RESERVE BANK STAFF QUARTERS SCHOOL,CHENNAI vs. COMMISSIONER OF INCOME TAX(EXEMPTIONS), CHENNAI
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 remitted back to the CIT(E) to decide the application afresh after providing reasonable opportunities to the assessee.
What were the facts?
The assessee applied for registration under Section 12AA of the Income Tax Act. The CIT(E) rejected the application due to non-compliance with requests for clarification, citing the COVID-19 pandemic and lockdown as reasons for inability to furnish documents.
What were the issues?
Whether the rejection of the registration application under Section 12AA was justified given the circumstances of the COVID-19 pandemic and lockdown, and whether the assessee was provided with adequate opportunities.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Before: Shri V. Durga Rao & Shri G. Manjunatha
O R D E R
PER V. DURGA RAO, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax [Exemptions], Chennai, dated 31.08.2020 in rejecting the application for registration under section 12AA of the Income Tax Act, 1961 [“Act” in short].
The appeal filed by the assessee is delayed by 95 days in filing the appeal before the Tribunal due to outbreak of COVID-19 pandemic and accordingly, the delay is condoned and admitted the appeal for adjudication.
The assessee-applicant filed an online application in Form 10A for registration under section 12AA of the Act on 11.11.2019. While processing the application, the ld. CIT(E) has noticed that certain particulars were required to process the application as per section 12AA(1) of the Act. Accordingly, the applicant was requested to furnish its clarifications vide e-mail dated 11.03.2020. Since the assessee has not complied with any of the three opportunities granted, the ld. CIT(E) has rejected the application for registration under section 12AA of the Act.
Before us, the ld. Counsel for the assessee has submitted that due to the While so, due to the unanticipated outbreak of COVID-19 and the resultant national lockdown and curfew announced by the Central and State Government, the assessee-applicant school was forced to shut down in March. Much like others, the lockdown fully impacted the functioning of the applicant’s school and the management of the school were not in a position to access their systems, emails, files and records till the end of July. The management of the Applicant school was able to access its system and files only by the last week of July, when the lockdown restrictions were relaxed by the Central and State Government. It was further submission that the ld. CIT(E) vide notice dated 11.03.2020 required the Applicant to furnish several documents and information on 26.03.2020 at their office, to process the application filed by the Applicant under section 12AA of the Act. In the said notice, the ld. CIT(E) has mentioned that if the Applicant failed to furnish the necessary information and documents on 26.03.2020, then the case would stand automatically adjourned to 07.04.2020 and thereafter to 16.04.2020 and if the Applicant failed to comply by the said dates, then further opportunity would not be granted. The ld. Counsel for the assessee has further submitted that the entire country was faced with an unprecedented crisis and was under a stringent lockdown and the Applicant was not in a position to access their systems and files, much less furnish the required information and documents on the dates specified in the notice dated 11.03.2020. Since the school was imparting education to children from deprived and marginalized families and the registration under section 12AA of the Act would greatly help in imparting quality education, the ld. Counsel prayed for affording reasonable opportunity for furnishing all required details for grant of registration under section 12AA of the Act.
On the other hand, the ld. DR has not seriously object to the submissions of the ld. Counsel.
We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. In this case, the assessee-applicant filed an application in Form 10A for registration under section 12AA of the Act on 11.11.2019. The ld. CIT(E) has called for clarification vide his email dated 11.03.2020 by affording three opportunities, in fact, the opportunities afforded to the assessee are during the nation-wide lockdown due to outbreak of Covid-19 pandemic.
6.1 We find that the clarification sought for by the ld. CIT(E) pertains to the period of outbreak of Covid-19 pandemic. Vide order in Miscellaneous Application No. 665 of 2021 dated 23.03.2020, the Hon’ble Supreme Court has given directions that the delay is to be condoned during the period from 15.03.2020 to 14.03.2021 and they have condoned the delay upto 28.02.2022 vide order in Miscellaneous Application No. 21 of 2022 dated 10.01.2022.
6.2 Under the above facts and circumstances, we set aside the order of the ld. CIT(E) and remit the matter back to the file of the ld. CIT(E) to decide the application afresh by affording reasonable opportunities of being heard to the assessee. The assessee is also directed to furnish complete details before the ld. CIT(E) for the purpose of grant of registration under section 12AA of the Act.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on the 24th August, 2022 in Chennai.
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