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Facts
The assessee, a charitable trust, applied for registration under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961. The CIT(E) denied registration due to non-compliance and lack of satisfaction regarding the genuineness of activities. The assessee cited health issues of a managing trustee as the reason for non-compliance.
Held
The Tribunal noted the delay in filing the appeal and the reasons provided by the assessee, but was not convinced by the explanation for non-compliance before the CIT(E). While allowing the appeal for statistical purposes, the Tribunal imposed a cost of Rs. 5,000 on the assessee.
Key Issues
Whether the CIT(E) was justified in denying registration due to non-compliance, and whether the assessee's explanation for non-compliance was acceptable.
Sections Cited
12A(1)(ac)(iii), 12A
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Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH
Before: Ms. Suchitra Kamble, & And Shri Narendra Prasad Sinha
आदेश/ORDER Per: Narendra Prasad Sinha, Accountant Member: -
This appeal is filed by the Assessee as against the order dated 13.11.2024 passed by the Commissioner of Income Tax (Exemption), (in short ‘the CIT(E)’) Ahmedabad denying registration under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
Page No 2 Kunthunath Jain Dehrasar vs. CIT(E)
There was a delay of 28 days in filing of this appeal. The assessee has filed an affidavit explaining the reason for delay. It is submitted that the delay was due to medical illness of Sh. Ashvin Ashok Chandra Shah, Trustee & Treasurer of the assessee trust, who was suffering from Ischemic Heart Diseases. He was under medical treatment during the concerned period and a copy of the medical certificate is also enclosed with the affidavit. Considering the explanation of the assessee, the delay in filing the appeal is condoned.
The assessee has taken the following grounds in this appeal:
1. The Learned Commissioner of Income Tax (Exemptions) [CIT(E)] erred in law and on facts in rejecting the application for registration under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961, without properly appreciating the facts and law of the case.
2. The main Managing Trustees, who handles the normal routine matters, has been suffering from health issues, including heart surgery, and due to age-related issues, there was a delay in the filing of the appeal and responding to notices issued by the Office.
3. The appellant craves liberty to add, amend, or alter any or all of the grounds of appeal on or before the date of hearing.”
Brief facts of the case is that the assessee is a charitable Trust and had filed registration application u/s 12A(1)(ac)(iii) of the Act in Form 10AB along with supporting documents. The Ld. CIT(E) issued hearing notice on 04/09/2024 and on 24/10/2024 via email to furnish certain details/documents for granting registration. The assessee neither filed any submissions nor sought for any adjournments. Therefore, Ld. CIT(E) denied registration u/s. 12A of the Act, as he was not satisfied about genuineness of the activities Page No 3 Kunthunath Jain Dehrasar vs. CIT(E) of the trust and that the activities of the trust were in consonance with the objects of the trust.
Sh. Manish Shah, the Ld. AR of the assessee submitted that the main managing trustee, who handles the normal routine matter was suffering from age-related health issues, hence no compliance could be made before the ld. CIT(E). He explained that an adjournment was sought on the first occasion but thereafter no compliance could be made by the assessee. The Ld. AR submitted that the assessee trust is prepared to file all required documents before Ld. CIT(E) for registration and, therefore, requested to set aside the matter back to the file of Ld. CIT(E) for allowing another opportunity to the assessee.
Per contra, the Ld. CIT-DR supported the order of the Ld. CIT(E). He, however, had no objection if the matter was set aside to the Ld. CIT(E) for allowing another opportunity to the assessee.
We have considered the submissions of the assessee. We are not convinced with the explanation of the assessee for the non- compliance before the Ld. CIT(E). The assessee had made an adjournment request on 18th September, 2024 and was thus aware of the proceedings before the CIT(E) and also about the details and documents as sought by him. Under the circumstances, no explanation has been given as to why compliance was not made before him on subsequent date. No explanation has forthcome for the non-compliance before the CIT(E) after the adjournment application of the assessee. Therefore, we deem it proper to impose Page No 4 Kunthunath Jain Dehrasar vs. CIT(E) a cost of Rs. 5,000/- on the assessee, payable to the Prime Minister National Relief Fund within two weeks from the date of receipt of copy of this order. On production of receipt for payment of the cost, the Ld. CIT(E) is directed to give one more opportunity of hearing to the assessee for registration u/s 12A(1)(ac)(iii) of the Act in accordance with the provisions of law. The assessee is also directed to comply before the Ld. CIT(E) in the course of set aside proceeding and not to seek adjournment without any pressing reason.
In the result, the appeal filed by the Assessee is allowed for statistical purpose. Order pronounced in the open court on 18-06-2025 Sd/- Sd/- (SUCHITRA KAMBLE) (NARENDRA PRASAD SINHA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad : Dated 18/06/2025 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद