SRI VISWESWARA SWAMY TEMPLE,MACHILIPATNAM vs. COMMISSIONER OF INCOME TAX (EXEMPTIONS), HYDERABAD

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ITA 544/VIZ/2025Status: DisposedITAT Visakhapatnam05 December 20256 pages
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What did the Tribunal hold?

The Tribunal acknowledged that the CIT(E) had provided multiple opportunities for the assessee to appear and comply with the notices, but the assessee failed to do so. This non-compliance prevented the CIT(E) from verifying the necessary documents as required under Section 12AB(1)(a) of the Act, thus justifying the rejection of the registration. However, in the interest of natural justice, the Tribunal decided to grant one more opportunity to the assessee. The impugned order of the CIT(E) was set aside, and the matter was restored to the file of the CIT(E). The assessee was directed to fully cooperate and furnish all required documents and information. The CIT(E) was directed to provide this one final opportunity for submission. The appeal was allowed for statistical purposes. No issue was expressly left undecided.

What were the facts?

The assessee, Sri Visweswara Swamy Temple, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Visakhapatnam Bench, against the rejection order of the Commissioner of Income Tax (Exemption), Hyderabad. The rejection order, dated 18.06.2025, concerned the assessee's application for registration under section 12AB of the Income Tax Act, 1961. The appeal was filed with a delay of 25 days. The assessee attributed this delay to major renovation and reconstruction work at the temple premises, which disrupted administrative operations and the collation of documents. The ITAT condoned this delay. The facts leading to the rejection were the assessee's failure to respond to multiple notices issued by the CIT(E) on 27.03.2025, 21.05.2025, and 07.06.2025, seeking specific information for verification of the application.

What were the issues?

1. Whether the learned CIT(E) ought to have considered the facts of the case before dismissing the application ex parte, and if so, what is the consequence? (Question of law and fact, concerning principles of natural justice and procedural fairness under Section 12AB). 2. Whether the assessee had a reasonable cause for not responding to the notices issued by the learned CIT(E)? (Question of fact, relating to the explanation for non-compliance). 3. Whether the learned CIT(E) ought to have considered the nature of the temple as a centuries-old institution run by the State Government Endowments Department and its charitable objectives before rejecting the registration? (Question of law and fact, concerning the eligibility criteria under Section 12AB). Assessee's Contentions: - The rejection order was ex parte, and the notices were sent to the personal email of the Executive Officer, which was provided pending the creation of an official temple email. - The temple is a few-hundred-year-old institution run by the State Government Endowments Department, with no non-charitable objectives or non-compliance with other laws. - The net surplus in audited financial statements was less than Rs. 1 lakh annually. The application was to comply with State Government directives. - The assessee prayed for a liberal view and for the application to be remitted back for fresh consideration. Revenue's Contentions: - The assessee failed to utilize the opportunities provided by the CIT(E) and did not comply with the notices. - The order passed by the CIT(E) was ex parte, and the ITAT should confirm the order.

Which sections of the Income-tax Act were involved?

Section 12AB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM “DIVISION” BENCH, VISAKHAPATNAM

Before: SHRI RAVISH SOOD, HON’BLE

For Appellant: Shri K. Siva Rama Kumar, CA
For Respondent: Shri Narendra Kumar Naik, CIT(DR)

आदेश /O R D E R

PER SHRI S BALAKRISHNAN, ACCOUNTANT MEMBER:

1.

This appeal is filed by the assessee against rejection order of Learned Commissioner of Income Tax (Exemption), Hyderabad [hereinafter in short “Ld.CIT(E)”] vide DIN & Notice No. ITBA/EXM/F/EXM/45/2025- 26/1077191926(1) dated 18.06.2025 seeking registration under section 12AB of the Income Tax Act, 1961 (in short ‘Act’).

I.T.A.No.544/VIZ/2025 Sri Visweswara Swamy Temple 2. At the outset, it is noticed from the appeal record that there is a delay of 25 days in filing the appeal before the Tribunal. Explaining the reasons for belated filing of the appeal, the Ld. AR drew our attention to the affidavit filed by the assessee along with a petition seeking for condonation of delay and read out the contents of the petition which is as under:

“1. The petitioner is the Appellant in the appeal mentioned above, The Order in dispute i.e., the Rejection Order in Form. 10AD of the Commissioner of Income tax, (Exemptions) was passed and also served on your petitioner-appellant on 18.6.2025, 2. The petitioner-appellant is thus obliged to file an appeal against the said order before the Hon'ble Tribunal by 17.8.2025, But, the Appeal Memorandum is being presented in the office of the Hon'ble Tribunal on 11.9.2025, Le, with a delay of 25 days (estimated date of receipt in ITAT office: 11.9.2025 - by the time the Appeal Memorandum reaches the Hon'ble Tribunal's Office, the delay would be 25 days), 3. The temple premises were under major renovation and reconstruction work, which required the full attention of the Executive Officer and the office staff, The administrative office of the temple was also temporarily shifted and disrupted during this period, resulting in delay In collating documents and seeking professional advice for filing the present appeal.

