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Facts
The assessee, Shree Hanuman Goshala Seva Samiti, filed an application for registration under section 12AB of the Income Tax Act. The CIT(E) rejected the application citing reasons such as the assessee not being registered under the Rajasthan Public Trust Act and issues regarding payments to trustees and genuineness of activities.
Held
The Tribunal condoned the delay of 42 days in filing the appeal, citing sufficient cause due to the counsel's bonafide mistake. The Tribunal restored the matter back to the CIT(E) to provide the assessee with another opportunity to present their case and cure the defects.
Key Issues
Whether the CIT(E) erred in rejecting the registration application without providing adequate opportunity and if the delay in filing the appeal should be condoned.
Sections Cited
12AB, 12AB(4)
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”B” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, vk;dj vihy la-@ITA No. 954/JP/2024
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, vk;dj vihy la-@ITA No. 954/JP/2024 fu/kZkj.k o"kZ@Assessment Year : 2024-25 cuke Shree Hanuman Goshala Seva CIT (Exemption), Vs. Samiti Jaipur Bholu Choraha Barodiya Kalan, Morak Ramganj Mandi, Kota LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ABBTS2534B vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. Shrawan Kumar Gupta, Adv. jktLo dh vksj ls@ Revenue by : Mrs. Alka Gautam, CIT-DR lquokbZ dh rkjh[k@ Date of Hearing : 25/03/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 01/04/2025 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM
By way of a present appeal, the assessee challenges the order of the learned Commissioner of Income Tax, (Exemption), Jaipur [ for short ‘CIT(E)’] passed on 30.03.2024 in matter of registration of the assessee applicant-assessee as per provisions of section 12AB of the Act.
2. In this appeal, the assessee has raised following grounds: -
Shree Hanuman Goshala Seva Samiti vs. CIT(E)
1. The Impugned order u/s 12AB of the Act dated 30.03.2024 is bad in law and on facts, without providing adequate & reasonable opportunity of being heard, being without jurisdiction and for various other reasons and hence the same may kindly be quashed.
The Ld. CIT(E) erred in law as well as on the facts of the case in rejecting the application for grant Registration/approval u/s 12AB and in not granting Registration/approval on the incorrect allegations allegation as not registered under RPT Act, Benefit to interested persons , Genuineness of activities, without considering the material available on record in their true perspective and sense. The rejection so made and refusal to grant Registration/approval u/s 12AB is contrary to the provisions of law and facts of the case. The same kindly be quashed.
3. That the impugned order so passed was in the contravention of the law prevalent at the relevant point of time and also on fact and hence may kindly be quashed. The ld. CIT(E) be directed to grant Registration/approval from the dated of application .
4. The appellant prays your honour indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing.
3. At the outset of hearing, the Bench observed that there is delay of 42 days in filing of the appeal by the assessee for which the ld. AR of the assessee filed an application for condonation of delay with following prayers:
In this connection it is submitted that the applicant is Trust/Society. The assessee has filed application before CIT(Exemption), Jaipur for registration u/ 12AB. The ld. CIT(E) rejected the application of the assessee on dt. 30.03.2024 on the reason assessee not registered under the RPT Act 1959 and other. The order was received on portal on dt. 30.03.2024, which was not served upon the assessee physical. However as per date of order the appeal was to be filed on or before 29.05.2024 but the same is being filed on by 08.07.2024 i.e by delay of about 1 month 9 days. Although actually there is no delay if following facts are being considered.
Shree Hanuman Goshala Seva Samiti vs. CIT(E) 2. The reason of late filing was that the assessee is a society, the order was sent on the email which belongs to accountant of the Society. The accountant of the Society has informed to the Society in the first week of May 2024. Thereafter the members of the society has send this order in the office of the Counsel at Kota to take the necessary action. The counsel has asked to the society members to take necessary step. But as the counsel has to go out of India and he was out of India from 18 May 2024 to 25/26-05.2024 and after returning he has forget and thereafter the counsel has again went out of Kota i.e. at Utrakhand for Chardham Yatra from 01.06.2024 to 10.06.2024. thus due to these travelling he has forget i.e escaped from his mind to file the appeal. Recently when the Society members and counsel has discussed regarding this order then the counsel has realized his bonafide human being mistake. As the assessee were under impression that the counsel would have taken necessary steps in this regards.
