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Facts
The assessee's applications for registration under Section 12A and approval under Section 80G were rejected by the CIT(E). The appeals were filed with a delay. The rejection of the 12A application was due to it being considered premature and non-maintainable, while the 80G approval was rejected consequent to the 12A rejection. The assessee argued that a bona fide mistake led to the initial incorrect filing and that there was a denial of natural justice.
Held
The Tribunal condoned the delay in filing the appeals, noting that the delay was not intentional and that the cause of substantial justice should be preferred. For ITA No. 1306/SRT/2024, the Tribunal found that the principle of natural justice was not adhered to as the CIT(E) issued only one notice and proceeded to decide the case. For ITA Nos. 1307 & 1308/SRT/2024, similar reasons of denial of opportunity of hearing led to the matter being remitted.
Key Issues
Whether the delay in filing the appeals should be condoned and whether the rejection of applications for registration under Section 12A and approval under Section 80G, due to procedural grounds and alleged denial of natural justice, warrants remittal to the CIT(E) for fresh adjudication.
Sections Cited
12A, 80G(5), 253(3), 12AB, 10(23C)
AI-generated summary — verify with the full judgment below
Before: MS SUCHITRA RAGHUNATH KAMBLE & SHRI BIJAYANANDA PRUSETH
आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM: These three appeals emanate from the separate orders dated 06.11.2024 and 20.08.2024 passed by the Commissioner of Income-tax (Exemption), Ahmedabad [in short “the CIT(E)”].
is against rejection of application for registration u/s 12A of the Income-tax Act, 1961 (in short, ‘the Act’) whereas in and 1307/SRT/2024, the appellant has agitated against rejection of its application for final/regular registration u/s 80G(5) of the Act.
The appeals filed by the assessee in ITA No.1307/SRT/2024 is barred by 56 days in terms of provisions of section 253(3) of the Act. The assessee to1308/SRT/2024 Shardaben Arjanbhai Dholakiya has filed an affidavit for delay in filing of appeal before the Tribunal. In the affidavit, it has been stated that the CIT(E) rejected approval u/s 80G(5) on the ground that application for registration u/s 12A(1)(ac)(vi) was rejected vide order dated 14.08.2024. Initially, assessee decided not to file appeal against the order dated 14.08.2024 and filed fresh application for registration u/s 12A(1)(ac)(iii) of the Act as it was provisionally registered till AY.2025-26. Accordingly, it filed fresh application on 29.06.2024, which was also rejected because it was not provisionally registered u/s 12A(1)(ac)(iii) of the Act. Consequently, the application for approval u/s 80G(5) of the Act was also rejected. Therefore, appellant filed simultaneous appeals against the orders rejecting application for registration u/s 12A and u/s 80G(5) of the Act. In view of the facts, it was submitted that the delay in filing appeal was not intentional and assessee was prevented by sufficient and reasonable cause for not filing the appeal in time.
The learned Commissioner of Income-tax - Departmental Representative (ld. CIT-DR) for the revenue submitted that the Bench may decide the application as deemed proper.
We have considered the reasons given by the ld. AR and perused the accompanied documents along with the affidavit. We find that the delay in filing the appeal was not deliberate and intentional on the part of assessee. Moreover, the assessee is not going to be benefitted by filling appeal belatedly. It is now fairly settled that when technical consideration and cause to1308/SRT/2024 Shardaben Arjanbhai Dholakiya of substantial justice are pitted against each other, the cause of substantial justice may be preferred. Hence, delay in filling the appeal is condoned and we proceed to decide the case on merit.
The grounds of appeal
raised by the assessee in are as follows: “1. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax has erred in rejecting the application of assessee for registration u/s 12AB of the Act.
2. It is therefore prayed that registration u/s 12AB may please be allowed.
3. Appellant craves leave to add, alter or delete any ground(s) either before of in the course of the hearing of the appeal.”
6. The grounds of appeal raised by the assessee in are as follows: “1. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Exemption), Ahmedabad has erred in rejecting assessee’s application in Form No.10Ab for registration u/s 80G(5)(iii) on the ground that assessee’s application for registration u/s. 12AB was rejected. Assessee submits that the assessee has filed for separate appeal against the refusal of registration u/s 12AB by Ld. CIT(Exemption).
2. It is therefore prayed that order of CIT(Exemption), passed u/s 80G(5) of the I.T. Act, 1961 may please be set aside to the file of CIT(Exemption) with appropriate direction.
3. Appellant craves leave to add, alter or delete any ground(s) either before of in the course of the hearing of the appeal.”
7. The grounds of appeal raised by the assessee in are as follows:
1. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax has erred in rejecting the application of assessee for approval u/s 80G(5) of the Act. to1308/SRT/2024 Shardaben Arjanbhai Dholakiya 2. It is therefore prayed that approval u/s 80G(5) may please be allowed. 3. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.”
8. The assessee filed application for registration of the trust under sub- clause (iii) of clause (ac) of sub-section (1) of section 12A in Form No.10AB of the Act. The CIT(E) issued notice on 23.08.2024 and in absence of various details, he rejected the application of the assessee as premature and non- maintainable. He stated that the assessee was not provisionally registered u/s 12AB of the Act.
Aggrieved by the order of CIT(E), the assessee filed appeal before the Tribunal. The learned Authorized Representative (ld. AR) submitted that the action of the CIT(E) is not correct as assessee filed Form No.10A earlier on the wrong code i.e., ‘10’ instead of ‘01’. This was a bonafide mistake committed by the assessee through inadvertence. He submitted that Form No.10A is common for both section 10(23C) and 12AB of the Act and, hence, all details were filed correctly for obtaining provisional approval u/s 12AB of the Act. The CIT(E) failed to point out any deficiency in details filed for obtaining provisional registration. He placed reliance on the decisions in cases of Mandava Foundation vs. CIT(E), (Hyderabad – Trib.), Parmeshwari Bai Memorial Trust vs. CIT(E), 161 taxmann.com 311 (Orissa) and Rambha Charitable Trust vs. CIT(E), ITA No.5111/Mum/2024 (Mumbai – to1308/SRT/2024 Shardaben Arjanbhai Dholakiya Trib.). He submitted that the application for registration may be restored to the file of CIT(E).
On the other hand, the learned Commissioner of Income-tax - Departmental Representative (ld. CIT-DR) for the revenue supported the order of CIT(E).
We have heard both parties and perused the materials available on record. We have also deliberated on the decisions relied upon by the ld. AR. We find that the CIT(E) has issued only one notice on 23.08.2024 and proceeded to decide the appeal on the basis of the details available on record. The ld. AR submitted that all details are available with the appellant. Considering the above facts, we are of the view that the principle of natural justice has not been adhered to the instant case. It is settled law that principle of natural justice requires that the affected party is granted sufficient opportunity of being heard to present his case. Therefore, without delving deeper into the merits of the case, in the interest of justice, we restore the matter back to the file of CIT(E) for de novo adjudication and pass a speaking order after affording sufficient opportunity of being heard to the assessee. The assessee is directed to furnish its submission and relevant details/documents before the CIT(E). For statistical purposes, the appeal of the assessee is treated as allowed.
In the result, appeal filed by the assessee is allowed for statistical purposes.