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Facts
The assessee, Alumni Association of Indubhai Parekh School, filed an appeal against the order of the CIT(E) rejecting their application for registration under Section 12AB of the Income-tax Act, 1961. The delay in filing the appeal was attributed to non-receipt of notices, which were only uploaded on the income tax portal.
Held
The Tribunal found that the delay in filing the appeal was not solely due to the assessee's fault, as notices were not properly served. The CIT(E) rejected the application without providing a reasonable opportunity for the assessee to present their case. The Tribunal condoned the delay and restored the matter for de-novo consideration.
Key Issues
Whether the delay in filing the appeal should be condoned and whether the CIT(E) erred in rejecting the registration application without proper service of notice.
Sections Cited
12AB, 12A, 17A
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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: DR. ARJUN LAL SAINI, AM. &
आदेश / O R D E R
PER DINESH MOHAN SINHA, JM:
Captioned appeal filed by the Assessee against the order dated 20.09.2023 in passed by the Ld. Commissioner of Income Tax (Exemption), (in short “Ld. CIT(E)”), Ahmedabad.
The Grounds of Appeal raised by the assessee are as follows:
1. The grounds of appeal mentioned hereunder are without prejudice to one another.
2. The Commissioner of Income Tax (Exemption) (hereinafter referred to as the "Ld. CIT(E)") erred on facts as also in law by not granting registration under section 12AB of the Income-tax Act, 1961 without providing reasonable opportunity of being heard to the appellant.
3. Ld. CIT(E) erred on facts as also in law in holding that the appellant has failed to file documentary evidences without considering the fact that the notices were only uploaded on the portal and not served to the appellant. The order of Ld. CIT(E) is baseless and totally unwarranted under the circumstances and facts of the appellant's case and deserves to be quashed and therefore may kindly be quashed.
That the assesse filed an appeal on 20.12.2024 against the order dated 20.09.2023 passed by Ld. CIT. The Ld. Counsel for the assessee stated that there is a delay of 396 days in filing the appeal, delay has occurred due to following relevant reasons:
“The appeal could not have been filed within the time allowed due to following reason:
The email address alumni@ipsarajkot.orgis registered email address in the income tax portal. However, the notices were not served on the email address and therefore, the appellant was unable to comply with the notices issued. (Copy of the screenshot of the income tax. portal relating to notices not served is attached.)
The Ld. Counsel of the assessee (AR), stated that because of no order served on the assessee on registered email or on physical mode order is received by the assessee. The assessee came to know about the order dated 14.09.2024. Hence the delay is not due to non-receipt of order the assessee hence delay may kindly be condoned.
On the other hand, Ld. D.R. objected the application for condonation of delay and prayed for rejection of the application and the appeal.
We have heard both the party and found that delay is not because of the assessee, since no order has been received by the assessee. And after receiving the order by the assessee, the assessee immediately file the appeal before this Tribunal. That the assessee has not given due care and attention towards this case. Keeping in view of the fact we impose a cost of Rs. 2000 to be deposited in Punjab national bank within 15 days from today. In view of the above circumstances and in interest of justice we are hereby condone the delay in filling the present appeal.
4.1 The appellant Trust was constituted under the Deed of declaration of Trust dated 11/12/2019 with the charitable object of imparting education. Soon after formation of the trust, the appellant Trust was granted registration under section 12A of the Income-tax Act, 1961 w.e.f 13/02/2020 by the Commissioner, which was before the insertion of section 12AA.of the Act Thereafter and by virtue of the amendment made by insertion of section 12AB requiring fresh registration with effect from 01/04/2021, the appellant trust, applied for the provisional registration on 23/03/2022 and provisional registration was granted on 30/03/2022 under section 12A(1)(ac)(vi) of the Act.
4.2 The brief facts of the case the application for registration of the trust u/s. 12AB of the I.T. Act, 1961 was filed electronically and as per data available in ITBA, the same is filed on 31/03/2023 by the assessee in Form No. 10AB under Rule 17A of the I.T. Rules, 1962. The Rule 17A(1) of the Income Tax Rules prescribes the different forms to be filed for making application under various sub-clauses of clause (ac) of sub- section (1) of section 12A of the Act for registration of a charitable or religious trust on institution.
A Notice was issued to the appellant on 22.07.2023 and 22.08.2023. In 6.1. response to the said notice, the applicant/assessee has not furnished any detail/document. Therefore, following the principle of natural justice, final opportunity was given to the applicant/assessee by issuing another notice on 12/09/2023, sent through ITBA to furnish certain details mentioned therein. However, the applicant/assessee has again not furnished any detail/ document as called for thereby implying that it has no intention to pursue the present application filed. Therefore, Ld. CIT(E) rejected the application of assessee, stating that assessee trust has not proved the genuineness of its activities and activities were not in accordance with objects of the trust.
