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Facts
The assessee appealed the rejection of its Section 12AB registration application by the CIT(E), which also involved a 40-day delay in filing attributed to changes in the Trust's management and auditor. The CIT(E) had rejected the application because the assessee failed to respond to a final notice requesting documents, despite some earlier submissions.
Held
The Tribunal condoned the 40-day delay, acknowledging the assessee's reasonable cause. While upholding the CIT(E)'s justification for rejection based on non-compliance, it set aside the CIT(E)'s order and remanded the case to provide the assessee one more opportunity to submit the necessary documents in the interest of natural justice.
Key Issues
Whether the delay in filing the appeal should be condoned; whether the CIT(E) was justified in rejecting the Section 12AB registration application due to non-compliance; and if the assessee should be granted another opportunity to submit documents.
Sections Cited
12AB, 253
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Income Tax Appellate Tribunal, VISAKHAPATNAM “DIVISION” BENCH, VISAKHAPATNAM
Before: SHRI RAVISH SOOD, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
आदेश /O R D E R
PER SHRI S BALAKRISHNAN, ACCOUNTANT MEMBER:
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/EX/45/2024-
I.T.A.No.7/VIZ/2025 Sri Guru Rajendra Suri Jain Aradhana Bhavan Trust 25/1069232711(1) dated 28.09.2024 seeking registration under section 12AB of the Income Tax Act, 1961 (in short ‘Act’).
At the outset, it is noticed from the appeal record that there is a delay of 40 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 learned Commissioner of Income Tax (Exemptions), Hyderabad passed order on 28.09.2024 by rejecting the application filed by the appellant for registration u/s 12A of the Act. As per S.253 of the Act, the appeal against this order ought to have been filed on or before 27.11.2024. However, the appeal could be filed only on 06.01.2025 resulting in a delay of 40 days in filing the appeal.
2. The appellant is running a temple in Guntur. The Board members of the appellant Trust are President, Secretary and Treasurer. The functions of each member are distinct and separate. The President looks after fund raising and resource management. The secretary looks after the administration and day to day running of the temple. The treasurer looks after the financial management and statutory compliances. The Constitution of the Board was changed in the meeting of the Board held on 02.09.2024 (copy of minutes of the meeting is enclosed herewith). Sri Vinod Kumar Jain was elected as the new treasurer. At the same time, it was also decided to change the auditor of the appellant trust. Till then, Sri Narpat Jain, Chartered Accountant practicing at Guntur looked after the accounts of the appellant trust. It took some time to decide about the new auditor. 3. It took some time for the new body to get hold on the affairs of the Trust. It was in the last week of December, Sri MUTHA GULAB CHAND JAIN Chartered Accountant, practicing at Guntur was appointed as the auditor of the Trust. Due to these changes, the filing of appeal was lost sight of. It was only at the time of review of the affairs of the Trust by the newly appointed auditor, that the non filing of appeal against the order dt.
Page. No 2
I.T.A.No.7/VIZ/2025 Sri Guru Rajendra Suri Jain Aradhana Bhavan Trust 28.09.2024 of CIT(Exemptions) was noticed As soon as the lapse was noticed, the appellant took necessary steps and filed the appeal on 02.01.2025, 4. Thus, the delay in filing the appeal was only due to the reasons mentioned above which were beyond the control of the appellant. The delay is neither intentional nor deliberate. Therefore, the appellant prays the hon'ble ITAT to kindly condone the delay and pass appropriate orders in the interest of rendering substantial justice.”
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 40 days. Therefore, we hereby condone the delay of 40 days in filing the appeal before the Tribunal and proceed to adjudicate the appeal on merits in the following paragraphs.
4. Assessee has raised following grounds of appeal in its appeal: -
1. The order of the learned Commissioner of Income Tax (Exemption), Hyderabad is contrary to the facts and also the law applicable to the facts of the case.
2. The learned Commissioner of Income Tax (Exemption), Hyderabad is not justified in dismissing the application for registration u/s 12AB ex- parte without considering the information submitted by the appellant.
3. Without prejudice to the above, the learned Commissioner of Income Tax (Exemption) ought to have granted registration u/s 12AB of the Act.
Any other ground that may be urged at the time of appeal hearing.”
Page. No 3
I.T.A.No.7/VIZ/2025 Sri Guru Rajendra Suri Jain Aradhana Bhavan Trust 5. 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).
On this issue, Ld. Authorised Representative [hereinafter “Ld.AR”] submitted that the assessee has received the notices on the following dates i.e., on 27.04.2024, 07.05.2024, 22.05.2024 and 08.08.2024. In response to the notices issued assessee filed reply on 17.08.2024 through e-mail with various attachments as detailed in paper book at page nos. 30 to 35. However, Ld.CIT(E) issued another notice on 19.09.2024 requiring the assessee to file the details called for vide various notices issued earlier along with necessary documentary evidences. Since the assessee did not respond to the notice dated 19.09.2024, Ld.CIT(E) considering the limitation period rejected the application and Form 10AB, considering that assessee has not submitted the mandatory information as required in the notices. Ld.AR further submitted that since the same details called for in the earlier notices was again called for vide notice dated 19.09.2024 assessee has inadvertently not responded to the notice on the bonafide belief that it has submitted its reply on 17.08.2024. Therefore, he pleaded that since the documents were already available with the Ld.CIT(E), not responding to the final notice cannot be a reason for rejecting the Registration under section 12AB of the Act considering the information has submitted by the assessee partially. He
Page. No 4
I.T.A.No.7/VIZ/2025 Sri Guru Rajendra Suri Jain Aradhana Bhavan Trust therefore pleaded that one more opportunity may be provided to the assessee to submit its reply with documentary evidences once again to the Ld.CIT(E).
Per contra, Ld. Departmental Representative [hereinafter in short “Ld.DR”] relied on the order of the Ld.CIT(E).
We have heard both the sides and perused the material available on record. It is noticed that the assessee failed to respond to the notice dated 19.09.2024 but has responded to the earlier notices vide reply dated 17.08.2024 by submitting all necessary documents. However, Ld.CIT(E) observed that despite providing sufficient opportunity assessee did not comply with the requirement or has complied with it partially. 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. Further it was also admitted by the Ld.AR that the copies of the financial statements of earlier years were not produced before Ld.CIT(E). 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
Page. No 5
I.T.A.No.7/VIZ/2025 Sri Guru Rajendra Suri Jain Aradhana Bhavan Trust 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).
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 27th June, 2025.