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Facts
The assessee trust filed an application for registration under Section 12A(1)(ac) of the Income Tax Act. The CIT(E) rejected the application due to non-compliance with notices, citing concerns about the genuineness and alignment of activities with objects. The appeal was filed with a delay of 253 days.
Held
The Tribunal condoned the delay in filing the appeal, noting the assessee's explanation regarding the accountant's lack of prompt action and the trust's remote location. The Tribunal set aside the CIT(E)'s order, directing that the assessee be given another opportunity to furnish the required details and documents.
Key Issues
Whether the delay in filing the appeal was sufficiently explained, and if the CIT(E) rightly rejected the registration application without giving adequate opportunity.
Sections Cited
12A(1)(ac), 12AB
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Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD
Before: SHRI SANJAY GARG & SHRI NARENDRA PRASAD SINHA
This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Exemption), Ahmedabad, (in short ‘the CIT(E)’), dated 19.02.2024 in respect of rejection of registration of the trust under Section 12A(1)(ac) of the Income Tax Act, 1961 (in short ‘the Act’).
There was a delay of 253 days in filing of this appeal. The assessee has filed an affidavit explaining the reason of delay. It has been submitted that the trustees were occupied in charitable [Maharshi Lilashah Mission Trust vs. CIT(E)] - 2 – activities in remote village locations. The matter regarding rejection of registration of the trust was handed over to the accountant for further necessary action in consultation with the Chartered Accountant. The said accountant, without consulting the Chartered Accountant, kept on exploring various options, as guided by the local tax practitioners by trying to file another application before CIT(E) and filing appeal with CIT(A) etc. This led to considerable delay in filing the present appeal after proper advice by the Chartered Accountant. It was submitted that the delay in the filing of the present appeal was not intentional but due to lack of proper and prompt action on the part of the accountant and that there was no mala-fide intention on the part of the assessee. The ld. CIT-DR, on the other hand, objected to the condonation of delay on the ground that the assessee has not properly explained the delay.
2.1 We have considered the explanation of the assessee. It is found that the assessee trust is located in remote location of Banaskantha district where proper legal advice might not be available. Further, the delay was due to fault of the accountant who didn’t consult the authorized Chartered Accountant promptly and kept on exploring other options as per local advice. It has been held by Hon’ble Gujarat High Court in the case of Vareli Textile Industries (154 Taxman 33) (Gujarat) that while rejecting application for condonation of delay in filing appeal/cross-objections, meritorious case should not be thrown out on ground of limitation. Considering the fact that the assessee is a trust engaged in charitable activities and its registration application was not [Maharshi Lilashah Mission Trust vs. CIT(E)] - 3 – considered on merits, as well as the explanation of the assessee, the delay in filing the present appeal is condoned.
The brief facts of the case are that the assessee had filed an application for registration of the trust u/s.12AB of the Act in Form No.10AB. The Ld. CIT(E) had called for certain details and documents vide notices dated 20.11.2023 and 18.12.2023, which was not complied. In the absence of any explanation, the Ld. CIT(E) was not satisfied about the genuineness of the activities of the trust and that the activities of the trust were in consonance with its objects. Therefore, he rejected the application for registration of the trust.
Ms. Urjita Shah, Ld. AR explained that all the notices sent by the Ld. CIT(E) were on the email ID of the dealing Accountant who neither complied to the notices nor informed the assessee in this regard. She submitted that the dealing person, not being tech savvy, didn’t access the email communication in time. Further that the two opportunities were provided within a short span of one month only. She submitted that the assessee is engaged in charitable activities and, therefore, in the interest of justice, another opportunity may be allowed to the assessee to furnish the documents as required, by setting aside the matter to the file of the Ld. CIT(E).
Per contra, Shri Sharmdeep Sinha, Ld. CIT-DR supported the order of the ld. CIT(E). He, however, had no objection if the [Maharshi Lilashah Mission Trust vs. CIT(E)] - 4 – matter was set aside to the file of the Ld. CIT(E) for allowing another opportunity to the assessee.
We have considered the rival submissions. It is found that the Ld. CIT(E) had allowed only two opportunities to the assessee within a short span of one-month time period. Considering the explanation of the assessee and also considering the fact that the assessee is engaged in carrying on charitable activities, we deem it proper to set aside the matter to the file of the Ld. CIT(E) with a direction to allow another opportunity to the assessee to file the details and documents as required. The assessee is also directed to make necessary compliance before the Ld. CIT(E).
In the result, the appeal filed by the assessee is allowed for statistical purposes.
This Order pronounced on 07/05/2025
Sd/- Sd/- (SANJAY GARG) (NARENDRA PRASAD SINHA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 07/05/2025 आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��थ� / The Respondent. 2. संबंिधत आयकर आयु� / Concerned CIT 3. 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,