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Facts
The assessee filed an application for registration under section 12AB of the Income Tax Act, 1961, but it was rejected by the CIT(E) due to a delay in filing the application beyond the due date. The assessee cited the trustee's health issues (cancer treatment) as the reason for the delay in submitting the application and required details.
Held
The Tribunal held that the CIT(E) rejected the application solely on the ground of delay without affording the assessee an opportunity to present their case. Considering the circumstances, the matter was remanded back to the CIT(E) for proper adjudication after verifying the documents to be filed by the assessee.
Key Issues
Whether the rejection of the registration application by the CIT(E) solely on the ground of delay, without granting an opportunity of being heard, is justified? Whether the delay in filing the application for registration due to a trustee's medical emergency can be condoned?
Sections Cited
12AB, 12(1)(ac)(iii), 12A(1)(ac)(iii)
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Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD
Before: MS.SUCHITRA R. KAMBLE & SHRI MAKARAND V.MAHADEOKAR
PER MS.SUCHITRA R. KAMBLE, JUDICIAL MEMBER:
The present appeal has been filed by the assessee against order passed by the Commissioner of Income Tax(Exemption), Ahmedabad under section 12AB of the Income Tax Act, 1961 dated 24.05.2023, vide which the ld.CIT(E) rejected the application in form no.10AB of the assessee for registration under section 12(1)(ac)(iii) of the Act.
The grounds raised by the assessee are as under:
1. 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 delay in applying final registration application beyond the due date mentioned in the section 12A(1)(ac)(iii) of the Act.
2 2. Due to health issue, we have not submitted appeal on time, so we will require permission for condoantion of delay in filing the appeal.
The brief facts of the case are that the appellant trust filed application for registration of trust under section 12AB of the Income Tax Act, 1961 on 28.11.2022 in form no.10AB under Rule 17A of the I.T. Rules 1962. The ld.CIT(E) issued notice to the appellant trust on 18.2.2023, requesting thereby to furnish a detailed note on the activities carried out by the Trust. In response to the notice, the ld.CIT(E) observed that the assessee did not furnish any details, and therefore, from the available details, the ld.CIT(E) observed that the assessee-trust has mentioned the date of incorporation/creation/registration as 4.8.2021 and was granted professional registration on 2.10.2021 for the period commencing from Asst.Year 2022-23 to 2024-25. The ld.CIT(E) held that since the assessee/appellate Tribunal has not filed any reply and the date of commencement of the activities was 6.10.2021 vis-a-vis the appellant-trust has not filed the application under section 12A(1)(ac)(iii) and Form No.10AB within the due date mentioned in the section 12A(1)(ac)(iii) of the Act, therefore, the application is liable to be rejected as non- maintainable, and thus, requested the application vide order dated 2.5.2023.
The ld.AR submitted that there is a delay in filing the present appeal for 49 days, and the reasons for the delay is due to cancer treatment (tongue cancer) of the trustee, Shri Dharmendra H. Shah, who was handling the legal compliance and accounts of the trust. The delay is condoned. The ld.AR 3 submitted that the ld.CIT(E) has rejected the application only on the ground of delay and has not given opportunity to the assessee to present the case of the appellant trust. The ld.AR submitted that due to cancer treatment of the trustee, the appellant trust could not file the requisite details, within the stipulated time, and therefore, the matter may be remanded back to the file of the ld.CIT(E) and allow the appellant-trust to file the details and the ld.CIT(E) should be decide the matter as per the law.
The ld.DR submitted that the assessee/appellant Trust has not filed any documentary evidences before the ld.CIT(E) as well as before the Tribunal, and therefore, the ld.CIT(E) has rightly rejected the application of the assesse-trust.
We have heard both the parties and perused all the relevant material available on record.
It is pertinent to note that the appellant-trust has given affidavit through its trustee who was suffering from cancer during the relevant period, and was not able to do activities of the trust regarding, accounts and necessary legal compliances, and due to these factor, the trust could not file the details before the ld.CIT(E) within the stipulated time. In the interest of justice, it will be appropriate to remand back this matter to the file of the ld.CIT(E) for proper adjudication of the issue after verifying the documents, which will be filed by the appellant-trust. The appellant trust will be given opportunity of hearing by applying principle of natural justice. The appellant trust will file the 4 requisite details within the reasonable time before the ld.CIT(E) as per the requirement of section 12A(1)(ac)(ii)/(iii) of the Act.
In the result, the appeal of the assessee is partly allowed for statistical purpose.
Order pronounced in the Court on 28TH March, 2025 at Ahmedabad.