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Facts
The assessee trust filed an application for registration under Section 12A(1)(ac)(iii). The CIT(E) rejected the application, citing a lack of sufficient documentation and repeated adjournments sought by the assessee.
Held
The Tribunal held that the assessee should not be penalized for the mistakes of its previous counsel and granted the assessee one final opportunity to present its case.
Key Issues
Whether the CIT(E) was justified in rejecting the registration application without considering the bonafide mistake of the counsel and whether the assessee was afforded sufficient opportunity.
Sections Cited
12AB, 12A(1)(ac)(iii), 1961
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आयकरअपीलीय अिधकरण,च"ीगढ़ "ायपीठ “बी” , च"ीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH HEARING THROUGH: HYBRID MODE "ी लिलत कुमार, "ाियक सद" एवं "ी मनोज कुमारअ"वाल, लेखा सद" BEFORE: SHRI. LALIET KUMAR, JM &SHRI. MANOJ KUMAR AGGARWAL, AM आयकर अपीलसं./ 2025 िनधा"रण वष" / Assessment Year : 2026-27 Maa Durga Gumti Mandir Gaushala बनाम The CIT Exemptions Trust, Chandigarh Vill: Gumti PO: Gumti, Shahabad Markanda, Kurukshetra-136135 "ायी लेखासं./PAN NO: AAHTM5068M अपीलाथ"/Appellant ""थ"/Respondent िनधा"रती की ओरसे/Assessee by : Shri Kushal Chopra, C.A (Virtual Mode) राज" की ओर से/ Revenue by : Smt. Tarundeep Kaur, CIT DR सुनवाई की तारीख/Date of Hearing : 23/12/2025 उदघोषणा की तारीख/Date of Pronouncement : 24/12/2025 आदेश/Order PER LALIET KUMAR, J.M:
This appeal by the Assessee is directed against the order of the learned Commissioner of Income Tax (Exemptions), Chandigarh [CIT(E)], dt. 22/10/2025. The impugned order rejected the appellant's application for registration under Section 12AB of the Income Tax Act, 1961. 2. In the present appeal Assessee has raised the following grounds:
1. That the Ld. CIT (Exemptions) has erred in rejecting the application for registration u/s 12A(1) (ac)(iii) of the Act as made by the assessee on 10.06.2025 and rejecting the same for registration u/s 12AB vide ex-parte order, dated 22.10.2025 is against the facts and circumstances of the case.
2. That no sufficient or reasonable opportunity have been afforded to the appellant and at times, the assessee was prevented by sufficient and reasonable cause in not furnishing the voluminous details as sought by the Ld. CIT (Exemptions).
3. That the rejection of adjournment application as sought by the assessee on 25.09.2025 was on account of reasonable cause and, thus, that adjournment should have been granted, rather registration rejecting the under section 12AВ of the Act.
4. Notwithstanding the above said ground of appeal
, the Ld. CIT (Exemptions) having not given any finding on merits of the case and, thus, the rejections of application u/s 12AB by the CIT (Exemptions), is not a correct finding.
5. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off.
Briefly, the facts of the case are that the assessee trust filed an application in Form 10AB on 10/06/2025 seeking registration under Section 12A(1)(ac)(iii). To verify the genuineness of the activities and compliance with the trust's objects, the CIT(E) issued a questionnaire on 21/07/2025. Subsequent opportunities were afforded on 29/08/2025 and 18/09/2025.
The CIT(E) noted that while the notices were delivered and viewed on the portal, the assessee repeatedly sought adjournmentsspecifically on 05/08/2025, 05/09/2025, and 25/09/2025. Consequently, the CIT(E) rejected the application, citing a lack of sufficient documentation to assess the genuineness of activities.
The learned counsel for the Assessee submitted that the non-compliance at the lower level was not intentional. The appellant has placed on record an affidavit from the erstwhile counsel, which clarifies: The failure to upload the requested documents and the repeated requests for adjournments were due to the counsel's professional oversight and personal constraints. The trust had provided the necessary records to the representative, but they were not electronically filed in a timely manner. It was argued that the Assessee should not be penalized for the mistakes of its counsel, especially when the trust's objects are purely charitable.
The learned Departmental Representative (DR) strongly opposed the remand of the matter. The DR’s arguments included: The CIT(E) afforded sufficient and reasonable opportunities. The record shows the notices were delivered and read by the applicant on multiple dates. The conduct of the assessee in seeking repeated adjournments without filing any information indicates a lack of interest in pursuing the matter. Relying on the maxim "Vigilantibus Non Dormientibus Jura Subveniunt," the DR contended that the law assists the vigilant and not those who sleep over their rights.
We have heard the rival submissions and perused the records. While the CIT(E) was justified in his observations regarding the lack of cooperation during the assessment stage, we must consider the specific circumstances presented before us.
The Assessee has filed an affidavit shifting the burden of non-compliance onto the previous counsel. It is a settled legal principle that for a bonafide mistake or negligence of a professional representative, the litigant (the trust) should not be made to suffer. A charitable institution’s registration is a substantive matter that should ideally be decided on the merits of its objects and activities rather than on technical defaults or procedural laches.
In the interest of substantial justice, we believe the appellant deserves one final opportunity to substantiate its claim for registration.Accordingly, we set aside the order of the CIT(E) dated 22/10/2025 and remand the matter back to the file of the CIT(E), Chandigarh, for de novo adjudication with the following direction: