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Facts
The assessee trust applied for regular registration under section 12AB and approval under section 80G. The CIT(Exemption) rejected the applications after issuing show cause notices, alleging non-compliance and lack of explanation. The assessee contended that the notices provided insufficient time, violating principles of natural justice.
Held
The Tribunal found that the CIT(Exemption) issued notices with less than a week for compliance, which is contrary to the Standard Operative Procedure (SOP) and violates principles of natural justice. Therefore, the Tribunal decided to remand the matters back to the CIT(Exemption) for fresh consideration.
Key Issues
Whether the CIT(Exemption) provided sufficient time for the assessee to respond to notices, adhering to principles of natural justice and SOPs.
Sections Cited
12AB(1)(b)(i), 80G, 12A(1)(ac), 17A(2), 12A, 142(1), 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)(b)(i) and approval u/s.80G of the Act respectively framed by CIT(Exemption), Pune evenly dated 17.08.2024.
Registry has informed that there is delay of 98 days in presenting the instant appeals before this Tribunal. Assessee has filed affidavit explaining the reasons which led to delay.
After hearing both the sides and perusing the averments made in the affidavit, 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 and 320/PUN/2025 Acharya Shri Anand Rishiji Jain Shraman Sanghiya Trust Kopergaon keeping in view the salutary principle governing the condonation of delay that the appellant does not gain anything in filing the appeal 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 98 days in filing the appeals and admit the appeals for adjudication.
ITA No.319/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) for grant of registration u/s.12AB of the Act on 13.02.2024. In order to verify the genuineness of activities of the appellant trust, the ld. CIT (Exemption) issued a notice dt. 01.05.2024 through ITBA portal calling upon the appellant trust to file certain information/clarification. The appellant trust responded to notice issued by ld. CIT(E) to the assessee on 12.06.2024. Thereafter, ld. CIT(Exemption) issued another notice dated 31.07.2024 pointing out certain discrepancies in the information so filed requiring the appellant trust to comply with the said notice on or before 07.08.2024. 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) : and 320/PUN/2025 Acharya Shri Anand Rishiji Jain Shraman Sanghiya Trust Kopergaon “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. Without prejudice to the above, it is seen that the trust has obtained provisional registration/approval in form 10AC under item (A) on 12/01/2024. However, it is seen that the trust's activities were commenced much before the said date. Therefore, said provisions of sec. 12A(1)(ac) (vi) (A) of the Act are not applicable to the assessee's case.
9. In view of the above, the application filed by the assessee is hereby rejected and the provisional registration granted on 12/01/2024 under Item (A) of sub-clause (vi) of clause (ac) of sub- section (1) of section 12A 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.
Before us, the ld. AR submitted that the notice given by the ld. CIT(Exemption) 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).
7. On the other hand, the ld. DR relying on the order of ld. CIT(Exemption) submitted that ld. CIT (Exemption) had rightly rejected the application filed by the appellant trust.
We heard the rival submissions and perused the relevant material on record. We find, in the present case, the assessee and 320/PUN/2025 Acharya Shri Anand Rishiji Jain Shraman Sanghiya Trust Kopergaon trust filed application in Form No.10AB dated 13.02.2024 seeking registration u/s.12A(1)(ac)(iii) of the Act. On perusal of the contents of para nos. 4 and 5 of the impugned order, it would reveal that show cause notice was issued to the appellant trust through ITBA portal on 31.07.2024 requesting the appellant trust to file explanation to the discrepancies pointed out in the said notice, on or before 07.08.2024. 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 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. Effective grounds of appeal raised are allowed for statistical purposes.
ITA No.320/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 and 320/PUN/2025 Acharya Shri Anand Rishiji Jain Shraman Sanghiya Trust Kopergaon 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. 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 03rd day of September, 2025.