4. It is prayed that the Hon'ble Tribunal be pleased to condone the delay and pray that the Appeal be admitted and taken on record, as otherwise great hardship and Insufferable Injustice will be caused to the petitioner herein. The Inconvenience caused in this regard to the Honourable Tribunal is sincerely regretted., The petitioner also hereby undertakes to ensure proper representation before the Honourable Tribunal in the above appeal on its admission and an opportunity of hearing is granted thereafter.”

3.

On perusal of the contents of the affidavit filed by the assessee as well as the submission of the Ld. AR, we find that the assessee is prevented by a reasonable and sufficient cause in filing the appeal beyond the prescribed time limit with a delay of 25 days. Therefore, we hereby condone the delay of 25 days

Page. No 2

I.T.A.No.544/VIZ/2025 Sri Visweswara Swamy Temple in filing the appeal before the Tribunal and proceed to adjudicate the appeal on merits in the following paragraphs.

4.

Briefly stated facts of the case are that the assessee has filed an e-application on 23.10.2024 in Form No.10AB seeking registration under section 12AB of the Act. The Ld.CIT(E) issued letter dated 27.03.2025 to the assessee in respect of proceedings under section 12AB of the Act for verification and to furnish a detailed reply on the specific information called for in the said notice. In response, assessee failed to response to the letter. Subsequently, Ld.CIT(E) issued other letters on 21.05.2025 and 07.06.2025 to submit the information as per the notices issued. In response, assessee failed to comply to the notices. As there is no compliance to the notices, the Ld.CIT(E) rejected the application filed in Form-10AB for registration under section 12AB of the Act.

5.

Aggrieved by the rejection order, assessee filed an appeal before us and raised following grounds in its appeal: -.

“1. In the facts and circumstances of case, learned CIT (Exemptions)) ought to have considered the facts of the case before dismissal of the application ex parte.

2.

The appellant couldn't respond to the Notices (with 60 questions) issued by the learned CIT (E), as they were sent to the personal email of the Executive Officer (it is fairly admitted that the same was given in the Application by the appellant itself, pending creation of official mail to the Temple).

3. Learned CIT (E) ought to have considered the fact that the appellant is a few-hundred-year-old Temple run by the State Govt Endowments Department and there would be nothing non-charitable in the objectives of the Trust and no noncompliance with other laws, which only disentitle

Page. No 3 I.T.A.No.544/VIZ/2025 Sri Visweswara Swamy Temple rejection of registration. (The Appellant prays for remit back of the application for fresh consideration).

4. As per the audited financial statements attached to the Application for Trust Registration in Form.10AB by the appellant, the net surplus of income over expenditure was less than Rs.1 lakh in each year. The appellant applied for Sec.12AB registration to comply with State Govt directives to all the Govt.-run Temples and its grant doesn't in any way impact incometax collection, but militates against the non-observance of State Govt instructions by the appellant. The appellant prays for a liberal view and direct the learned CIT(E) for reconsideration of the application.”

5. The appellant craves leave to add or amend any Ground of Appeal.”

6.

The only issue contested by the assessee is with respect to rejection of the Registration under section 12AB of the Act by the Ld.CIT(E).

7.

At the outset, Ld. Authorized Representative [hereinafter in short “Ld.AR”] submitted that the order of the Ld. CIT(E) is exparte and pleaded that one more final opportunity may be given to the assessee to substantiate and submit the documentary evidences before the Ld. CIT(E).

8.

On the other hand, Ld. Departmental Representative [hereinafter in short “Ld. DR”] relied on the order of the Ld.CIT(E) and submitted that assessee has not utilized the opportunity provided by the Ld.CIT(E). Therefore, the order passed by Ld. CIT(E) is exparte order and he pleaded to confirm the order of the Ld.CIT(E).

9.

We have heard both the sides and perused the material available on record. On a perusal of the rejection order, it is observed that even though Ld.CIT(E) has provided opportunity on several occasions, assessee could not appear nor

Page. No 4

I.T.A.No.544/VIZ/2025 Sri Visweswara Swamy Temple complied to the notices issued. Ld.CIT(E) in the absence of necessary documents to verify the genuineness of the activities of the Trust proceeded to reject the application for registration under section 12AB of the Act. Non-compliance to the statutory notice prevented the Ld.CIT(E) from verification of necessary documents rendered under provisions of section 12AB(1)(a) of the Act. Considering the above facts, the Ld.CIT(E) was justified in rejecting the registration under section 12AB of the Act. However, in the interest of natural justice, we find it appropriate to grant another one more opportunity to the assessee to submit the relevant documents including the evidences as detailed in the notices. Accordingly, we grant one more opportunity to the assessee and thereby set-aside the impugned order and restore the matter back to the file of Ld.CIT(E) with a direction to provide one more opportunity to the assessee to furnish required details. Assessee is also directed to fully cooperate and furnish necessary documents / information as required by the Ld.CIT(E).

10.

In the result, appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 05th December, 2025.

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