PRATIK MEDICAL EDUCATION & CHARITABLE TRUST,SURAT vs. THE CIT (EXEMPTION), AHMEDABAD

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ITA 276/AHD/2025Status: DisposedITAT Ahmedabad26 May 20253 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay of 95 days in filing the appeal, finding no perceptible prejudice to the revenue. The Tribunal restored the matter to the file of the CIT(Exemptions) for de-novo consideration in the interest of justice. The Tribunal clarified that if the assessee fails to comply before the CIT(Exemptions) in the de-novo proceedings, the CIT(E) would be at liberty to pass appropriate orders based on the available material. The Tribunal did not decide the substantive issues raised in the grounds of appeal but rather remanded the matter for fresh adjudication.

What were the facts?

The assessee, Pratik Medical Education & Charitable Trust, filed an appeal against an order dated 27.08.2024 passed by the Commissioner of Income Tax (Exemption), Ahmedabad. The appeal was filed after a delay of 95 days, which was condoned. The assessee had applied for approval under Section 80G(5)(iii) of the Income Tax Act, 1961, having previously held provisional approval. The CIT(E) had issued notices on 29.06.2024 and 19.07.2024 seeking specific details and documents, to which the assessee failed to respond. Consequently, the CIT(E) rejected the application for approval under Section 80G(5)(i) and cancelled the provisional approval, citing non-submission of mandatory documents required under Rule 11AA(2), including a note on the applicant's activities as per clause (h).

What were the issues?

1. Whether the learned CIT (Exemption) erred in not granting a sufficient and reasonable opportunity of hearing and in rejecting the application for approval u/s 80G(5)(iii) of the Act, vide an ex-parte order? (Mixed question of law and fact, concerning Section 80G(5)(iii) and principles of natural justice). 2. Whether the application made u/s 80G(5)(iii) ought to have been granted by the learned CIT (Exemption) as the appellant possesses a valid registration u/s 12A of the Act? (Question of law, concerning Section 80G(5)(iii) and Section 12A). Assessee's contentions: The assessee argued that it is not conversant with income tax matters, does not operate computers or access the Income Tax Portal, and has no prior income tax litigation. These factors led to non-compliance with the CIT(E)'s notices. The assessee became aware of the rejection only in January 2025. If granted an opportunity, the assessee would diligently comply with all notices and submit necessary documents. Revenue's contentions: The judgment records no specific contentions from the revenue.

Which sections of the Income-tax Act were involved?

Section 80G(5)(iii),Section 80G(5)(i),Section 12A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD

Before: DR. BRR KUMAR & SHRI SIDDHARTHA NAUTIYAL

For Appellant: Shri M K Patel, Advocate
For Respondent: Shri Ashesh R Rewar, CIT DR
Hearing: 15.05.2025Pronounced: 26.05.2025

O R D E R

PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:

1.

This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Exemption), (in short “Ld. CIT(E)”), Ahmedabad vide order dated 27.08.2024.

The Assessee has taken the following grounds of appeal:- 2.

“1. That on facts, and in law, the learned CIT (Exemption) has grievously erred in not granting sufficient and reasonable opportunity of hearing and in rejecting the application for approval u/s 80G(5)(iii) of the Act, vide ex-parte order. 2. That on facts and in law, the application made u/s 80G(5)(iii) ought to have been granted by learned CIT (Exemption) as the appellant is having a valid registration u/s 12A of the Act. The appellant craves liberty to add, alter, amend any ground of appeal

.” 3.

3. At the outset, we observe that the appeal is time barred by 95 days. The delay of 95 days is condoned on due consideration of facts of assessee’s case and owing to causing no perceptible prejudice to other side.

Pratik Medical Education & Charitable Trust vs. CIT(E) Asst.Year –N.A. - 2– 4. The brief facts of the case are that the assessee / applicant trust filed application seeking approval under clause (iii) of the first proviso to sub-section (5) of section 80G of the Income-tax Act, 1961 (Act). The assessee / applicant trust had previously been granted provisional approval in Form 10AC under clause (iv) of the same proviso, effective from 10/02/2022 up to Assessment Year 2024-25. CIT(Exemptions) observed that the assessee / applicant trust was served notices dated 29/06/2024 and 19/07/2024 requesting submission of specific details and documents. However, the assessee failed to respond to either of these notices and did not file any submissions or seek adjournment. Consequently, CIT(Exemptions) proceeded to decide the matter based on the available material and the documents originally submitted with Form 10AB. Upon review of documents filed by assessee / applicant trust, it was observed that key documents required under Rule 11AA(2), including a mandatory note on the activities of the applicant as stipulated under clause (h), were not submitted. CIT(Exemptions) noted that section 80G of the Act requires the Commissioner to be satisfied both with the genuineness of the applicant's activities and its compliance with the conditions outlined in clauses (i) to (v) of section 80G(5). In this case, due to the absence of necessary documentary evidence, CIT(Exemptions) was of the view that he is not in a position to verify the genuineness of the institution’s activities or its eligibility under the prescribed conditions. Accordingly, the application filed in Form 10AB for approval under section 80G(5)(i) was rejected, and the previously granted provisional approval also was cancelled.

5.

Before us, the Counsel for the assessee trust submitted that the applicant is not conversant with income tax matters and does not operate computers or access the Income Tax Portal. He further stated that the Trust has never Pratik Medical Education & Charitable Trust vs. CIT(E) Asst.Year –N.A. - 3– previously been involved in any income tax litigation. It was for these reasons that the assessee could not comply with notices issued by CIT(Exemptions). The Counsel for the assessee submitted that it was only in January 2025 that the assessee became aware of the rejection of the Trust’s application for approval under section 80G(5)(iii) of the Act. The counsel for the assessee submitted that if given an opportunity of hearing, the assessee/applicant trust shall duly and diligently comply with all notices of hearing and shall file necessary details/documents to the satisfaction of CIT(Exemptions).

6.

Accordingly, looking into the facts of the instant case, in interest of justice the matter is hereby restored to the file of CIT(Exemptions) for de-novo consideration. However, we make it clear that in case there is any non- compliance on part of the assessee/applicant trust before CIT(Exemptions), then he would be at liberty to pass appropriate orders, in accordance with law, on the basis of material available on record.

7.

In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 26/05/2025

Sd/- Sd/- (DR. BRR KUMAR) (SIDDHARTHA NAUTIYAL) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad; Dated 26/05/2025 TANMAY, Sr. PS TRUE COPY आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,

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