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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: Ms SUCHITRA KAMBLE & SHRI MAKARAND V. MAHADEOKAR
PER MAKARAND V. MAHADEOKAR, AM: These two appeals by the assessee are directed against two separate orders passed by the Commissioner of Income Tax (Exemption), Ahmedabad [hereinafter referred to as “CIT(E)"], both arising from rejection of the assessee's applications, one for registration under section 12AB of the Income-tax Act, 1961 [hereinafter referred to as “the Act"] dated 17.08.2023, and the other for approval under section 80G(5) of the Act dated 24.08.2023. ITA Nos.1018-1019/Ahd/2025 Darul Ullom Fatimatuz-Zahra Vs. CIT(E)
Assessment Year N.A 2 As common facts and issues are involved, both appeals were heard together and are being disposed of by way of this consolidated order. Condonation of Delay
At the outset, it is noted that there is a delay of 554 days in filing both appeals before the Tribunal. The assessee has filed sworn affidavits of the trustee explaining the reasons for such delay, stating inter alia that due to lack of technical knowledge, the trustees relied upon a part-time accountant-cum-clerk to attend to the statutory compliances. The said person, however, failed to seek professional advice, did not respond to the notices of the CIT(E), and misguided the trustees by stating that no appeal was necessary. It was only upon persistent follow-up that the trustees learnt about the default, whereafter immediate steps were taken to engage a Chartered Accountant and file the appeals. It has been asserted that the delay is neither deliberate nor intentional and that no benefit has accrued to the assessee thereby.
The learned Departmental Representative, when queried, did not raise any objection to the condonation of delay.
We note that the Hon'ble Supreme Court in Collector, Land Acquisition v. Mst. Katiji (167 ITR 471) has laid down that substantial justice should prevail over technical considerations and that when there is no mala fide intention or deliberate delay, a liberal approach is warranted in condoning delay. In the present case, the explanation is supported by affidavits and corroborated by the sequence of events. The assessee's lapse was attributable to circumstances beyond its effective control and has been ITA Nos.1018-1019/Ahd/2025 Darul Ullom Fatimatuz-Zahra Vs. CIT(E)
Assessment Year N.A 3 promptly rectified upon discovery. The Revenue has not shown any prejudice that would be caused by condoning the delay. In these circumstances and applying the ratio of the above decision as well as other judicial precedents favouring a pragmatic approach, we hold that the delay deserves to be condoned.
Accordingly, we condone the delay of 554 days in filing both appeals and proceed to decide the matters on merits. Facts of the Case
The assessee trust was incorporated on 15.09.2022 under the Bombay Public Trust Act, 1950. It applied for provisional registration under section 12AB in Form 10AC on 03.01.2023, which was granted on 19.01.2023. Subsequently, on 20.02.2023, the assessee applied for final registration in Form 10AB under section 12A(1)(ac)(iii). The CIT(E) issued notices dated 11.07.2023 and 04.08.2023 calling for specific details including a note on activities and other supporting documents as per Rule 17A(2). According to the CIT(E), no response was furnished.
The CIT(E) observed that as per section 12AB, before granting registration, the Commissioner must be satisfied about the genuineness of activities and their consonance with the objects of the trust. Relying on the judgments of the Hon'ble Supreme Court in CIT v. Dawoodi Bohra Jamat and New Noble Educational Society (Civil Appeal No. 2492 of 2024), the CIT(E) held that in absence of the requisite documents, genuineness could not be verified. Accordingly, the application for registration was rejected and the provisional registration was cancelled. ITA Nos.1018-1019/Ahd/2025 Darul Ullom Fatimatuz-Zahra Vs. CIT(E)
Assessment Year N.A 4
The assessee had also applied for approval under section 80G(5) in Form 10AB on 20.02.2023. The CIT(E) noted that the application for registration u/s 12AB had already been rejected on 17.08.2023. Referring to the decision of the Hon'ble Gujarat High Court in CIT (Exemptions) v. Shree Tapeshwar Hanumanji Bajrang Charity Trust [122 taxmann.com 98], the CIT(E) held that valid registration u/s 12AB is a pre-requisite for grant of approval u/s 80G. As the assessee did not possess such registration, the CIT(E) rejected the 80G application without examining it on merits.
Aggrieved by the orders of CIT(E), the assessee is in appeal before us raising following ground before us: IN ITA No.1018/Ahd/2025
Learned CIT (Exemption) erred in law and facts by making the order by rejecting the application filed in form 10AB for registration u/s 12A(1)ac(iii) of the act for not producing documents required by the authority.
Due to noncompliance by the side of Accountant, documents are pending to produce against the notice issued by the authority and not submitted appeal within stipulated time against rejection order, hence we will require permission for condonation of delay in filing appeal.
Appellant craves to add, alter or delete any grounds either before or in the course of hearing of the appeal IN ITA No.1019/Ahd/2025
Learned CIT (Exemption) erred in law and facts by making the order by rejecting the application filed in form 10AB for registration u/s 80G(5) of the IT act for not producing documents required by the authority.
Due to noncompliance by the side of Accountant, documents are pending to produce against the notice issued by the authority and not submitted appeal ITA Nos.1018-1019/Ahd/2025 Darul Ullom Fatimatuz-Zahra Vs. CIT(E)
Assessment Year N.A 5 within stipulated time against rejection order, hence we will require permission for condonation of delay in filing appeal.
Appellant craves to add, alter or delete any grounds either before or in the course of hearing of the appeal
During the course of hearing before us the learned Authorised Representative (AR) of the assessee reiterated the facts stated in the affidavits and condonation petitions, explaining the circumstances leading to the delay. It was submitted that the assessee's activities have since commenced in furtherance of its stated charitable objects. Copies of audited financial statements for the years ended 31.03.2023 and 31.03.2024 were filed, along with ledger extracts evidencing various charitable expenses and details of donations received. It was contended that the rejections by the CIT(E) were purely on account of alleged non-furnishing of certain details and not on any adverse finding on merits. The AR emphasised that adequate opportunity was not granted and prayed that both orders be set aside and the matters restored to the file of the CIT(E) for fresh adjudication on merits after affording due opportunity to the assessee.
The learned Departmental Representative supported the orders of the CIT(E) but, on a query from the Bench, did not object to the proposal of remanding the matters to the file of the CIT(E) for fresh consideration. We have carefully considered the rival submissions and perused the material available on record. In respect of the application u/s 12AB, we note that the CIT(E) rejected the registration on the ground of non-furnishing of certain details called for under Rule 17A(2). The assessee has now placed on record the audited accounts, ledger extracts, and details of donations, which are relevant to examine the genuineness of its activities. In our considered ITA Nos.1018-1019/Ahd/2025 Darul Ullom Fatimatuz-Zahra Vs. CIT(E)
Assessment Year N.A 6 view, the ends of justice would be met if the matter is restored to the CIT(E) to examine the evidences and decide the application afresh in accordance with law after granting adequate opportunity to the assessee.
As regards the application u/s 80G, the CIT(E) has rejected it solely on the ground that the assessee did not have valid registration u/s 12AB. Since we are setting aside the order rejecting the application u/s 12AB, the fate of the 80G application would also depend upon the outcome of the registration proceedings. Therefore, in the interest of justice, the 80G application also deserves to be restored to the file of the CIT(E) for fresh decision in accordance with law.
In view of the above, we set aside both impugned orders dated 17.08.2023 and 24.08.2023 passed by the CIT(E), Ahmedabad, and restore the matters to his file for fresh adjudication on merits after affording due opportunity of being heard to the assessee. The assessee is directed to promptly furnish all requisite documents and evidences in support of its claim.
In the combined result, both appeals are allowed for statistical purposes. Order pronounced in the Open Court on 19th August, 2025 at Ahmedabad. (SUCHITRA KAMBLE) JUDICIAL MEMBER Ahmedabad, Dated 19/08/2025 Manish, Sr. PS (MAKARAND V.MAHADEOKAR) ACCOUNTANT MEMBER ITA Nos.1018-1019/Ahd/2025 Darul Ullom Fatimatuz-Zahra Vs. CIT(E)
Assessment Year N.A 7 आदेश की प्रतिलिपि अग्रेषित/