BHARAT VIKAS PARISHAD ,MUMBAI vs. INCOME TAX OFFICER EXEMPTION WARD 1(1), MUMBAI

The grounds of both the appeals are as under:- 1. The Commissioner of Income-tax (Exemptions), Mumbai (hereinafter referred to as the CIT(E)) erred in rejecting the application for registration under section 12AB of the Act on the ground of non-compliance by the appellants. The appellants contend that on the facts and in the circumstances of the case and in law, the CIT(E) ought not to have rejected the application for registration inasmuch as he has not correctly appreciated the facts of the case in its entirety and hence, the action of the CIT(E) needs to be reversed. 2. The CIT(E) erred in framing an ex-parte order. 1. The Commissioner of Income-tax (Exemptions), Mumbai (hereinafter referred to as the CIT (E)) erred in rejecting the application for registration under section 12AB of the Act on the ground that (i) the application was earlier rejected by an order dated 13.03.2023 and (ii) as per CBDT Circular no 7/2024 dated 25.04.2024, a fresh application could be made only in cases where the application was filed after the due date, or under a wrong section code. The appellants contend that on the facts and in the circumstances of the case and in law, the CIT (E) ought to have admitted the application for registration under section 12AB and ought to have decided the case on merits. The appellants further, contend that on the facts and in the circumstances of the case and in law, the CIT (E) ought not to have relied on the CBDT Circular no 7/2024 to reject the application inasmuch as the said circular nowhere bars the assessees to file a fresh application (or a second application) under section 12AB and hence, the action of the CIT(E) is bad in law and needs to be reversed. 2. The CIT (E) erred in framing an ex-parte order.

It was informed by the Registry that both the appeals are delayed. While the appeal is delayed by 658 days in ITA No.1523, it is delayed by 40 days in ITA no.1522.In this regard, an affidavit of one Sri Rakesh Ostwal, stated to be member of the trust and past General Secretary and Treasure as also a qualified Chartered Accountant has been submitted. It is submitted by him that due to personal reasons he could not pay attention to the emails of the department sent to the Trust though he was handling accounts,audit and income tax related work since 2014.He came toknow of it only through another member Sri S.S.Gupta, CA who was also looking into these matters since November 2024.A new tax Consultant was appointed and the appeal was filed on 28.02.2025.It is contented that delay on part of the assessee trust was not intentional.As regards ITA no.1522,whih is delayed by 40 days similar reasons have been stated. 4. We have duly considered the above facts and find that the appeals have been filed belated due to negligence of one of the key persons looking after the income tax and related issues. We are of considered view that the assessee Trust should not suffer on account of negligence of the above person though the reasons adduced by him are not very convincing. In this connection reliance could be placed on the landmark decision of hon’ble Supreme Court which inter alia held in P a g e | 4

Before us, the ld.AR reiterated the grounds of appeal pleading that the claim of the assessee was wrongly rejected in ex parte manner on a mere procedural lapse on part of the assessee trust which is engaged in charitable activities. It is further stated that the CBDT Circular no.7/2024 has been wrongly interpreted by the ld.CIT(E) in rejecting its bonafide claim for registration. It is further submitted that the said Circular nowhere bars the assesses to file a fresh application (or a second application) u/s 12AB of the Act. 6.1 The ld.DR has made oral as well as written submissions in support of the orders of the ld.CIT(E).It is inter alia stated that both the impugned rejection orders dated 13.03.2023 and 25.04.2024 are fully justified. First application was materially deficient as it lacked essential documents required under Rule 17A(2). Several reminders were also issued following principles of natural justice. Registration u/s 12A is conditional right subject to satisfaction of by the CIT(E) of genuineness of its activities which the assessee failed to do. Reliance is also placed on the decision of coordinate Bench of ITAT, Ahmedabad in the case of Amrut Antidham Chartitable Trust, ITA No.545/Ahm/2023 wherein ITAT upheld rejection of application for registration on identical ground of non compliance and non co-operation.

We have considered the issue at length. It is fact that the assessee did not attend the proceedings before the ld.CIT(E) and did not furnish the required details which resulted in rejection of its claim for registration. Therefore, there is no substantive hearing of the case. However, it is equally true that it is the fundamental duty of the assessee to diligently pursue its case and comply with the notices and proceedings initiated by the Revenue authorities. The framework of the Act and the e-proceedings system rely heavily on the co-operation and active participation of the taxpayer. Despite the notices by the CIT(E), no substantive explanation was submitted. The failure of the assessee to make any response before the authority reflects gross negligence and an indifference. The principles of natural justice operate both ways, while the Revenue authorities are required to provide a reasonable opportunity of being heard, the taxpayer is equally obligated to co- operate with the authorities and utilize the opportunities extended. In the present case, despite receiving adequate opportunities, the assessee displayed a casual approach and indifference. 7.1 As the ld. AR has requested before us that the assessee may be given one more opportunity and this request which was not objected by the ld.DR, we are of the opinion that the scales of justice demands that the matter should be verified and revisited at the level of ld. CIT(E) and P a g e | 8