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Facts
The assessee, Pradnyashraman Digambar Jainacharya Devnandi Trust, filed an appeal against the CIT(E)'s order denying its application for regular registration under Section 12A(1)(ac) of the Income Tax Act. The appeal was filed with a significant delay of 649 days, attributed to the trustees' lack of awareness about legal provisions and notices, and miscommunication regarding official emails.
Held
The Tribunal condoned the 649-day delay, accepting the explanation as a 'reasonable cause'. On merits, it noted that the CIT(E) rejected the application due to the assessee's failure to respond to notices. Consequently, the Tribunal remitted the issue back to the CIT(E) for fresh adjudication, instructing to provide the assessee a reasonable opportunity of hearing.
Key Issues
Condonation of significant delay in filing an appeal; rejection of application for registration under Section 12A(1)(ac) due to non-compliance with notices.
Sections Cited
12A(1)(ac), 12A, 12AB(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 appeal at the instance of assessee is directed against the order dated 03.03.2023 framed by ld.CIT (Exemption), Pune denying grant of regular registration u/s.12A(1)(ac) of the Act.
2. When the appeal was called for, none appeared on behalf of the assessee despite due service of notice of hearing. We therefore proceed to dispose of the appeal with the assistance of ld. Departmental Representative.
3. Registry has informed that there is delay of 649 days in filing the appeal before this Tribunal. Affidavit for condonation of delay has been filed by the assessee explaining the reasons which led to delay in filing the appeal and the same read as under :
“1. The appellant is a Trust established to maintain and propagate traditions, to provide necessary facilities for all the religious activities and rituals like worship, prayer, religious festivals and to impart literary, cultural and intellectual knowledge of Jainism, etc.
The appellate trust was formed to achieve all the aforementioned objectives through emergence of a Tirth place in the name of Namokar Tirth at village Malsane, Tal: Chandwad, Dist: Nashik, Maharashtra. The said Tirth was built as per the directions of Gurudev Acharya Shree Devnandiji, where we strive for great confluence of devotion, education and service along with a golden triangle of Faith, Discipline and Care for all.
Myself undersigned, the President of the Trust, resides in Marvadi Galli, Mahavir Path, Usmanabad, Maharashtra, which is approximately 408 kilometers away from the Namokar Tirth. As a result, it becomes challenging for me to oversee and manage all matters pertaining to the Trust. Consequently, the management and administration of the Appellant Trust are entrusted to various Trustees, who are from the different regions of the State of Maharashtra.
4. The trustees of the appellant Trust are small businessman and do not know the intrinsic provisions of law.
5. The email id registered with the Income Tax Portal for the Appellant Trust is pawanp77@gmail.com. This email id belongs to Mr. Pawan Patni, a resident of Nashik and one of the Trustees of the Appellant Trust. Given that Mr. Pawan Patni is a local resident, his email address was provided for correspondence to facilitate prompt and efficient communication.
6. The notices issued u/s 12A(1)(ac)(iii) dated 26/12/2022 and 18/01/2023 were issued and served on mail to pawanp77@gmail.com. Mr. Pawan Patni, on being receipt of the mails containing abovementioned notices, forwarded the same to his tax consultant under the premise that the notices were received from Income-tax Department and the said notices must be in respect of his personal tax matters. He did not understand that the notices were related to abovementioned trust and therefore he did not inform about the said notices to other trustees.
It appears that the CIT(E) has passed the order rejecting the application for grant of registration u/s 12A on 03/03/2023. The said order passed u/s. 12AB(1) was also mailed by the Revenue to pawanp77@gmail.com and again Mr. Pawan Patni did not inform the trust or other trustees regarding the receipt of such order for the reason as mentioned hereinabove. Unfortunately, the tax consultant also did not intimate Mr. Pawan Patni that the said notices as well as order is not related to his domain of services.
I came to know about notices and order passed by CIT(E) against the appellant trust when I requested CA Dinesh Jain to apprise us about the status of tax matters. I took immediate steps for filing the appeal to Hon'ble Income Tax Appellate Tribunal, Pune.
The delay in filing the present appeal is because of the fact that the appellant trust and I was not having any knowledge about the order passed by CIT(E) against the appellant trust and the present appeal is filed by us immediately upon getting the knowledge about the passing the order by CIT(E) against us.
I have filed an appeal to ITAT, Pune against the order of CIT(E) for A.Y. 2023-24. The appeal number allotted by ITAT is ITA 678/PUN/2025. 11. There is delay in filing the appeal to Hon'ble ITAT, Pune. The order of CIT(E) was passed on 03/03/2023 for assessment year 2023-24. Therefore, the appeal against the said order of CIT(E) was required to be filed within 60 days i.e. by 02/05/2023. However, the abovementioned appeal was filed on 10/03/2025 i.e. after delay of 649 days. 12. The abovementioned delay in filing of appeal has happened because the appellant trust was not aware about the notices and order rejecting the registration application being issued to us. The delay in filling of present appeal was not at all intentional nor is it because of any negligence. The said delay was because my dependency on others and lack of relevant knowledge as well scattered places of the trustees across Maharashtra.”
We have heard the ld. Departmental Representative and gone through the averments made in the affidavit. Hon’ble courts in plethora of judgments observed that when consideration of an appeal on merits is pitted against the rejection of a meritorious claim on the technical ground of the bar of limitation, the Courts lean towards consideration on merits by adopting a liberal approach towards ‘sufficient cause’ to condone the delay. The Court considering an application under section 5 of the Limitation Act may also look into the prima facie merits of an appeal. A liberal approach may be adopted when some plausible cause for delay is shown. Hon’ble Supreme Court in the case of Inder Singh Vs. State of Madhya Pradesh judgment dated 21.03.2025 (2025 INSC 382) condoned delay of 1537 days sub- serving the cause of justice. It was held so while observing that the appeal filed by the appellant with a delay was unintentional, much less due to any deliberate laches, and was well-explained by the State before the High Court. Hon’ble Court further held that in cases where the merits are significant, a more liberal approach may be adopted to allow for the examination of the case on its merits. Having gone through the averments made in the affidavit and considering the ratio laid down by the Hon’ble Court in the case of Inder Singh (supra), we are of the view that there was ‘reasonable cause’ which prevented the assessee in filing the appeal within the stipulated time. We therefore condone the delay of 649 days and admit the appeal for adjudication.
On merits of the case, with the assistance of ld. Departmental Representative, we on perusal of the impugned order find that assessee’s application for regular registration u/s.12A(1)(ac) of the Act filed on Form No.10AB on 04.09.2022 has been rejected because the assessee failed to respond to the notices given by ld.CIT(E) despite giving sufficient opportunities and the assessee also failed to furnish the details called for to verify the genuineness of the activities of the trust/institution. Ld. DR has no objection if the issues are remitted back to the file of ld.CIT(E) for afresh adjudication. We therefore taking a liberal approach and in the larger interest of justice deem it proper to restore the issue raised on merit to the file of ld.CIT(E) for afresh adjudication. Needless to say that ld.CIT(E) shall afford reasonable opportunity of hearing to the assessee and after considering the submissions of the assessee pass a speaking order in accordance with law. Assessee is directed to provide latest email id and contact detail to the department for receiving the notices from ITBA portal. Assessee is also directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause. Impugned order is set aside and the effective grounds of appeal raised by the assessee are allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced on this 06th day of June, 2025.