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Facts
The assessee filed applications for regular registration under section 12AB(1)(ac)(iii) and approval under section 80G. The CIT(Exemption) rejected these applications after issuing notices that provided insufficient time for the assessee to respond, violating principles of natural justice.
Held
The Tribunal held that the assessee was not given reasonable time to respond to the notices, which violates principles of natural justice. Therefore, the appeals are remanded to the CIT(Exemption) for de novo consideration.
Key Issues
Whether the rejection of applications for registration and approval was justified when the assessee was not afforded reasonable time to respond to the notices issued by the CIT(Exemption).
Sections Cited
12AB, 12A(1)(ac), 80G(5)
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Income Tax Appellate Tribunal, PUNE BENCHES “A”, PUNE
Before: DR.MANISH BORAD & SHRI VINAY BHAMORE
आदेश / ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
The captioned appeals at the instance of appellant are against the rejection of applications for regular registration u/s.12AB(1)(ac)(iii) and approval u/s.80G of the Act respectively framed by CIT(Exemption), Pune evenly dated 14.09.2024.
When the cases called for, none appeared on behalf of the appellant despite due service of notice(s) of hearing. We therefore proceed to adjudicate the appeals with the assistance of ld. Departmental Representative.
Registry has informed that there is delay of 23 days in presenting the instant appeals before this Tribunal. Assessee has filed application(s) for condonation of delay explaining the reasons. Main reason was stated to be that the person looking after the affairs of the society was travelling for various workshops and graining in the months of September to November 2024.
On perusing the averments made in the condonation applications, we are satisfied that due to ‘reasonable cause’ assessee was prevented from filing the instant appeals within the stipulated time. We find that there is no material on record to disbelieve the explanation of the appellant trust and keeping in view the salutary principle governing the condonation of delay that the appellant does not gain anything in filing the appeals with delay, we are of the considered opinion that these are fit cases to condone the delay in light of judgments of Hon’ble Supreme Court in the case of Collector, Land Acquisition, Anantnag & Anr. Vs. Mst. Katiji & Ors. reported in (1987) 2 SCC 107 and in the case of Inder Singh Vs. State of Madhya Pradesh judgment dated 21.03.2025 (2025 INSC 382). We therefore condone the delay of 23 days in filing the appeals and admit the appeals for adjudication.
ITA No.2732/PUN/2024:
Briefly, the facts of the case are that the appellant is a trust, filed application on Form No.10AB under clause (iii) of section 12A(1)(ac) for grant of regular registration on 31.03.2024. In order to verify the genuineness of activities of the appellant trust, the ld. CIT (Exemption) issued a notice dt. 03.06.2024 through ITBA portal calling upon the appellant society to file certain information/clarification. The appellant trust responded to notice issued by ld. CIT(E). Thereafter, ld. CIT(Exemption) issued another notice dated 02.09.2024 pointing out certain discrepancies in the information so filed requiring the appellant trust to comply with the said notice on or before 09.09.2024. In response, the appellant trust had not furnished any explanation. In the circumstances, the ld. CIT(Exemption) rejected the application filed for grant of regular registration observing as under (relevant extract) :
“6. Since, the assessee has not furnished any explanation to the discrepancies communicated to it, it is presumed that the assessee has nothing to say in the matter.
Considering the above facts discussed in the show notice and discrepancies noticed and also that the assessee has not complied with the provisions of section 12AB(1)(b)(i) of the Income Tax Act, 1961 as well as the provisions of Rule 17A(2) of Income Tax Rules, 1962 in spite giving sufficient opportunities, the undersigned is unable to draw any satisfactory conclusion about the genuineness of activities of the assessee and compliance of requirements of any other law for the time being in force by the assessee as are material for the purpose of achieving its objects.
8. In view of the above, the application filed by the assessee is hereby rejected and the provisional registration granted on 24/03/2022 under section 12AB read with section 12A(1)(ac)(vi) of the of the Income Tax Act, 1961 is hereby cancelled.”
Being aggrieved, the appellant trust is in appeal before this Tribunal assailing the impugned order denying the grant of registration.
7. Ld. DR supported the order of ld. CIT(Exemption).
We have heard the ld. Departmental Representative and perused the relevant material on record. We find that, in the present case, the assessee trust filed application in Form No.10AB dated 31.03.2024 seeking registration u/s.12A(1)(ac)(iii) of the Act. A perusal of the contents of para nos. 4 and 5 of the impugned order, reveals that show cause notice was issued to the appellant trust through ITBA portal on 02.09.2024 requesting the appellant trust to file explanation to the discrepancies pointed out in the said notice, on or before 09.09.2024. Undisputedly, the time given to the appellant trust for compliance is less than a week, which is against the Standard Operative Procedure (‘SOP’) issued by the CBDT dated 19.11.2020, wherein, minimum period of 15 days is required to be given to the assessee to comply with notices. Hon’ble Delhi High Court in the case of Dauphin Travel Marketing Private Limited vs. ITO in W.P.(C) 8870/2023 & CM Nos.33516-17/2023 dated 05.07.2023 taking note of this SOP held that the grant of insufficient time to respond the notice violates the principles of natural justice and, therefore, set-aside the assessment. Thus, it is clear that the appellant trust was not given reasonable time to respond to the notice, which is against the principles of natural justice. In the light of the aforementioned facts, we are of the considered opinion that it is a fit case to remand the issues raised in the instant appeal to the file of ld. CIT (Exemption) for de novo consideration of application in accordance with law. Impugned order is set aside and effective grounds of appeal raised are allowed for statistical purposes.
ITA No.2731/PUN/2024 :
We find that similar approach was adopted by the ld. CIT(Exemption) while dealing with the application filed by the appellant trust on Form No.10AB for grant of approval u/s.80G(5) of the Act. Therefore, the appeal denying grant of approval is also remitted to the file of ld. CIT(Exemption) in the terms indicated above. Impugned order is also set aside and effective grounds of appeal raised are allowed for statistical purposes.
10. In the result, both the appeals filed by the appellant trust are allowed for statistical purposes.
Order pronounced on this 13th day of November, 2025.