As discussed above, the applicant/assessee has failed to file documentary evidences to enable me to satisfy about:
i. Genuineness of the activities of the trust or institution. ii. That the activities of trust or institution are in consonance with the objects of the trust or institution. iii. That other laws material for the purpose of achieving objects are complied with.
Therefore, the present application filed in Form No.10AB u/s 12A(1)(ac) (iii) of the Act is rejected and provisional registration is also cancelled.
6.3 Therefore, aggrieved by the above order of CIT(E), the assessee filed this appeal before the Tribunal.
Ld. A.R. submitted that the trust has been in existence from 11.12.2019 with the charitable object of imparting education. A trust has a registered office and a board of trustees, and it maintains proper accounts and records. A trust’s activities are genuine and are not for the benefit of any particular individual or group. The trust provides free education to poor children. The assessee further submitted that it was purely owing to the omission on the part of the assessee trust, that in spite of issuing notices by the Ld. CIT(E) on 22.07.2023 and 22.08.2023 and final notice on 12.09.2023. Asking for documents but the notices and its term remain uncompiled with notice. All the activities of the trust are in charitable activities, hence entitled to grant registration u/s. 12A. Hence it is submitted before us that if assessee given an opportunity to furnish all requisite documents before the CIT(E), so as to enable him to grant the necessary registration u/s. 12A of the Act. That the assessee trust could not comply with the notice issued by the Ld. CIT(E). The A.R. requested for an opportunity may kindly be provided to comply with the requirements. The A.R. of the assessee assured that the notice will be complied as required by the Ld. CIT(E) as and when the notice will be given to the assessee.
2 On the other hand, Ld. D.R. submitted that assessee has not submitted documents before Ld. CIT(E), prima-facie the contention of Ld. CIT (Exemption) that assessee has failed to produce relevant documents is correct in spite of adequate opportunity has been provided to the assessee trust non-cooperative attitude of the assessee trust for non-compliance of notice.
We have heard both the parties and perused the materials and documents available on record. We notice that CIT(E) has issued the notice dated 22.07.2023 & 22.08.2023 and final notice on 12.09.2023 asking for documents in support of the application for registration of the Trust under Section 12AB of the Act, 1961. The appellant Trust had applied for the registration of the Trust in Form 10AB on 31/03/2023 under section 12A(1)(ac) (vi) of the Act. The notice asking to furnish the details was issued on 22/07/2023, 22/08/2023 and 13/09/2023. The appellant trust was unable to comply with the notices as the notices were only uploaded on the income tax portal without actual service to the appellant trust. The email address alumni@ipsarajkot.org is registered email address in the income tax portal. However, the notices were not served on the email address. The postal address of the appellant i.e. V V P Parishar, Opp. Motel The Village, Kalawad Road, Vajdi Virda, Rajkot 360005 is also registered in the income tax portal. (Screenshot of profile page showing contact details is attached at pg. no. 115 & 116 of paper Book). The email address of the appellant trust had also reflected in its return of income filed for AY 2022-23 on 30/09/2022 (Copy of the return of income is attached at pg. no. 117 to 160 of paper book). However, the notices were also not served on the postal address and therefore, due to non-receipt of notices the appellant was unable to comply with the same. (Copy of the screenshot of the income tax portal relating to notices not served is attached at pg. no. 1 to 3 of Paperbook). That the assessee failed to comply with the terms of notice. Commissioner of Income Tax (Exemptions) without giving any further opportunity to the appellant and without issuing any show cause notice rejected the application of Registration of the appellant trust. The CIT(E) grievously erred in law as well as in fact by holding that that the appellant did not file any response and failed to furnish specific details which are essential to decide the application as per Income Tax Rule without considering the fact that no notices were served to the appellant trust neither in its email address nor on its postal address. Service of notice granting a reasonable opportunity of being heard is an essential element of all administrative decision-making. Looking to the activities carried out by the assessee trust and in the interest of justice since the matter has not been adjudicated on merit the matter is restored to the file of the Ld. CIT(E) for de-novo consideration in the application of registration of the Trust in accordance with law. That the assessee is also directed to submit the relevant documents and evidences as required by Ld. CIT(E) if any.
5 In the result, appeal of the assessee is allowed for statistical purpose.
6 In the result, the appeal filed by the assessee in is allowed for statistical purpose.
Order pronounced in the open court on 10/06/2025.