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Facts
The assessee, a charitable trust, applied for regular registration under section 80G. The CIT(E) rejected the application because the assessee failed to respond to a notice issued through the ITBA portal. The assessee appealed with a significant delay, attributing it to confusion with the e-filing portal and issues with their tax consultant.
Held
The Tribunal condoned the delay, finding it to be unintentional and due to sufficient cause. The order of the CIT(E) was set aside, and the matter was restored to his file for fresh adjudication after providing the assessee one opportunity to be heard and submit necessary documents.
Key Issues
Whether the delay in filing the appeal was sufficiently explained and whether the CIT(E) erred in rejecting the application without providing a proper opportunity to be heard due to a technical error.
Sections Cited
80G, 250
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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
आयकर अपील सं. / Shri Akhil Bhartiya Samarth CIT (Exemption), Jain Shravak Sangh, Pune 10 Vardhaman Residency, Vs. Soygaon Malegaon, Nashik – 423203 PAN : AAMTS7620L अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Kishor B. Phadke Department by : Shri Amol Khairnar Date of hearing : 02-12-2024 Date of 28-01-2025 Pronouncement : आदेश / ORDER
PER ASTHA CHANDRA, JM :
The appeal filed by the assessee is directed against the order dated 27.11.2022 of the Ld. Commissioner of Income Tax (Exemption), Pune [“CIT(E)”] whereby he rejected the application of the assessee filed before him on 03.05.2022 in Form No. 10AB under clause (iii) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961 (the “Act”).
2. The assessee has filed this appeal with a delay of 432 days. The assessee has filed an application along with a sworn affidavit of the Managing Trustee seeking condonation of delay in filing of the appeal stating therein the reasons for delay as under : “A. Background:
1. 1. The appellant is a charitable trust registered under The Bombay Public Trust Act, 1950 on 31/07/2013 Appellant Trust is engaged in various charitable cum religious activities.
2. On 15/10/2001, appellant trust received the provisional registration certificate under section80G(5)(iv) of ITA, 1961.
3. Further, appellant trust applied for regular registration u/s 80G(5)(iii) of ITA, 1961 on 03/05/2022 by filing Form 10AB.
4. Subsequently healing notices were issued by the learned CIT(E) and said notices were unfortunately and unintentionally glossed over by the appellant being issued under the wrong TAB of issue letter.
2 5. Learned CITIE), Pune passed an order dated 27/11/2022 in Form IGAD rejecting the appellant's application for registration u/s 80G of ITA, 1961 on the contention that appellant trust failed to reply to notices issued by the learned CIT(E).
6. Aggrieved by the said order passed dated 27/11/2022, appellant has filed an appeal before MITAT, Pune bench. B. Computation of delay in filing appeal before the Hon'ble ITAT The appellant has filed the appeal before the Honorable ITAT, Pune Bench on 01/04/2024. In all this process, a delay of about 432 days has crept in. The said delay is computed as follows: Date of receipt of order - 28/11/2022 Last date for filing appeal before your good self - 25/01/2023 Date of filing appeal - 01/04/2024 -------------------- Delay in filing appeal - 432 days C. Reasons for delay in filing an appeal within stipulated timelines: 1. Multiple tabs on the E-filing portal lead to confusion It is submitted that the hearing notices issued by learned CIT(E) to the appellant for the purpose of requiring details were issued under the tab Issue Letter as against the relevant tab under which the said ought to have been received (i.e. Proceedings u/s 80G). For the sake of brevity, screenshot indicating the same is reproduced as follows:
Notice/ Communication Reference ID: 100051969643 Notice us ITBA/COM/F/17/2022 Description: [ITBA]Issue Letter submit Response -23/1045479607(1) Issued On: 14-Sep-2022 Notice/Letter.pdf Document reference ID Seek/View Adjournment Thus, due to the issuance of hearing notice under the tab issue letter, appellant unfortunately glossed over the said notice and unintentionally failed to comply with the said issue letter. Further, the notices and the impugned rejection order dated 27/11/2022 was sent on the email ID of the tax consultant bearing email ID cavnjain@gmail.com. However, the tax consultant neither made the necessary compliance nor informed the appellant about the receipt of notices / rejection order. Screenshot from the E-filing portal is reproduced as follows: Notice/Communication Reference ID Date From PUNE CIT.EXMP @INCOMETAX.GOV.IN 100001989643 To CC Subject [ITBA] Issue Letter cavmjain@gmail.com Dear SHRI AKHIL BHARTIYA SAMARTH JAIN SHRAVAK SANGH, Please find attached the Notice u/s for PAN AAMTS7620L and AY, 0 Plissé quote your PAN in all future correspondences. Note:
3 -This communication is computer generated and may not contain signature This communication may be treated as compliant with the requirements of Income Tax Rules 127 and 127A. Signed copy may be sent separately if not already digitally signed, -Please quote your PAN in all communications. Income Tax Department does not seek any taxpayer information like user name, password, details of ATM, credit cards, etc. Taxpayers are advised not to part with such information on the basis of emails. AAMTS7620L Issue Letter 1045479607(1) 14092022.pdf Download As such, the present appeal could not be filed within the requisite time. The said delay was unintentional.
