PRABHATHAM CHARITABLE TRUST,SHORANUR vs. CIT(EXEMPTION), KOCHI

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ITA 280/COCH/2024Status: DisposedITAT Cochin24 April 2025AY 2023-2024Bench: SHRI INTURI RAMA RAO (Accountant Member), SHRI KESHAV DUBEY (Judicial Member)4 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the CIT(Exemption) rejected the application for registration solely on the ground that the assessee failed to file any reply or documents in response to the hearing notice dated January 4, 2024, and the show cause notice dated January 16, 2024. The assessee, in its written statement, explained that the delay was due to the Managing Trustee's daughter's marriage on January 29, 2024, and that an adjournment request was uploaded in response to the show cause notice. Considering these submissions and in the interest of justice and fair play, the Tribunal decided to remit the entire issue back to the file of the CIT(Exemption) for a fresh decision in accordance with the law. The assessee was directed to provide necessary information and records, and a reasonable opportunity of being heard was to be granted. The Tribunal cautioned that further default would not entitle the assessee to leniency. The ratio decidendi is that where a reasonable explanation for non-compliance is provided due to unavoidable personal circumstances, and an attempt to seek adjournment was made, the matter should be reconsidered to ensure fair play, rather than outright rejection.

What were the facts?

The assessee, Prabhatham Charitable Trust, filed an application for final registration under Form No. 10AB on September 28, 2023, for the assessment year 2023-24. The Trust had previously been granted provisional registration. The Commissioner of Income Tax (Exemption), Kochi, issued a hearing notice on January 4, 2024, and a show cause notice on January 16, 2024. The assessee failed to respond to the hearing notice, citing the daughter's marriage of the Managing Trustee on January 29, 2024, as the reason for missing the notice. The assessee did upload an adjournment request in response to the show cause notice. However, the CIT(Exemption) rejected the application on February 7, 2024, stating no reply or documents were filed in response to the notices. The assessee appealed this order to the ITAT.

What were the issues?

1. Whether the rejection of the application for registration by the CIT(Exemption) was justified, considering the assessee's explanation for non-compliance with the notices and the alleged haste in passing the order? (Question of law and fact, relying on principles of natural justice and procedural fairness). Assessee's contentions: - The assessee had responded to the show cause notice and explained the reasons for delay in furnishing papers, attributing it to the Managing Trustee's daughter's marriage on January 29, 2024. - The failure to respond to the hearing notice was unintentional and due to reasons beyond control. - The rejection order was passed in haste without considering the submissions. - The assessee prayed for an opportunity to furnish the complete documents and grant of registration. Revenue's contentions: - The D.R. argued that despite two opportunities provided by the CIT(Exemption), the assessee did not file any reply or documents, thus the rejection was justified.

Which sections of the Income-tax Act were involved?

Section 10(23C),Section 12A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BEFORE

For Respondent: Shri Sanjit Kumar Das, D.R
Hearing: 19.02.2025

Assessment Year: 2023-24 Prabhatham Charitable Trust Kulappully Shoranur CIT (Exemption) Vs. Kerala 679 122 Cochin PAN NO : AADTP9349N APPELLANT RESPONDENT Appellant by : None Respondent by : Shri Sanjit Kumar Das, D.R. Date of Hearing : 19.02.2025 Date of Pronouncement : 24.04.2025 O R D E R

PER KESHAV DUBEY, JUDICIAL MEMBER:

1.

This appeal at the instance of the assessee is directed against the order of the ld. CIT(Exemption), Kochi dated 7.2.2024 vide DIN & Notice No. ITBA/EXM/F/EXM45/2023-24/1060586719(1) rejecting the application for registration/approval filed by the assessee.

2.

The assessee has raised the following grounds of appeal:

3.

Brief facts of the case are that the assessee is a Charitable Trust. The Trust deed is registered before the Sub Registrar Office, Ottapalam on 15.11.2018. The assessee was granted a provisional Registration with No. AADTP9349NE20206. The application for final registration has been filed in Form No. 10AB on 28/09/2023, i.e. well within the permitted time, i.e. six months prior to the expiry of the period of provisional registration. The ld. CIT (Exemption) accordingly issued hearing notice dated 04/01/2024 and Show cause notice dated 16/01/2024. As contended, the Managing Trustee was busy with his personal matter as his daughter's marriage was scheduled to be held on 29/01/2024 and due to this, the notice dated 04/01/2024 missed his attention. Further, the assessee in response to the show cause notice dated 16/01/2024 uploaded an adjournment request in the Income Tax portal. However, the Ld. CIT (Exemption) rejected the application for registration vide Order dated 07/02/2024 stating that the applicant has not filed any reply/documents in response to hearing notice dated 04/01/2024 or show cause notice dated 16/01/2024.

4.

Aggrieved by the order of ld. CIT(E) rejecting the application, the assessee is in appeal before us.

5.

None appeared at the assessee’s behest. We accordingly proceed with ex-parte.

6.

Before us, the ld. D.R. vehemently submitted that in spite of providing two opportunities by the ld.CIT(E), the assessee did not file any reply/document in response to hearing notice, therefore, ld. CIT(E) Kochi has rightly rejected the application filed in Form 10AB.

7.

We have heard the rival submissions and perused the materials available on record. On going through the annexure attached to Form No.10AD, we take a note that the ld. CIT(E) Kochi has rejected the application for approval on the sole ground that the assessee has not filed any reply/documents in response to hearing notice dated 4.1.2024 and show cause notice dated 16.1.2024. Assessee in his written statement of facts filed before us has submitted that due to marriage of the daughter of managing trustee which was held on 29.1.2024, the assessee could not represent the case before the ld. CIT(E). Further, the assessee in his written statement of facts submitted that in response to show cause notice dated 16/01/2024, the assessee uploaded the adjournment request in the income tax portal. This Being so, considering the grounds of appeal as well as in the interest of justice and fair play, we remit back the entire issues in dispute to the file of ld. CIT(E), Kochi to decide afresh in accordance with the law. Needless to say, a reasonable opportunity of being heard must be granted to the assessee. The assessee is also directed to file necessary Information/records/accounts/evidence as may be required by the ld. CIT(E) for granting the registration. We make it clear that in case Prabhatham Charitable Trust, Shoranur Page 4 of 4 of further default, the assessee shall not be entitled for any leniency. It is ordered accordingly.

8.

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

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