AAREEV FOUNDATION,VADODARA vs. CIT(E), AHEMDABAD

That in view of the foregoing, the rejection of the final registration under Section 12AB is unjustified and liable to be set aside.

On consideration of the explanation and the supporting material, we find that the cause shown by the assessee constitutes a sufficient cause within the meaning of section 253(5) of the Act. The Hon’ble Supreme Court in Aareev Foundation vs. CIT(E) Asst.Year –2023-24 - 3– Collector, Land Acquisition v. Mst. Katiji & Others (1987) 167 ITR 471 (SC) has laid down that a liberal and justice-oriented approach must be adopted while considering applications for condonation of delay, and that substantial justice deserves to prevail over technical considerations. The Hon’ble Supreme Court in N. Balakrishnan v. M. Krishnamurthy (1998) 7 SCC 123 has held that length of delay is not material and that acceptability of the explanation is the only relevant criterion. Further, in Improvement Trust, Ludhiana v. Ujagar Singh (2010) 6 SCC 786, it was reiterated that when there is no allegation of mala fides or dilatory tactics, courts must adopt a pragmatic and liberal view toward condonation.

In the present case, we are of the considered view that the assessee has demonstrated that the failure to file the appeal in time occurred solely due to non-communication of the impugned order by the Department, and as soon as the assessee came to know of the rejection through online verification, immediate steps were taken to file the appeal. There is nothing on record to suggest that the delay was deliberate, intentional, or aimed at gaining any undue advantage. On the contrary, refusal to condone the delay would result in grave injustice and deprive the assessee of an opportunity to have its claim adjudicated on merits, which would be contrary to the ratio laid down by the Hon’ble Supreme Court in Collector, Land Acquisition v. Katiji (supra), where it has been observed that a litigant ordinarily does not stand to benefit by lodging an appeal late.

In view of the totality of circumstances, and respectfully following the judicial pronouncements of the Hon’ble Supreme Court cited above, we are satisfied that the assessee has shown sufficient and reasonable cause for the Aareev Foundation vs. CIT(E) Asst.Year –2023-24 - 4– delay. Accordingly, in exercise of the powers vested in this Tribunal under section 253(5) of the Income-tax Act, 1961, the delay of 455 days in filing the present appeal is hereby condoned. The appeal is admitted for hearing on merits.

The assessee is in appeal before us against the order passed by the CIT(Exemptions) dismissing the application of the assessee.

We have heard the rival contentions and perused the record. The assessee has contended that it has been carrying out genuine charitable activities and that the failure to file complete documents before the CIT(E) occurred due to bona fide reasons. The assessee further submits that the rejection was made without granting a fair and effective opportunity of being heard and that it is now ready to furnish all required documents including detailed activity reports, bank statements, audited accounts, and other supporting evidence. We find that the CIT(E) rejected the application solely due to non-furnishing of documents and without examining the merits of the charitable activities already undertaken. The Hon’ble Supreme Court in Ananda Social and Educational Trust v. CIT (2020) 426 ITR 340 (SC) has held that registration under section 12AA (now 12AB) cannot be denied merely because activities have newly commenced or initial evidence is limited; what is required is prima facie satisfaction of charitable objects and genuineness. Similarly, in CIT v. Red Rose School (2007) 163 Taxman 19 (All), it has been held that the Commissioner must adopt a fair, reasonable, and objective approach while examining applications for registration.

In the light of these authoritative decisions and considering the assessee’s grounds of appeal and willingness to furnish complete Aareev Foundation vs. CIT(E) Asst.Year –2023-24 - 6– documentation, we are of the view that the matter requires fresh examination. The satisfaction contemplated under section 12AB regarding genuineness of activities and compliance with objects requires proper scrutiny of the documents which the assessee now undertakes to produce. Accordingly, the matter is restored to the file of the CIT(Exemptions) for de-novo consideration. The CIT(Exemptions) shall grant adequate opportunity to the assessee to furnish all relevant documents, including audited accounts, activity reports, bank statements, details of charitable programmes, and any other evidence necessary for verifying the genuineness of its activities. The assessee is directed to cooperate fully and provide all requisite information. The CIT(Exemptions) shall thereafter pass a fresh order in accordance with law and judicial principles discussed above.

In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 17/11/2025