First Time proceedings It is submitted, appellant was not subjected to any scrutiny / income tax proceedings in the past years and the current year was the first year of any income tax proceedings in his case. As such, the appellant was unaware of the procedures and compliances for the same. The appellant was in a state of confusion regarding the appropriate procedures and responses to be submitted before honorable ITAT, after the order passed dated 27/11/2022 passed against appellant. Thus, the appellant preferred to appoint a new tax consultant/counsel in order to comply with all procedures and responses to the dated 27/11/2022. In order to decide the future course of action w.r.t order u/s 250 of ITA, 1961, the appellant's major time was passed in searching for the new tax consultant. Thereafter the appellant appointed a tax consultant to process further with the requisite procedure who advised to immediately file an appeal against the order dated 27/11/2022. In this entire process, precious time to file appeal was unfortunately lost and delay of about 432 days has crept into the matter.
3. Appointment of new tax consultant: In order to comply with said order u/s 250 of ITA, 1961, the major time was passed in searching for the new tax consultant. However, the appellant consulted new tax counsel who advised to immediately file an appeal against the said order. Further, the tax consultant was informed to provide certain details/information for filing an appeal against the said order. Accordingly, the appellant was in the process of compiling and collecting details and information as requested by the tax consultant. Considering the same, the delay has crept into the filing of the present appeal.
Compiling and Exchange of Files: The appellant submits that substantial time has passed in the process of compiling and collecting details and information as requested by the tax consultant. Once the same has been complied with and collected, the appellant submitted the same to the tax consultant. The appellant tax consultant immediately took requisite action and compiled by filing the appeal. Hence, a delay of almost 432 days has crept into the filing of the present appeal.
4 However, in this entire process, precious time to file an appeal was unfortunately lost and a delay of about 432 days has crept into the matter. It is submitted that the delay in filing the appeal is purely unintentional.
5. Reliance on judicial precedents: Appellant is submitting that the said delay of 432 days is purely unintentional and because of bonafide reasons. Considering the same appellant wish to rely on the following judicial precedents where in delay in filling an appeal before honorable ITAT on account of bonafide reasons is condoned: Following are various judicial precedents: 1. N.Balakrishnan Vs. M. Krishnamurthy (1998) 7 SSC 123 It is axiomatic that condonation of delay is a matter of discretion of the court Section 5 of the Limitation Act does not say that such discretion can be exercised only if the delay is within a certain limit. Length of delay is no matter, acceptability of the explanation is the only criterion. Sometimes delay of the shortest range may be uncondonable due to want of acceptable explanation whereas in certain other cases delay of very long range can be condoned as the explanation thereof is satisfactory. Once the court accepts the explanation as sufficient it is the result of positive exercise of discretion and normally the superior court should not disturb such finding, much less in reversional jurisdiction, unless the exercise of discretion was on whole untenable grounds or arbitrary or perverse. But it is a different matter when the first cut refuses to condone the dela. In such cases, the superior cut would be free to consider the cause shown for the delay afresh and it is open to such superior court to come to its own finding even untrammeled by the conclusion of the lower court. ii. Collector, Land acquisition Vs. Mst Katiji (1987) 167 ITR 471/1987 taxman.com 1072(SC) When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non- deliberate delay. iii. Senior Bhosale Estate (HUF) v. Asst. CIT ([2019] 269 Taxman 472 (SC): "We submit that the expression sufficient cause must receive a liberal construction so as to advance substantial justice and generally delays in preferring the appeals are required to be condoned in interest of justice. A litigation does not stand to benefit by resorting to delay, therefore a justice- oriented approach is required by courts. In every case of delay there can be some lapses on the part of the litigant concerned, but that alone is not enough to shut the door against him. We further submit that refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. In matters of condonation of delay a highly pedantic approach should be eschewed and a justice-oriented approach should be adopted and a party should not be made to suffer on account of technicalities." D. Prayer: The appellant would like to humbly submit that the said delay in filing an appeal is purely unintentional and that there was no ulterior motive behind the non-adherence of stipulated timelines. The appellant deeply regrets the delay and resultant inconvenience caused. In this regard, considering the above-mentioned facts and reasons, the appellant requests to condone the said delay.”
5 2.1 After hearing both the sides and considering the factual and legal submissions of the assessee, we are of the view that the delay is not intentional or deliberate but attributable to the sufficient cause. We, therefore, condone the delay in filing of the appeal and proceed to decide the appeal.
