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Facts
The assessee filed two appeals against orders of the CIT(E) rejecting their applications for registration under Section 12AB and approval under Section 80G of the Income Tax Act, 1961. The rejections were primarily based on the assessee not being registered under the Rajasthan Public Trust Act and alleged non-genuineness of activities.
Held
The Tribunal condoned a 14-day delay in filing one of the appeals, attributing it to technical glitches. The matter was restored to the CIT(E) for fresh adjudication with a direction to consider the application upon submission of the RPT Act registration and documents proving genuineness of activities.
Key Issues
Whether the CIT(E) erred in rejecting the applications for registration and approval without providing adequate opportunity, and if the delay in filing the appeal was justifiable.
Sections Cited
12AA, 80G, 12AB, 10(23C), 12A
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”B” JAIPUR
vkns'k@ORDER PER: DR. S. SEETHALAKSHMI, J.M. These are two appeals filed by the assessee against two different orders of the Ld.CIT (Exemption), Jaipur both dated 05-08-2024 passed under section 12AA and 80G of the Income Tax Act, 1961 respectively. The grounds of appeal raised by the assessee in both the appeals are as under:
– u/s 12AA of the Act “1. The Impugned order u/s 12AB of the Act 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 granting Registration/approval u/s 12AB. 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 may 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 Id. CIT(E) may be directed to grant Registration/approval from the date of application. ‘’ ITANo.1284/JPR/2024 – 80 G of the Act “1. The Impugned order u/s 80G of the Act 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. 2. The Ld. CIT(E) erred in law as well as on the facts of the case in rejecting the application for granting Registration/approval u/s 80G. The rejection so made and refusal to grant Registration/approval u/s 80G is contrary to the provisions of law and facts of the case. The same kindly may 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 Id. CIT(E) may be directed to grant Registration/approval from the date of application. ‘’ Bench at the outset of hearing observed that there is delay of 14 days in filing of the appeal by the assessee for which the ld. AR of the assessee filed applications for condonation of delay with following prayers.
“1. In this connection it is submitted that the applicant/assessee is a trust and filed an appeal against the order dated 05/08/2024 passed by CIT Exemption, Jaipur for rejecting assessee’s claim for approval u/s 80G of the income tax Act.
2. Further as per date of order dated i.e. 05/08/2024, the appeal was to be filed on or before 60 days on 04/10/2024but the same has been e-filed on18/10/2024.If we count delay then it is about 14days. However, there is no delay if following facts are considered:-
At the outset it is pertinent to mention that the assessee filed two appeals, first appeal for rejecting the assessee’s claim of registration u/s 12AB of the income tax act and the second appeal for rejecting assessee’s claim for approval u/s 80G of the income tax act.
That both the appeal were being prepared together as the impugned order were passed on the same date i.e. 05/08/2024.
That appeal fees for both the appeals were also deposited on the same day i.e. 31/08/2024. 6. That the first appeal had been e-filed on 23/09/2024 within the time limit, however the second appeal could not be filed within the time. 7. That the reason for delay filing the appeal is that the OTP for e-filing the appeal was not coming, and if coming, it was coming with much delay. Though, we tried several times to e-file the appeal and finally e-filed the appeal on 18/10/2024. 8. That all the appeals are required to be e-filed, however the technical glitch occurred in the case of assessee was beyond the control of the assesse or his counsel. 9. Thus due to aforementioned reasons the appeal could not filed within time and the delay so caused may kindly be condoned. 10. It is submitted that, recently on 05/08/2024 , the Hon'ble Supreme Court in the case ofMool Chandra v. UOI(CA No. 8435-8436 of 2024 (@ S.L.P. (Civil) Nos. 2733 -2734 of 2024 dt. 5-8-2024) held that “No litigant stands to benefit in approaching the courts belatedly. It is not the length of delay that would be required to be considered while examining the plea for condonation of delay, it is the cause for delay which has been propounded will have to be examined. If the cause for delay would fall within the four corners of “sufficient cause”, irrespective of the length of delay same deserves to be condoned. However, if the cause shown is insufficient, irrespective of the period of delay, same would not be condoned.”
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 abovementioned judgment is a leading case on the subject and has a binding force on all the officers/courts subordinate thereto.
The apex court have again reiterated that the expression “sufficient cause” should receive a liberal construction. The Hon’blecourt has also held that advancing of substantial justice should be of prime importance. Kindly refer Vedbai vs. ShantaramBaburamPatil& 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.”
2.2 During the course of hearing, the ld. DR as to application for condonation of delay of the assessee submitted that Court may decide the issue as deem fit and proper in the interest of justice.
2.3 We have heard both the parties and perused the materials available on record. The Bench noted that the reasons advanced by assessee for condonation of delay of 14 days are sufficient to condone the delay as technical reasons and that is why there is delay of 14 days. Thus, we concur with the submission of the assessee and condone the delay of 14 days in filing the appeal by the assessee 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 was prevented by sufficient cause.
