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Income Tax Appellate Tribunal, Hyderabad ‘B’ Bench, Hyderabad
Before: SHRI RAVISH SOOD & SHRI MADHUSUDAN SAWDIA
आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M. : This appeal filed by M/s. Kalinga Institute of Mining Engineering and Technology Trust (“the assessee”) against the order passed by the Learned Commissioner of Income Tax (Exemption), Hyderabad (“Ld. CIT(E)”) dated 25.07.2024 u/s. 12AB(4) of the Income Tax Act, 1961 (“the Act”), whereby the registration of the assessee trust u/s 12AB of the Act was cancelled.
The assessee has raised the following grounds of appeal :
1. “ 1. The respondent erred in concluding that the trust misrepresented its asset position. The reconstitution deed accurately reflected the assets at the time of reconstitution, and subsequent disclosures in the Balance Sheet filed with Form 10A were transparent and in compliance with the law.
2. The appellant was not afforded sufficient opportunity to present its case. The lack of response to specific notices does not imply non-compliance or fraud, especially when the appellant has been actively filing returns and responding to other compliance requirements.
The respondent misapplied section 12AB(4) by categorising the trust’s activities as non-genuine without substantive evidence. The interest income earned on fixed deposits was disclosed, and its utilisation for charitable purposes is evident from the financial statements.
4. The trust was granted provisional registration u/s.12A for A.Y. 2022-23 onwards, and the order failed to consider this valid registration while concluding its findings.
5. The cancellation of registration and simultaneous invocation of section 115TD for taxing accreted income is premature and excessive. The trust was compliant with reporting requirements, and the invocation of punitive provisions lacks merit.
6. The trust has been engaged in charitable and educational activities as evidenced by its application of interest income for building and related activities. The respondent failed to acknowledge these genuine efforts.”
3. At the outset, it is noted that there is a delay of 85 days in filing the present appeal before the Tribunal. In support of the condonation request, the assessee has filed a condonation petition along with a sworn affidavit dated 03.02.2025. In this regards the Learned Authorised Representative (“Ld. AR”) of the assessee submitted that, due to severe health deterioration of the Chairman of the assessee trust, he was physically unfit to attend to responsibilities including timely filing of the appeal. As a result, there was a delay in filing of this appeal by 85 days. He further submitted that the delay was unintentional, unavoidable, and occurred due to medical exigency. Finally, the Ld. AR prayed before the Bench for condonation the delay in filing of this appeal.
3.1 After considering the submission of the Ld. AR and after hearing the Learned Departmental Representative (“Ld. DR”), the delay of 85 days in filing of this appeal is found to be covered by reasonable cause. Accordingly, we condone the delay of 85 days in filing of this appeal and the appeal is admitted for adjudication.
The brief facts of the case are that, the assessee is a trust registered u/s.12AB of the Act. The Ld. CIT(E), vide order dated 25.07.2024 passed u/s. 12AB(4) of the Act, cancelled the registration of the assessee, primarily on the ground of non-compliance and non- prosecution of proceedings initiated under the said section.
Aggrieved with the cancellation order of the Ld. CIT(E), the assessee has preferred the present appeal before us. The Ld. AR submitted that the cancellation order has been passed without giving proper and effective opportunity of being heard. The assessee had not received the notices issued by the Ld. CIT(E) during the cancellation proceedings. As such, the assessee could not appear or file requisite evidence/explanation in support of its continued eligibility u/s.12AB of the Act. It was also submitted that in the interest of natural justice, one more opportunity may be given to the assessee to appear before the Ld. CIT(E), file necessary supporting documents, and present its case on merits.
Per contra, the Ld. DR opposed the request for remand and submitted that sufficient opportunities had already been provided by the Ld. CIT(E) to the assessee, which were not availed.
We have heard the rival submissions and also gone through the record in the light of the submissions made on either side. From the impugned order of Ld. CIT(E), we found that the Ld. CIT(E) has cancelled the registration of the assessee granted u/s.12AB of the Act due to non-prosecution. It is also contended by the Ld. AR that, the notices of the Ld. CIT(E) was not received by the assessee. As the case may be, we found that the case of the assessee could not be decided on merits. In light of the above, and bearing in mind the principles of natural justice, we are of the considered view that the assessee deserves one more opportunity to be heard and to file necessary documentary support for continuation of its registration u/s. 12AB. Accordingly, we remand the matter to the file of the Ld. CIT(E) for de novo adjudication, after granting due and reasonable opportunity of being heard to the assessee. The assessee is also directed to extend full cooperation and not seek unnecessary adjournments.