That thereafter our counsel has talked to other counsel at Jaipur who after seeing all the facts has advised to file the appeal with the condonation application being a human being bonafide mistake and there is a strong case in favour. That thereafter counsel at Jaipur has started to prepare the appeal and the appeal has been prepared on 29.06.2024 and sent to us for singe.
Thus there was no also negligence’s of either assessee nor the counsels nor office bearers. Thus due to this reason the appeal could not be filed within time. In support of these contention an affidavit of the trustee is enclosed.
It is submitted that the Hon'ble Supreme Court in the case of Collector, Land & Acquisition v. Mst. Katiji & Others (1987) 167 ITR 471 (SC) has advocated for a very liberal approach while considering a case for condonation of delay. The following observations of the Hon'ble Court are notable: "The legislature has conferred the power to condone delay by enacting section 5 of the Limitation Act 1963 in order to enable the Courts to do substantial justice to parties by disposing of matters on 'merits'. The expression sufficient cause' employed by the legislature is adequately elastic to enable the Courts to apply the law in a meaningful manner which subserves the ends of justice-that being the life-purpose of the existence of the institution of Courts. It is common knowledge that this Court has been making a justifiably liberal approach in matters instituted in this Court. But, the message does not appear to have percolated down to all the other Courts in the hierarchy."
The said judgment is a leading case on the subject and has a binding force on all the officers subordinate thereto.
6. The action or inaction by an assessee, on the advice of its counsel, whether correct or incorrect, if caused a delay, has been held to be reasonable and Shree Hanuman Goshala Seva Samiti vs. CIT(E) sufficient cause in these cases also. Kindly refer N. Balakrishnan v. M. Krishna Murthy(1998) 7 SCC 123 published in 30 BCAJ 922, Concord of India Insurance Co. Ltd. v. Smt. Nirmala Devi and Anothers 118 ITR 507 . That it is also settled that for the mistake of the Counsel, the party cannot be suffered. Reliance on Mahaveer Prasad Jain v/s CIT, 172 ITR 331(MP), Concord India Insurance Co. Ltd v/s Smt. Nirmala Devi, 118 ITR 507(SC), Kripa Shankar v/s CIT/CWT 181 ITR 183(All), N. Balakrishnan v/s M. Krishanmurthy 7 SSC123.
The Hon'ble Jaipur Bench of ITAT has also condoned the dealy in the case of Ganesh Himalaya Pvt.Ltd. v. ACIT 22 Tax World 415 (Jp) where the filing was delayed because the son of the Managing Director had become victim of some misdeeds committed by the Holigans, particularly when on the similar points in the earlier four years, the appeals were filed in time. In the instant case also, the appeal could not be filed in time because of the above human being mistake which were bonafide and was a sufficient cause and there was no melafide intention.
8. Recent Decision of Apex Court : in a recent decision, the apex court have again reiterated that the expression “sufficient cause” should receive a liberal construction. The Hon’ble court have also held that advancing of substantial justice should be of prime importance. Kindly refer Vedbai vs. Shantaram Baburam Patil & Others 253 ITR 798 (SC). Prayer : In view of above facts and circumstance and with the sympathy and settled legal position, the delay so caused may kindly be condoned.
4. During the course of hearing, the ld. DR stated that the reasons advanced that the counsel was travelling and thereby he could not file the appeal is not sufficient reasons to condone the delay in statutory limit provided under the Act. However he stated that the Court may decide the issue as deem fit in the interest of justice as delay is of 42 days only. materials available on record. The bench noted that though the assessee’s counsel was handed over the papers for filling the appeal but it was his counsel who was not so serious in handling the affairs of the assessee and thereby since there is no fault of the assessee and considering the fact that due to the fault of the counsel the assessee should not suffer and therefore, the prayer of the assessee for condonation of delay of 42 days has merit and we concur with the submission of the assessee and thereby condone the delay of 42 days in filing the appeal by the assessee is condoned in view of the decision of Hon’ble Supreme Court in the case of Collector, land Acquisition vs. Mst. Katiji and Others, 167 ITR 471 (SC) as the assessee is prevented by sufficient cause.
