SHREE VARAD VINAYAK HOSPITAL AND HEALTHCARE FOUNDATION,PUNE vs. CIT EXEMPTION, PUNE

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ITA 4/PUN/2025Status: DisposedITAT Pune08 April 2025Bench: Dr. MANISH BORAD (Accountant Member), SHRI VINAY BHAMORE (Judicial Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal, noting the assessee's unfamiliarity with technical proceedings and legal counsel search. It also found that the CIT(E) had provided an unreasonably short period for compliance, violating principles of natural justice.

What were the facts?

The assessee's appeal was filed against an order of the CIT(E) rejecting its application for registration under Section 12AA. The appeal was significantly time-barred by 216 days, and the CIT(E) had also issued a notice with a very short compliance period, leading to the rejection of the application.

What were the issues?

Whether the CIT(E) provided adequate opportunity for hearing and compliance to the assessee before rejecting the registration application, and if the delay in filing the appeal should be condoned.

Which sections of the Income-tax Act were involved?

Section 12AA,Section 12A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, B BENCH, PUNE

Before: Dr. MANISH BORAD & SHRI VINAY BHAMORE

For Appellant: Shri Abhay Shastri
For Respondent: Shri Ajay Kumar
Hearing: 08.04.2025Pronounced: 22.04.2025

Assessee by : Shri Abhay Shastri Revenue by : Shri Ajay Kumar Keshari- CIT Date of hearing : 08.04.2025 Date of pronouncement : 22.04.2025 आदेश/ORDER

PER DR. MANISH BORAD, ACCOUNTANT MEMBER :

1.

This appeal at the instance of the assessee is directed against the order of Ld. CIT Exemption u/s 12AA of the Income- tax Act, 1961 dated 11.03.2024.

2.

Registry has informed that the instant appeal is time barred by 216 days. Affidavit alongwith application for condonation of delay has been filed. Ld. DR opposed the condonation stating that no plausible reason has been stated. We after hearing both the sides observe that the delay was on account of lack of familiarity of assessee with technical and E proceedings, medical issue faced by the Managing Trustee and time taken for searching of the counsel for filing of the appeal. We therefore condone the delay finding it to be for a reasonable cause and admit the appeal for adjudication.

3.

Assessee has raised following grounds of appeal:-

1. The Learned CIT(E) erred in rejecting the application under Section 12AA solely on limitation grounds, disregarding the merits of the case.

2. The Learned CIT(E) failed to provide adequate opportunity for the appellant to present evidence demonstrating the genuineness of charitable activities and compliance with Section 12A provisions violating the principles of natural justice.

3. The Learned CIT(E) disregarded the welfare-oriented intent of the Income Tax Act, 1961, and the purpose of Section 12A, which is to promote charitable activities benefiting society. 4. The Learned CIT(E)'s decision conflicts with the Directive Principles of State Policy within the Constitution of India. These principles highlight the legislative intent to support charitable trusts for the public good. 5. The Learned CIT(E) issued notice on 29.02.2024 requesting the appellant to file explanation to the above notice, on or before 07.03.2024. Undisputedly, the time given to the appellant 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 from the date of issue of the notice. Recently, the 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 was given unreasonably very short period of time to respond to the notice, which is against the principles of natural justice. 6. The above grounds of appeal may kindly be allowed to be amended, altered, modified etc in the interest of natural justice.

4.

Assessee has raised grounds of appeal challenging the impugned order through which Ld. CIT(E) has rejected the application filed by the assessee for registration u/s 12A of the Act.

5. At the outset Ld. counsel for the assessee submitted that little time of only 7 days was given to make compliance to the notice requiring many details called for by CIT(E). Prayer made to provide one more opportunity to go before Ld. CIT(E) for doing the needful on merits of the case.

6.

Per contra Ld. DR supported the impugned order.

7.

We have heard rival contentions and perused the record placed before us. Assessee is aggrieved with the finding of the Ld. CIT(E) rejecting the application for permanent registration and also cancelling the application for provisional registration. We have gone through the impugned order and find that notice dated 07.03.2024 was served through E-Portal but in the meantime when the assessee could furnish the details, the impugned order was passed on 11.03.2024 i.e. within 4 days of the issue of notice dated 07.03.2024. In these circumstances we find that assessee has been deprived of proper and reasonable opportunity of hearing and therefore in the interest of justice and being fair to both the parties, we reversed the impugned order and set aside the issue to the file of Ld. CIT(E) for afresh adjudication and to decide in accordance with law after duly providing fair opportunity of hearing to the assessee. Assessee is also directed to remain vigilant and not to take unnecessary adjournment. Effective Grounds of appeal raised by the assessee are allowed for statistical purposes.

8.

In the result appeal of the assessee is allowed for statistical purposes.

Order pronounced on this 22nd day of April, 2025.

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