IIT MANDI IHUB AND HCI FOUNDATION,MANDI, HIMACHAL PRADESH vs. COMMISSIONER OF INCOME TAX, EXEMPTIONS, CHANDIGARH

14. That my affidavit in this regard is also enclosed herewith.

3 3. We shall be dealing the condonation application in the foregoing paragraphs while adjudicating the appeal of the assessee on merits.

2. That the Ld. Commissioner of Income Tax(Exemptions) has erred in rejecting the registration ex-parte only on the basis of alleged non-compliance on part of the assessee when in fact assessee had sought adjournment to furnish the requisite documents and as such the order passed is arbitrary and unjustified.

before the appeal is finally heard or disposed off.

6. The assessee, IIT Mandi IHub and HCI Foundation, is a Section 8 company incorporated on 24.09.2020 under the Companies Act, 2013. It functions under the aegis of the Ministry of Science and Technology, Government of India, with the stated objective of promoting innovation and research in Human-Computer Interaction and allied disciplines. The assessee filed an application in Form 10AB on 28.09.2022 seeking registration under the aforementioned provisions of the Act.

7. In order to examine the application and verify the genuineness of the activities, the Ld. CIT(E) issued several notices electronically on 10.11.2022, 13.12.2022, 30.12.2022, and 24.01.2023. However, despite repeated opportunities, the assessee failed to respond to these notices or furnish any supporting documents. The Ld. CIT(E), in the absence of any participation or material evidence, proceeded to reject the application ex parte on 22.02.2023.

8. During the course of hearing before us, the Ld. DR submitted that the assessee is a government backed entity and is expected to adhere strictly to the procedural mandates of law. The non-participation before the Ld. CIT(E), despite multiple opportunities, reflects a callous and casual approach, particularly in light of 4 the statutory requirement to establish the genuineness of charitable activities under Section 12A of the Act. The Ld. DR contended that even government institutions are not exempt from compliance obligations and must demonstrate procedural discipline while interacting with statutory authorities under the Income Tax Act.

9. In rebuttal, the learned counsel for the assessee submitted that the failure to respond to the notices was not intentional, but rather due to a series of bona fide oversights. It was explained that the communication from the Department was addressed to an outdated email ID (TIH@iitmandi.ac.in) which became inactive after a change in domain. The earlier consultant engaged for the 12A/80G application had left during this time, and the transition to the new consulting team was not smooth. As a result, critical information such as the notices and the eventual order remained undelivered or unnoticed. It was only after appointing new consultants in early 2025 that the assessee discovered the ex parte order.

10. The learned counsel also drew attention to the affidavit of the Chief Executive Officer, wherein all these facts have been affirmed and the delay of 662 days in filing the appeal has been duly explained. It was urged that the lapse was not deliberate or negligent but stemmed from administrative mismanagement, which has since been rectified. It was argued that denying the assessee an opportunity of hearing would amount to a miscarriage of justice.

11. We have carefully considered the rival submissions and examined the records. There is no dispute that the assessee did not participate in the proceedings before the Ld. CIT(E) despite being afforded multiple opportunities. At the same time, the explanation provided backed by a sworn affidavit points to genuine systemic lapses arising from email misrouting and consulting transition. While we do not condone the laxity, we are also conscious of the fact that the assessee is a Central Government initiative, operating in the public interest, with no profit motive, and was engaging with the process for the first time. 11.1 It is trite law that ex parte orders which suffer from lack of service or opportunity violate the principles of natural justice. Even a government-funded body is expected to comply with procedural norms, but equally, the authorities must consider the peculiar factual context and the larger institutional framework within which such entities operate. 11.2 In the facts and circumstances of this case, we are inclined to take a liberal view. We find merit in the explanation furnished for the delay in filing the appeal and 5 accordingly condone the delay of 662 days. Further, in the interest of justice, the impugned order dated 22.02.2023 is set aside and the matter is restored to the file of the CIT(E), Chandigarh, with a direction to re-adjudicate the application of the assessee after affording due opportunity of being heard and permitting the assessee to furnish all relevant documents and clarifications in support of its case.

12. In the result, the appeal filed by the assessee is allowed for statistical purposes.

13. Both the parties fairly submitted that the facts and circumstances of other appeals i.e / Chd/2025 are exactly identical to the Appeal in ITA No. 261/Chd/2025, therefore our directions given in ITA No. 261/Chd/2025 shall apply mutatis mutandis to this appeal also.