application for approval u/s 80G was also rejected.

5.

Aggrieved by the order of Ld. CIT(E), the assessee has preferred appeals before the Tribunal. Ld. AR has explained that all the trustees are super senior citizens and, therefore, depended on their tax consultant. The authorised representative could not comply to the notice due to some pressing family issues. The order of rejection was thereafter passed without giving any further opportunity, keeping in view the statutory limitation of six months for passing the order. Ld. AR has, therefore, requested that a fresh opportunity may be granted to the assessee for making the requisite compliance.

& 2196/Mum/2025 A.Y. 2024-25 Jagshi K. Shah Patriwala Charitable Trust, Mumbai 6. We have heard the rival submissions and perused the material placed before us. In the interest of justice, we deem it appropriate to restore the matter to Ld. CIT(E) for fresh adjudication after providing adequate opportunity to the assessee to furnish the requisite details. The assessee is also directed to make necessary compliance before Ld. CIT(E).

7.

In the result, both the appeals of the assessee are allowed for statistical purposes. Order pronounced in the open court on 19.05.2025.

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