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Facts
The assessee faced a delay of 279 days in filing an appeal due to internal issues among trustees and lack of awareness of the order. The assessee's application for registration under Section 12AB was rejected by the CIT(E) for failure to respond to a show cause notice. The delay was condoned by the Tribunal.
Held
The Tribunal condoned the delay in filing the appeal and restored the application for registration to the CIT(E) with a direction to consider it after giving an opportunity of hearing. The assessee was directed to pay a cost of Rs. 5,000/-.
Key Issues
Whether to condone the delay in filing the appeal and whether to grant an opportunity of hearing to the assessee for the rejected registration application.
Sections Cited
12AB, 12A(1)(ac)(iii)
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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI GEORGE GEORGE K & SHRI S.R. RAGHUNATHA
आदेश /O R D E R
PER S. R. RAGHUNATHA, ACCOUNTANT MEMBER:
This appeal by the assessee is filed against the order of the learned Commissioner of Income Tax (Exemptions), Chennai, dated 19.02.2025.
At the outset, we find that there is a delay of 279 days in appeal filed by the assessee, for which the assessee has filed affidavit stating the reasons for delay, wherein, it is submitted that the assessee was not aware the order passed by ld.CIT(A), due to misunderstanding and creation of factions between trustees, only on resolving the issues among the trustees in the first week of December 2024, the office bearers came to know the rejection of :-2-: ITA. Nos.:692/Chny/2025 registration u/s.12AB of the Act. Hence, there was a delay in filing the appeal by the assessee. After considering the Affidavit filed by the assessee and also hearing both the parties, we find that there is a reasonable cause for the assessee in not filing appeal on or before the due date prescribed under the law and thus, in the interests of justice, we condone delay in filing of appeal and admit the appeal filed by the assessee for adjudication.
Before us, the ld.AR for the assessee stated that the assessee trust had filed applications before the ld.CIT(E) for registration u/s.12AB of the Act in Form No.10AB on 23.03.2024. As pointed by the ld.AR, we find from the grounds that the notices for SCN dated 06.03.2024 was uploaded in the e- portal and hence there was no effective service of the hearing notice. Further, the ld.AR stated that the assessee has filed along with the application for registration all the required documents to be provided. However, the ld.CIT(E) has rejected the application in Form 10AB for registration u/s.12A(1)(ac)(iii) of the Act by passing an order dated 23.03.2024, as per 4.3 of the order of the Ld.CIT(E) and also cancelled the registration. The ld.AR submitted that the application in Form 10AB has been rejected for non-filing of reply to SCN during the proceedings and hence prayed for providing one more opportunity before the Ld.CIT(E).
The ld.DR relied on the impugned order and prayed for confirming the same.
:-3-: ITA. Nos.:692/Chny/2025 5. We have heard both the parties, perused the record and impugned orders. It is an undisputed fact that the assessee had filed its application for registration u/s. 12A(1)(ac)(iii) on 01.09.2023. We note that the ld.CIT(E) passed an order in Form 10AD rejecting the registration u/s.12A(1)(ac)(iii) of the Act by passing an order dated 23.03.2024 for the reason that the assessee has failed to respond to the show cause notice.
In our considered view, in the interest of natural justice and equity, the assessee needs to be given one more opportunity to the assessee to participate the proceedings before the ld.CIT(E).
Therefore, keeping in mind the principles of natural justice we set aside and restore the application filed for registration u/s. 12A(1)(ac)(iii) on 01.09.2023, in form 10AB back to the file of the Ld.CIT(E) with a direction to the Ld.CIT(E) to consider the application filed by the assessee and pass the order in accordance with law by giving an opportunity of hearing to the assessee. Since the assessee has failed to participate before the ld.CIT(E), we levy the cost of Rs.5,000/- (Rupees Five Thousand only) to be paid to State Legal Aid Authority, Hon’ble High Court of Madras and produce proof of payment of cost to the Registry within 30 days from the date of receipt of this order. Needless to say, the assessee should be diligent in responding to the notices and furnish all the required documents during the proceedings without seeking unnecessary adjournments and providing correct address and email
:-4-: ITA. Nos.:692/Chny/2025 ID. Thus, the matter is restored to the CIT(E), Chennai. If assessee fail to appear then, no lenient view will be taken by the ld.CIT(E).
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 12th June, 2025 at Chennai.