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Facts
The assessee, Khambla Gram Vikas Samiti Trust, applied for registration under Section 12AB of the Income Tax Act, 1961. The application was rejected by the CIT(Exemption) due to non-submission of documentary evidence to prove the genuineness of activities. The assessee filed an appeal against this order.
Held
The Tribunal noted that the delay in filing the appeal was due to the tax consultant's pregnancy, which prevented timely compliance with notices. The Tribunal condoned the delay, considering it a genuine reason and a matter of natural justice. The appeal was set aside and remanded to the assessing officer for fresh adjudication.
Key Issues
Whether the rejection of registration under Section 12AB was justified without affording sufficient opportunity and considering the circumstances of the tax consultant's unavailability.
Sections Cited
12AB, 12A, Rule 17A
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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: DR. ARJUN LAL SAINI & SHRI DINESH MOHAN SINHA
O R D E R Per, Dinesh Mohan Sinha, JM: This appeal is filed by the Assessee as against the Rejection order dated 25.03.2023 passed by the Commissioner of Income Tax (Exemption), Ahmedabad denying Registration under section 12AB of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) in form 10AB under Rule 17A of the I.T. Rules, 1962.
(ITA 2. Grounds of appeal raised by the assessee, are as follows:
1. 1. 1. 1. That, the learned CIT(Exemption) has failed to grant proper opportunity of being heard and has wrongly rejected the application filed in form no. 10AB for granting registration u/s 12A of the I.T. Act, 1961.
That, the findings of the learned CIT, Exemption are not justified in law as well as facts of the case and required to be deleted.
The appellant craves to add, alter, amend or delete any of the above grounds of appeal.”
3. At the outset, that the appeal filed late by 740 days. The Ld. AR of the assessee has filed an application for condonation of delay, supported by Affidavit. The relevant contention of the application for delay, is as under: “4. That, CA Ms. Saumya Khatri, the consultant of our trust was pregnant during the relevant period. Due to crucial pre and post pregnancy period of the consultant of our trust, it was difficult for our consultant to manage both professional and personal affairs. The copy of the Medical Report and Birth Certificate are also enclosed herewith for your kind perusal.
In addition, our village Khambhla is a very small Village in Nakhatrana Taluka in Kachchh District of Gujarat. The Courier/Post reach to our village very late & sometimes we do not also receive postal letter from post office. As mentioned in Order that Centralized communication letter was sent through speed post and delivered on 14/11/2023, but the letter was received by third party and we were totally unaware about this letter.
6. Moreover, we all trustees are not qualified enough to understand the legal compliances and are not aware of provisions of Income Tax Act and another consultant appointed by us was also negligent in his duties and failed to inform us about the issuance of the rejection order in Form No. 10AD. As a result, we were unable to file the appeal within the prescribed time. However, as soon as we became aware of the matter, we are now promptly submitting this appeal before your Honour.”
During the course of hearing, the Ld. AR submitted that the consultant of our trust was pregnant during the relevant period. Due to crucial pre and post pregnancy period of the consultant of our trust, the consultant could not comply with the notices. The copy of the Medical Report and Birth Certificate are submitted in Paper-Book before the Tribunal. However, the Ld. AR of the assessee prayed for one more opportunity to be given to the assessee to represent the case before the lower authority.
5. On the contrary, the Ld. Sr. DR for the revenue relied on the order of the Ld. CIT(A) and not objected to the prayer of the Ld. AR of the assessee.
We have heard both the parties and perused the material available on record. We note that the consultant of our trust was pregnant during the relevant period. Due to crucial pre and post pregnancy period of the consultant of our trust, the consultant could not comply with the notices. After considering the reason explained by the Ld. AR. In the interest of justice, we take a judicious view that we condoned the delay in filing appeal by 307 days, and appeal filed by the assessee heard on merit.
Brief facts of the case that the appellant is trust namely Khambhla Gram Vikas Samiti Trust incorporated at Kutch in the year 2019. The appellant trust has undertaken various activities such as education to children, medical relief, financial relief to poor, providing food and shelter to people including saints/mocks belonging to any cast/community/religious or helping other trust having similar objects and engaged in carrying on various charitable activities. The appellant trust has applied for registration u/s 12AB of the I.T. Act, 1961 vide Form no. 10AB on 29/09/2022. However, same was rejected by the Ld. CIT (Exemption) vide order dated 25/03/2023stating that the appellant trust has failed to submit any documentary evidence to satisfy about the genuineness of the activities in consonance with its objects, the Ld.CIT(E) has rejected the application filed in Form no. 10AB.
The Ld. CIT(E) stated that the application has been merely rejected on the basis of non-submission of documents in support of registration application. In addition, the Ld.CIT(E) stated that the objects of the trust cannot be verified since the appellant trust has duly submitted the Trust deed, Memorandum of Page 3 of 5 Association, undertaking, declaration and Audited financial statements to prove the genuineness of the activities carried out by the appellant trust.
That the assessee has challenge the legality and validity of impugned order dated 25.03.2023 of the Ld. CIT(E) by filing the appeal before us.
During the course of hearing, Ld. AR submitted that the consultant of the appellant was pregnant during that period of assessment proceeding, which resulted in an inability to comply with the prescribed deadline. This genuine and unforeseen circumstance led to non submission of documents as required by the Ld.CIT(E) within the stipulated timelines. The copy of the Medical Report and Birth Certificate are also placed on paper-book. Therefore, non- submission of accounts cannot be viewed as deliberate. That the Ld. AR further prayed that one more opportunity should be given to the assessee to file relevant documents in support of the application.
On the contrary, the Ld. DR for the revenue relied on the order of the Ld. CIT(E). however, the Ld. DR did not objected the prayer of the Ld.AR.
We have heard both the parties and perused the material available on record. We note that the appellant is a renowned charitable trust and is known for undertaking various charitable activities enacted for the benefit of public at large. The trust is registered under Gujarat public trust Act on 25/04/2019. It was also stated that the books of accounts are duly audited by the qualified Chartered Accountant. To prove the genuineness of the facts require documents were submitted before us in the form of paper-book. We perused the medical certificate placed on record, we note that the assessee could not comply with the term of notice because the tax consultant of trust was pregnant during the relevant period. Considering the above facts and Page 4 of 5 circumstances, we note that the assessee has not given sufficient opportunity and assessee could not plead successfully before the Ld.CIT(E). We note that it is settled law that principles of natural justice and fair play require that the affected party is granted sufficient opportunity of being heard to contest his case. Therefore, without delving much deeper into the merits ofthe case, in the interest of justice, we restore the matter back to the file of assessing officer for de novo adjudication and pass a speaking order after affording sufficient opportunity of being heard to the assessee, who in turn, is also directed to contest his stand forthwith. Therefore, we deem it fit and proper to set aside the order of the ld. CIT (A) and remit the matter back to the file of the assessing officer to adjudicate the issue afresh on merits. For statistical purposes, the appeal of the assessee is treated as allowed.
In the result, the appeal of the assessee is allowed, for statistical purposes. Order pronounced in the open court on 26/12/2025.