3.1 Apropos to the ground so raised by the assessee in the ld. CIT(E) rejected the assessee’s claim of registration u/s 12AA of the Act by observing as under:- ‘’4.2. On verification of the application in Form 10AB filed by the applicant, it was found that the application was not complete, and the documents required to be accompanied with Form 10AB were not furnished such as: - Self-certified copies the annual accounts of the applicant for the F.Y 2020-21 & 2022-23 (Rule 17A(2)(g)) Note on activities of the applicant (Rule 17A(2)(k)). It is also important to mention here that above so-called details along with some other details were called from assessee vide various notices as mentioned above. However, assessee failed to submit the same. Thus, assessee's request for registration u/s 12AB is liable to be rejected on ground of incomplete form.
5. In view of above discussion assessee's claim of registration section 12AB is liable to be rejected and thus being rejected on following grounds: -
Registration under Rajasthan Public Trust Act, 1959. Non Genuineness of Activities and non compliance.
06. Further 12AB (1)(b)(ii)(B) of the Income Tax Act, 1961 also state that if CIT is not satisfied has to pass order rejecting such application and also cancelling its earlier registration. Thus, it is clarified that applicant's provisional registration under clause (vi) of clause (ac) of sub-section (1) of section 12A of the Income Tax Act. 1961 dated 22.06.2022 is also being cancelled. Further assessee has failed to give proper justification for regularisation of provisional registration, thus with this order provisional registration is also lapsed and cancelled.’’ 3.2 Apropos to the ground so raised by the assessee in the ld. CIT(E) rejected the assessee’s claim of exemption u/s 80G of the Act by observing as under:- 02. Approval u/s 80G cannot be granted without registration u/s 12AB 2.1. As per rule 11AA of the Income Tax Rule, 1962, the registration u/s 12A/12AB or notification u/s 10(23C) is a precondition for granting approval u/s 80G of the I.T. Act, 1961. Vide this office order No. ITBA/EXM/F/EXM45/2024-25/1067301417(1) d ated 05.08.2024 Also, during the present proceedings, the applicant has also failed to furnish any replies, thus, genuineness of activities and all the above issues remains same. Thus, genuineness of activities and all the issues remain same. Thus, the claim of the applicant u/s 80G is liable to rejected on this issue on following grounds:-
Registration under Rajasthan Public Trust Act, 1959. Non Genuineness of activities & non compliance. In view of above discussion, the application in form No. 10AB seeking exemption u/s 80G is liable to be rejected.
03. In view of above discussion assessee's claim of approval u/s 80G is liable to be rejected and thus being rejected on following grounds: - Approval u/s 80G cannot be granted without registration u/s 12AB.
4. Further 2nd proviso to 80G(5) also state that if CIT is not satisfied has to pass order rejecting such application and also cancelling its earlier approval. Thus, it is clarified that applicant provisional approval under clause (iv) of first proviso to sub- section (5) of section 80G of the Income Tax Act, 1961 dated 22.06.2022 is also being cancelled. Further assessee has failed to give proper justification for regularisation of provisional approval, thus with this order provisional approval is also lapsed and cancelled.’’ 3.3 During the course of hearing, the ld. AR of the assessee in both the appeals mainly submitted that the assessee was not provided adequate opportunity of being heard by the ld. CIT(E) and thus both the orders should be quashed being against the principles of natural justice. Further, the ld. AR of the assessee stated at Bar that the assessee trust is in the process of applying the registration under RPT Act, 1959 before the competent authority and it is likely to get the same. This being the sole reason the assessee prayed for one more chance to restore the matter to the file of the ld. CIT(E) for afresh adjudication. 3.4. Per contra, the ld. DR relied on the orders of the ld. CIT(E). 3.5 After hearing both parties and perusing the materials available on record, we noticed that an application for registration u/s 12AA of the Act was rejected by the ld CIT(E) on the ground that the assessee is not registered under RPT Act, 1959 and non Genuineness of the Activities and non-compliance. In this regard, the ld. AR of the assessee stated at Bar that the assessee trust is in the process of applying the same before the competent authority and it is likely to get the same. Therefore, in these circumstances, we restore the matter back to the file of the ld. CIT(E) with the direction that as and when the assessee trust produces the copy of the Registration under RPT Act, 1959 as well as the documents as to genuineness of the activities of the trust then the application of the assessee trust for registration u/s 12AA of the Act be decided afresh in accordance with law. 3.6 Since we have restored the appeal of the assessee with regard to the registration u/s 12AA of the Act to the file of the ld. CIT(E) for afresh adjudication, therefore, the outcome of appeal of the assessee u/s 80G of the Act is consequential in nature. 3.7 Before parting, we may make it clear that our decision to restore the matter back (supra) 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.
4.0 In the result, the appeals of the assessee are allowed for statistical purposes. Order pronounced in the open court on 16 /01/2025.
Sd/- Sd/- ¼ xxu xks;y ½ ¼MkWa-,l-lhrky{eh½ (GAGAM GOYAL) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 16 /01/2025 *Santosh/ Mishra आदेश की प्रतिलिपिअग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू The Appellant- Shree Dharam Foundation Trust, Jaipur 1. 2. izR;FkhZ@ The Respondent- The ld. CIT(E). 3. vk;djvk;qDr@ The ld CIT 4. विभागीय प्रतिनिधि] आयकरअपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZQkbZy@ Guard File & 1284/JPR/2024) vkns'kkuqlkj@ By order,
सहायक पंजीकार@Aेेजज. त्महपेजतंत