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Facts
The assessee filed two appeals against the orders of the Ld. CIT (Exemption) rejecting their applications for registration under Section 12AA and approval under Section 80G of the Income Tax Act, 1961. The assessee had inadvertently refiled applications for registration after already having permanent registration, and these new applications were rejected for non-compliance and lack of evidence regarding the genuineness of their activities. The appeals were filed with a significant delay, which the assessee sought to condone.
Held
The Tribunal condoned the delay in filing the appeals, citing the Supreme Court's liberal approach to condonation of delay and the sufficient cause shown by the assessee. The Tribunal restored the matter to the file of the Ld. CIT(E) with a direction to consider the appeals afresh, giving the assessee an opportunity to submit the required details and documents, and to decide the issue of registration and exemption based on merits. The original rejection orders were set aside.
Key Issues
1. Whether the appeals were filed within the limitation period and if the delay could be condoned. 2. Whether the rejection of the applications for registration under Section 12AA and exemption under Section 80G by the CIT(E) was justified based on the facts and evidence presented.
Sections Cited
12AA, 80G, 10AB, 12A, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES,”A” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 713 & 743/JPR/2024
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 23-11-2022 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:-
1. – u/s 12AA of the Act “1. The Impugned order u/s 12AB of the Act dated 23/11/2022 is bad in law and on facts, without providing adequate & reasonable opportunity of being heard, being without jurisdiction, barred by limitation and for various other reasons illegal, bad in law, glaring violation of natural justice 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 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.
– u/s 80G of the Act “1. The Impugned order u/s 80G/10AB of the Act dated 23/11/2023 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 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.
2.1 At the outset of hearing, the Bench observed that there are delay of 484 days and 214 days in filing of the appeals relating Section 12AA and 80G of “1. In this connection it is submitted that the applicant is Trust/Society incorporated on 22/10/2002 having permanent Registration u/s 12AA as well as 80G of the Act. Thereafter in compliance of direction of Income Tax Department further applied and got Order for Registration u/s 12AA and Order for Approval u/s 80G of the Act w.e.f. 24/09/2021.
2. That due to oversightness an Application had again filed u/s 10AB of the act, for Registration u/s 12AA and for u/s 80G on 06/05/2022 & 16/06/2022 respectively. The mistake as occurred has been rectified by filling an application for withdrawal of both the application dated 06/05/2022 and 16/06/2022 on dated 22/11/2022, but without considering the same the Ld. CIT (E) has rejected both the application u/s 12AA and 80G of the Act vide their order dated 23/11/2022. The same order could not have been challenged before your honours.
The reason of late filing was that the impugned order was sent on the email id: advsljain@gmail.com which belongs to Shri Shanti Lal Jain one of founder trustee of the trust which he could not use from long time therefore could not visit such mail and after filling the application u/s 10AB he did not visit a single time and the trustee of the trust are not much aware about information technology therefore not checked the mails as well as income tax portal frequently. The order was sent on dt. 22/11/2023. Recently when surfing the Income Tax Portal that it has come to their notice that a rejection order was there on portal and we have to file an appeal before Hon'ble ITAT.
4. That thereafter counsel has started to prepare the appeal and the appeal has been prepared on 17/05/2024 and getting signed.
5. Thus there was no negligence's of either assessee nor the counsels. Thus due to the above the appeal could not be filed within time. In support of these contention an affidavit of the trustee is enclosed.
6. 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:
BG Professional Education Society "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.
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 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 delay 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 reasons and time taking a various process which were bonafide and was a sufficient cause and there was no melafide intention.
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).
To this effect, the President of the Society filed an affidavit deposing the above facts.
2.2 On the other hand, the ld. DR strongly opposed the condonation applications of the assessee relating to such an inordinate delay in filing the appeals (supra)
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 in late filing of the both appeals have merit and we condone the delay in late filing of the appeals 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 and inclined to decide the appeal on its merits. 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:- “03. 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:-
BG Professional Education Society Self-certified copies the annual accounts of the applicant for last three years. Self-certified copy of existing order of granting registration u/s 12A Note on activities of the applicant. In the light of the above section of the Act and Rules, the Commissioner of Income-tax has been empowered to call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and may also make such inquiries as he may deem necessary in this behalf. Under such powers vested in CIT (E), the applicant was asked to file details required to be furnished along with Form 10AB as well as other details sought thereafter vide letters issued on different dates as mentioned above. However, the applicant has failed to comply with the letters.
As discussed above, the applicant did not submit documents regarding establishment of the trust/institution such as:- Self-certified final accounts for the last three years. Donation list. Ownership proof of the premises from which the trust/institution is running its activities. Bank account statement of the institution as well as evidences in support of his claim.
To decide the matter of seeking registration u/s 12AB, the genuineness of the activities being undertaken by the applicant are also to be examined. The applicant has not submitted any such details and other information. Therefore, genuineness of activities of the trust or institution could not be ascertained. Thus, the charitable nature and genuineness of the activities of the applicant could not be established.
Sufficient opportunity has been provided to the applicant to produce details and documents in support of his claim for registration u/s 12AB of the Income Tax Act, 1961 but applicant have failed to do so. In the light of the above facts, the application seeking registration u/s 12AB is hereby rejected and filed.”
3.2 Apropos to the ground so raised by the assessee the ld. CIT(E) rejected the assesee’s claim of exemption u/s 80G of the Act by observing as under:-
2. As per rule 11AA of the Income Tax Rule, 1962, the registration u/s 12A/12AA 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/EXM45/2022-23/1047609303(1) dated 23.11.2022, the applicant Society/trust/samiti has been denied registration u/s 12AB. Therefore, it is not eligible for exemption u/s 80G of the I.T. Act, 1961.
3. In view of above discussion, the application in form No. 10AB seeking exemption u/s 80G is rejected. The applicant is, however, at liberty to apply afresh after completing the requisite details.”
3.3 During the course of hearing, the ld. AR of the assessee submitted that the assessee has already been granted permanent registration u/s 12A and 80G of the Act by the ld. CIT(E) vide order dated 24-09-2021 from A.Y.2022-23 to A.Y.2026-27. He further submitted that despite of having permanent registration, the assessee trust again inadvertently applied for registration u/s 12A and 80G of the Act. Later on the assessee trust vide letter dated 19-11-2022 prayed for withdrawal of 12A and 80G Registration as filed on 06-05-2022 before the ld. CIT(E). The ld. AR further submitted that ld. CIT(E) vide order dated 23-11-2022 rejection registration u/s 12A and 80G of the Act. Hence, the ld. AR prayed to restore the matter to the ld CIT(E) to examine the case as to permanent registration u/s 12AA and 80G of the Act and allow relief.
BG Professional Education Society 3.4. Per contra, the ld. DR relied on the orders of the ld. CIT(E). 3.5 We have heard both the parties and perused the materials available on record. From the entire conspectus of the case, the Bench noted that the assessee was already granted permanent registration u/s 12A and 80 G of the Act by the ld. CIT(E) vide order dated 24-09-2021 from A.Y. 2022-23 to 2026-27. It is further noted that despite of it, the assessee again filed application for getting permanent registration u/s 12A and 80G and the same has been withdrawn vide letter dated 19-11-2022 but the ld. CIT(E) rejected the same vide his order dated 23-11-2022 without verifying permanent registration already granted to the assesee. Thus the issue of registration u/s 12A and 80G is restored to the file of the ld CIT(E) as to whether the assessee trust has been granted registration from A.Y.2022-23 to 2026- 27, if so, the same may be considered and dispose off the appeals of the appeal as per law. 3.6 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.