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Facts
The assessee trust applied for registration under Section 12A of the Income Tax Act, but the CIT(E) rejected the application and cancelled provisional approval due to non-compliance in providing documentary evidence and non-appearance during hearings. The assessee sought condonation of a 42-day delay, citing its location in a remote rural area with poor internet connectivity and semi-literate trustees.
Held
The Tribunal condoned the 42-day delay, acknowledging the assessee's difficulties. It restored the matter to the file of the CIT(E) for fresh consideration (de-novo), clarifying that if further non-compliance occurs, the CIT(E) is free to pass orders based on available records. The appeal was allowed for statistical purposes.
Key Issues
Rejection of application for registration under Section 12AA/12A of the Income Tax Act and cancellation of provisional approval due to non-compliance, and condonation of delay in filing the appeal.
Sections Cited
12A, 12AA, 115TD
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Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD
Before: SHRI SIDDHARTHA NAUTIYAL & SHRI MAKARAND V. MAHADEOKAR
O R D E R
PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:
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 02.09.2024.
2. At the outset, we observe that the appeal is time barred by 42 days. The delay of 42 days is condoned on due consideration of facts and owing to smallness of delay causing no perceptible prejudice to other side.
3. The Assessee has taken the following grounds of appeal:-
“1. On facts and circumstances of the case the Hon’ble Pr. CIT (Exemption) is not justified in rejecting the application of the appellant filed for grant of registration u/s. 12AA of the I.T. Act, 1961.
That, the Hon’ble Pr. CIT (Exemption) is not justified in rejecting the application of the appellant filed for grant of registration u/s 12AA of the I.T. Act, 1961 as no sufficient opportunities were provided to the appellant to furnish the details called for.
That, the Hon’ble Pr. CIT (Exemption) is not justified in cancelling the provisional approval already granted u/s 12A of the I.T. Act, 1961 only for the Deep Education And Cultural Trust vs. CIT(E) Asst.Year –N.A. - 2– reason that the appellant could not comply to the notices issued for furnishing of certain details / documents.
4. That, the Hon’ble CIT (exmp) is not justified in directing the assessing officer to compute the tax liability u/s 115TD of Income Tax 1961 r.w.r. 17CB of IT Rules.
5. Appellant craves leave to add, alter, amend or withdraw any ground/s of appeal on or before hearing of the appeal.”
The brief facts of the case are that the assesee / applicant trust filed application for registration under Section 12A of the Act. However, CIT(E) observed that in spite of issuance of notices of hearing, none appeared on behalf of the assessee / applicant trust. Accordingly, Ld. CIT(E) rejected the application filed by the assessee with the following observations:
“7. As discussed above, the applicant/assessee has failed to file documentary evidences to enable me to satisfy about: i. Genuineness of the activities of the trust or institution. ii. That the activities of trust or institution are in consonance with the objects of the trust or institution. iii. That other laws material for the purpose of achieving objects are complied with.
In view of the above, the present application filed in Form No.10AB sub- clause (iii) of clause (ac) of sub-section (1) of section 12A of the Income Tax Act, 1961 is rejected and also your provisional registration stands cancelled.”
The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(E). On going through the facts of the instant case, we observe that only two notices of hearing were issued to the assessee / applicant trust. Further, in the application for condonation of delay, the assessee trust has submitted that the trust is situated in a remote rural area having poor internet connectivity and further the trustees are semi-literate persons having little knowledge about online processes. Accordingly, in the interest of justice, the matter is hereby restored to the file of Ld. CIT(E)
Deep Education And Cultural Trust vs. CIT(E) Asst.Year –N.A. - 3– for de-novo consideration. However, we make it clear that in case there is further non-compliance on part of the assessee / applicant trust, in response to notices issued by CIT(E), then he would be at liberty to pass appropriate orders, on the basis of material available on record, in accordance with law.
In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 08/05/2025
Sd/- Sd/- (MAKARAND V. MAHADEOKAR) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 08/05/2025 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,