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Facts
The assessee filed applications for regular registration under Section 12AB and approval under Section 80G. The CIT(Exemption) rejected these applications, citing non-compliance and lack of furnishing details regarding discrepancies. The assessee contended that the time given to respond to the notices was insufficient, violating principles of natural justice.
Held
The Tribunal found that the CIT(Exemption) did not provide adequate time to the assessee to respond to the notices, which violated the principles of natural justice. Consequently, the appeals were allowed, and the matters were remanded to the CIT(Exemption) for fresh consideration.
Key Issues
Whether the CIT(Exemption) provided sufficient time to the assessee to respond to notices, and if not, whether the rejection of the application for registration/approval was justified.
Sections Cited
12AB, 80G, 12A, 142(1)
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Income Tax Appellate Tribunal, PUNE BENCHES “B”, 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 filed for regular registration u/s.12AB(1)(ac)(iii) and approval u/s.80G(5)(iii) of the Act respectively framed by CIT(Exemption), Pune dated 22.10.2024 and 07.12.2024 respectively.
Registry has informed that there is delay of 223 days and 164 days in presenting the instant appeals before this Tribunal. Assessee has filed Applications for condonation of delay explaining the reasons which led to delay.
After hearing both the sides and perusing the averments made in the condonation applications, we are satisfied that due to ‘reasonable cause’ assessee prevented the assessee in filing the instant appeals within the stipulated time. We find the delay in filing the appeals is not intentional and assessee would not have gained by delaying the filing of appeal. We therefore taking justice oriented approach and following the 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). condone the delay in filing the appeals before this Tribunal and admit the appeals for adjudication.
ITA No.1922/PUN/2025 :
Briefly, the facts of the case are that the appellant is a trust, filed application in Form No.10AB under clause (iii) of section 12A(1)(ac)(iii) for grant of registration u/s.12AB of the Act on 29.05.2024. In order to verify the genuineness of activities of the appellant trust, the ld. CIT (Exemption) issued a notice dt. 25.06.2024 through ITBA portal calling upon the appellant trust to file certain information/clarification. The appellant trust responded to notice issued by ld. CIT(E) by filing certain details. Thereafter, ld. CIT(Exemption) issued another notice dated 04.10.2024 pointing out certain discrepancies in the information so filed requiring the appellant trust to comply with the said notice on or before 11.10.2024. In response, the appellant trust had not furnished any details. 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 08/02/2022 under section 12AB read with section 12A(1)(ac)(vi) 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 regular registration.
Before us, the ld. AR submitted that the assessee could not furnish details to the second notice given by the ld. CIT(Exemption). The time for compliance is less than 15 days which falls short of legal requirement of atleast giving 15 days time to respond to the notice. Therefore, in the interest of justice, prayed for remanding the matter to the file of ld.CIT(Exemption) for furnishing the requisite details.
7. On the other hand, the ld. DR relied on the order of ld. CIT(Exemption).
We heard the rival submissions and perused the relevant material on record. We find, in the present case, the assessee trust filed application in Form No.10AB dated 29.05.2024 seeking registration u/s.12A(1)(ac)(iii) of the Act. Assessee made partial compliance to the first notice issued by ld.CIT(E), however, failed to comply with the second notice issued by ld.CIT(E). On perusal of the contents of para nos. 4 and 5 of the impugned order, reveal that notice 04.10.2024 was issued to the appellant trust through ITBA portal requesting the appellant trust to file explanation to the discrepancies pointed out in the said notice, on or before 11.10.2024. 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 u/s 142(1) from the date of issue of the notice. 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 set aside the impugned findings and remand the issues raised in the instant appeal to the file of ld. CIT (Exemption) for de novo consideration of application filed for getting final registration u/s.12A r.w.r.t 12AB of the Act in accordance with law. Effective grounds of appeal raised are allowed for statistical purposes.
ITA No.1923/PUN/2025 :
We find that similar approach was adopted by the ld. CIT(Exemption) while dealing with the application filed by the appellant trust in Form No.10AB for grant of approval u/s.80G(5) of the Act. Since we have remitted the issue of regular registration u/s.12A of the Act to ld.CIT(E), therefore, the issue of granting approval u/s.80G is also remitted to the file of ld. CIT(Exemption) for afresh adjudication as per the terms indicated above. 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 27th day of October, 2025.