Briefly stated, the facts of the case are that the assessee is a charitable trust registered under the Bombay Trust Act, 1950 since 2013. The assessee is engaged in various charitable cum religious activities. The assessee was granted the provisional registration certificate u/s 80G(5)(iv) of the Act on 15.10.2021. Subsequently, the assessee trust applied for regular registration by filing Form No. 10AB u/s 80G(5)(iii) of the Act on 03.05.2022. The Ld. CIT(E) issued notice through ITBA portal on 14.09.2022 requesting the assessee to upload certain other information / clarification in order to verify the genuineness of the activities of the trust and fulfillment of conditions specified in clauses (i) to (v) of section 80G(5) of the Act. The notice was duly served on the assessee through email/e- portal. However, the assessee failed to respond. The Ld. CIT(E) therefore rejected the application filed by the assessee by observing as under : “3. Thus, the assessee has failed to furnish the details called for under the provisions of sub-clause (a) of clause (ii) of second proviso to section 80G(5) of the Income Tax Act, 1961 to verify the genuineness of activities of the institution / fund and fulfillment of conditions laid down in clauses (i) to (v) of Section 80G(5) of the Act.
3.1 Even on perusal of the application in form No. 10AB, it is seen that the assessee has not submitted any satisfactory material including a note on activities before the undersigned.
3.2 As per the provisions of Rule 11AA(2)(h) of the Income Tax Rules, 1962, the application in Form No. 10AB shall be accompanied by note on activities giving details of activities of the assessee but the assessee failed to comply with those provisions. In absence of any such tangible material in respect of details and proof of activities being carried out, it is not possible to ascertain as to whether the activities are charitable and in line with the objects of the trust / institution.
3.3 Considering the above facts, it is clear that the assessee was given sufficient opportunities to comply, but he has not responded to the same. It seems that the assessee is not having any supporting documents / evidence to submit. The assessee has failed to comply with the provisions of sub- clause (a) of clause (ii) of second proviso to section 80G(5) of the Income Tax Act, 1961 as well as Rule 11AA(2) of the Income Tax Rules, 1962. Hence, the undersigned is unable to draw any satisfactory conclusion about genuineness of activities of the assessee and fulfillment of conditions laid down in clause (i) to (v) of section 80G(5) of the Act.”
6 4. Aggrieved, the assessee is in appeal before the Tribunal raising the following solitary ground of appeal : “
1. The Ld. Assessing Officer has erred in law and in fact in rejecting the application filed u/s section 80G(5) of the Act without providing an opportunity of being heard in the matter due to technical error.
2. The appellant craves leaves to add or amend any ground of appeal.”
The Ld. AR submitted that the notice(s) issued by the Ld. CIT(E) were unintentionally glossed over by the assessee being issued under the wrong TAB of issue letter. Referring to the issue letter and email placed on pages 47 and 48 of the paper book, the Ld. AR submitted that the notice w.r.t proceeding u/s 80G was issued to the Assessee through ITBA portal on 14th Sept. 2022 under the Subject "Issue Letter" and not under Proceedings issued for Approval u/s 80G(5) (iii) due to which it was neglected by the Assessee under the circumstances and no response was made. The notice was not issued under the description of 80G(5)(iii). The assessee has not received the email regarding the order issued under section 80G, which resulted in the reply to the notice not being submitted. He, therefore, prayed that the matter be set aside to the file of Ld. CIT(E) for fresh consideration of his application filed u/s 80G of the Act. He submitted that given an opportunity the assessee is in a position to file all the relevant documents/evidence to establish/ascertain the charitable activities carried out by the assessee trust and/or such other further information/documents as may be called upon in support of the application filed by the assessee.
The Ld. DR, on the other hand, objected to the above request of the Ld. AR arguing that the assessee has himself admitted that non- compliance to the notice(s) has occurred due to his own negligence in spite of adequate opportunity provided by the Ld. CIT(E) and therefore, he was fully justified in rejecting the application of the assessee.
We have heard the Ld. Representatives of the parties and perused the records. It is an undisputed fact that the non-compliance before the Ld. CIT(E) by the assessee has occurred due to the issuance of notice(s) of hearing by the Ld. CIT(E) under wrong TAB of issue letter, the detailed explanation of which has been offered by the assessee along with documentary evidence contained in pages 47 and 48 of the paper book. The Ld. AR has submitted that given an opportunity the assessee is in a 7 position to file the requisite details/documents to substantiate its application before the Ld. CIT(E).
On the facts and in the circumstances of the case enumerated above, we deem it fit in the interest of justice and fair play to set aside the order of Ld. CIT(E) and restore the matter back to his file for adjudication afresh after allowing one opportunity of being heard to the assessee who shall provide the requisite support in terms of submitting the relevant documents/evidence as may be required/called upon on the appointed date without seeking any adjournment under any pretext, failing which the Ld. CIT(E) shall be at liberty to pass appropriate order as per fact and law. We order accordingly.
In the result, the appeal of assessee is allowed for statistical purpose.