Succinctly, the fact as culled out from the records is that online in Form No. 10AB seeking registration u/s 12AB of the Income Tax Act, 1961 was filed on 29.09.2023. A letter/notice dated 16.02.2023 was issued at the e-mail/address provided in the application requiring the applicant to submit certain documents/explanations by 26.12.2023. The assessee seek adjournment and thereafter the part details were submitted online. On perusal of reply details furnished by the applicant, few discrepancies were 08.02.2024 fixing the case on 13.02.2024. This time, also the on given date, the applicant had not produced complete details. Therefore, the case was decided on the basis of material filed by the applicant along with its application in Form No. 10AB.
7. Based on the material available on record ld. CIT(E) noted that the assessee is not registered under the Rajasthan Public Trust Act, 1959.
Further, on examination of the bank account furnished by the assessee he noted that the assessee-applicant has made various payments to the trustee/office bearers. The assessee has not justified those payments and therefore, ld. CIT(E) concluded that the trust has made violation of the provisions of section 12AB (4) of the Act. While examination of the records, ld. CIT(E) also noted that the assessee has not furnished the ledgers bills and vouchers for various payments as requested and therefore, he holds that the activities of the trust are not genuinely carried out and thereby he rejected the application of the trust by stating the following reasons: • Rajasthan Public Trust Act, 1959 • Benefit to an interested person • Genuineness of activities
Aggrieved from that finding of the ld. CIT(E) the assessee-applicant preferred the present appeal. The ld. AR of the assessee in support of the grounds so raised vehemently argued that the assessee trust has already applied under the RPT Act and as regards the other observations, he submitted that since the time given was very sought and therefore, the assessee could not respond to the queries raised by the ld. CIT(E) on the other issues. Considering the principle of natural justice, he prayed that assessee may be given one more chance to represent their facts before ld. CIT(E).
On the other hand, ld. DR supported the order of ld. CIT(E) stating that the assessee was given various opportunities and since they have violated the provisions of section 12AB(4) of the Act and they were not registered under the Rajasthan Public Trust Act, the appeal of the assessee trust is not maintainable and required to be dismissed.
We have heard the rival contentions and perused material available on record. The Bench noted that the ld. CIT(E) in the application of the assessee pertaining to registration u/s 12AB of under the RPT Act, 1959. As regards the payment made to related parties and genuineness of activities the ld. AR of the assessee prayed that due to shortage of time the assessee could not satisfy the ld. CIT(E) with sufficient details and thereby prayed to grant one more opportunity in the interest of justice to the assessee-applicant as the observation so made are curable. Considering this aspect of the case the Bench does not want to go into merit of the case, but it is imperative that the assessee must be provided adequate opportunity of being heard and be given a fair chance by the ld. CIT(E) to cure the defect / non submission of the certain information. In the light of this aspect of the case, Bench feels that the assessee should be given one more chance to contest the case before the ld. CIT(E) and the assessee is directed to produce all the relevant papers concerning the application filed before the ld. CIT(E) to settle the dispute raised hereinabove.
Before parting, we may make it clear that our decision to restore the matter back to the file of the ld. CIT(E) shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the ld. CIT(E) independently in accordance with law. purposes.
Order pronounced in the open court on 01/04/2025.
Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 01/04 /2025 *Ganesh Kumar, Sr. PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- Shree Hanuman Goshala Seva Samiti, Kota izR;FkhZ@ The Respondent- CIT(Exemption), Jaipur 2. vk;dj vk;qDr@ The ld CIT 3. 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत xkMZ QkbZy@ Guard File (ITA No. 954/JP/2024) 6. vkns'kkuqlkj@ By order,
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