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Facts
The applicant society's application for registration under Section 12AB of the Income Tax Act was rejected by the CIT(E). The appeal was filed with a significant delay, and an application for condonation of delay was submitted later. The grounds for rejection included incomplete application, non-registration under RPT Act, issues with genuineness of activities, and that it was made for the benefit of the community.
Held
The Tribunal condoned the delay in filing the appeal, albeit with costs, considering the applicant is a society and the issues are of significance. However, due to the applicant's failure to provide necessary documents to demonstrate the genuineness of its activities, the matter was remanded to the CIT(E) for fresh consideration.
Key Issues
Whether to condone the delay in filing the appeal? Whether the applicant society's activities are genuine and if it qualifies for registration under Section 12AB of the Income Tax Act.
Sections Cited
12AB, 10AB, 1959
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”A-Bench” JAIPUR
vkns'k@ORDER PER: NARINDER KUMAR, JUDICIAL MEMBER On 19.09.2023, Learned CIT(E) rejected the application of the applicant Samiti, thereby not granting approval for its registration under section 12AB of the Income Tax Act, 1961 ( hereinafter referred to as the “Act”). 2. Application under the above said provision of the Act was furnished online on 31.03.2023. It came be rejected on the following four grounds:-
As noticed above, the impugned order is dated 19.09.2023. Present appeal came to be presented on 11.01.2025. Registry raised a deficiency note that the appeal came to be presented after a delay of 408 days.
Initially, no application seeking condonation of delay was filed on behalf of the appellant. Only on 28.03.2025, an application has been presented seeking condonation of delay in filing of the appeal.
Arguments heard on the application. File perused. Whether to condone delay in filing of the appeal? 6. In the application seeking condonation of delay, it has been alleged that the appeal came to be presented after 408 days, as the representative of the society took time in having correct legal advice on the point of proper remedy after rejection of the application by Learned CIT(E). 7. Ld. AR for the appellant-applicant has submitted representative of the applicant was in dilemma as to whether the appropriate remedy was to submit fresh application before Learned CIT(E) or to challenge the impugned order by way of appeal before this Appellate Tribunal. Ultimately, President of the society engaged him (Learned C.A. present before us), Raigar Samaj and Chatrawas vikas Samiti and on his advice, present appeal came to be presented on 11.01.2025. Accordingly, Ld. AR has requested for condonation of delay.
Admittedly, impugned order was passed on 19.09.2023, and served upon the applicant on the same date. Since, the appeal came to be presented on 11.01.2025, the applicant should have presented the appeal accompanied by the application seeking condonation of delay. However, the appeal was not accompanied by any such application. Admittedly, it has been presented on 28.03.2025.
When a party feels aggrieved by some order passed by an authority under the Act, said party is to resort to the appropriate remedy with diligence so as to challenge the same promptly. Law of limitation does not permit that such a party, feeling aggrieved by any order, just sleeps over the matter as regards the remedy available and knock at the door at the Tribunal as and when it gets awakened from sleep. Herein, firstly the representative of the applicant before Learned CIT(E) should have availed of legal assistance timely. Had it been done so, the Chartered Accountant or the concerned practitioner must have apprised appellant’s representative as to what was the appropriate remedy to challenge the impugned order.
Raigar Samaj and Chatrawas vikas Samiti There is nothing in the application to suggest as to on which date(s) the representative of the applicant contacted two to three consultants from the city. There is also no mention of the names of said consultants in the application. All this goes to shows that the representative of the applicant took the matter very casually.
Having gone through the impugned order, we find that representative of the applicant even failed to comply with the directions issued by Learned CIT(E) in connection with production of certain documents as regards, genuineness of activities of the applicant. Had requisite documents been produced, same would have helped in effective adjudication of the issues involved. This also shows negligence on the part of the representative of the applicant during proceedings before Learned CIT(E).
However, taking into consideration that the applicant is a society, and the issues involved are of great significance, we deem it a fit case to condone the delay in filing of the appeal, though subject of costs, having regard to the non diligence on the part of the applicant.
Raigar Samaj and Chatrawas vikas Samiti 12. Accordingly, the application seeking condonation of delay is allowed, but the applicant is burdened with cost of Rs.2,000/-. Costs to be deposited by the applicant in “Prime Minister’s National Relief Fund”. Discussion on Merits 13. Arguments have been advanced even on merits. Heard. File perused. Non registration of the Samiti under RPT Act, 1959 14. As noticed above, this is one of the grounds for rejection of the application. In this regard, it may mentioned here that Co-ordinate Bench ITAT, Jaipur has held in APJ Abdul Kalam Education and Welfare Trust vs. CIT(E) decided on 15.01.2025 that for the purposes of registration of such institutions, u/s 12AB of the Act, registration under RPT Act, 1959 is not one of the essential requirements.
The only submission put forth by Ld. AR for the appellant is that since the applicant could not avail of the opportunity granted by Learned CIT(E) by non production of certain relevant details and documents, in the interest of justice, matter may be remanded to Learned CIT(E) for decision of the applicant afresh, after providing reasonable opportunity so as to comply with directions of the Learned CIT(E).
Raigar Samaj and Chatrawas vikas Samiti 16. In para 4.1 of the impugned order, while dealing with the issue of genuineness of activities of the applicant society, Learned CIT(E) specifically mentioned about following details:- List of donors. Bills and vouchers of expenses. Photograph of activities. Details of social handle. Digital footprint. Details of Bank account details of last three years.”
But, the applicant failed to comply with directions. Having regard to the issues involved, we deem it a fit case to remand the matter to Learned CIT(E) for decision afresh on the application seeking registration u/s 12AB of the Act, of course, while providing reasonable opportunity to the applicant of being heard.
Application under section 12AB of the Act was submitted on 31.03.2023. It came to be decided on 19.09.2023. Ample opportunities were granted by Learned CIT(E) by way of letters/notices dated 24.07.2023, 10.08.2023 and 19.08.2023. Learned CIT(E) has so observed in the impugned order. We find that having constraint of time for disposal of the application, Ld. CIT(E) had no objection, but to proceed to dispose of the application.