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Facts
The appellant, a Charitable Trust, applied for regular registration under Section 12A(1)(ac)(iii) and approval under Section 80G(5)(iii) of the Income Tax Act. The CIT (Exemption) denied these applications via ex-parte orders dated 12.12.2024, after the appellant failed to provide complete information in response to a second notice due to a key trustee's serious health issues. There was also a delay of 152 days in filing the appeals to the Tribunal.
Held
The Tribunal condoned the delay in filing the appeals, accepting the 'reasonable cause' of the trustee's health issues. It held that the CIT (Exemption) deprived the appellant of a reasonable opportunity of being heard, thereby violating principles of natural justice. The Tribunal set aside the impugned orders and remanded the issues to the file of the CIT (Exemption) for de novo consideration, with instructions to provide a fair hearing.
Key Issues
Whether the ex-parte rejection of regular registration and 80G approval applications without granting sufficient opportunity to the appellant violated principles of natural justice; Whether the delay in filing appeals to the Tribunal should be condoned due to genuine difficulties.
Sections Cited
12A(1)(ac)(iii), 80G(5)(iii), 12AB
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Income Tax Appellate Tribunal, PUNE BENCHES “A”, PUNE
Before: DR.MANISH BORAD & SHRI VINAY BHAMORE
PER DR. MANISH BOARD, ACCOUNTANT MEMBER :
The captioned appeals at the instance of appellant is directed against the separate orders dated 12.12.2024 framed by CIT (Exemption), Pune denying applications filed for grant of regular registration u/s.12A(1)(ac)(iii) and for approval u/s.80G(5)(iii) of the Act.
Appellant has raised following grounds of appeal in these appeals :
: The following grounds are taken without prejudice to each other -On facts and in law,
11. The order passed u/s. 12AB of the Act is bad in law, since it is passed without following the principle of natural justice. The order of rejection may therefore kindly be set aside. 1.1] The Ld. CIT erred in passing the ex-parte order without even considering the submission filed by the assessee and even when ample of time was available with Ld. CIT to pass the order till 31.12.2024.
21 The Ld. CIT has erred in dismissing the case ex-parte without waiting for the appellant to furnish further submission and evidences. The Ld. CIT ought to have appreciated that the trustee of the appellant was senior citizen facing old age-related health issues and therefore could not compile the documents within prescribed time.
2.1] The Ld. CIT erred in dismissing the contention of the appellant only on the ground that no submission was made without appreciating the facts explained in initial submission filed before him. The matter may therefore please be set aside as it involves verification of evidences etc.
3) The Ld. CIT failed to appreciate that appellant trust was genuinely engaged into educational & other charitable activities and therefore, the approval u/s. 12AB ought to have been granted to the appellant trust.
4] The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.” :
“The following grounds are taken without prejudice to each other-On facts and in law, 1) The order passed u/s. 80G(5) of the Act is bad in law, since it is passed without following the principle of natural justice. The order of rejection may therefore kindly be set aside.
1.1) The Ld. CIT erred in passing the ex-parte order without even considering the submission filed by the assessee and even when ample of time was available with Ld. CIT to pass the order till 31.12.2024.
2] The Ld. CIT has erred in dismissing the case ex-parte without waiting for the appellant to furnish further submission and evidences. The Ld. CIT ought to have appreciated that the trustee of the appellant was senior citizen facing old age-related health issues and therefore could not compile the documents within prescribed time.
2.1] The Ld. CIT erred in dismissing the contention of the appellant only on the ground that no submission was made without appreciating the facts explained in initial submission filed before him. The matter may therefore please be set aside as it involves verification of evidences etc.
3] The Ld. CIT failed to appreciate that appellant trust was genuinely engaged into educational & other charitable activities and therefore, the approval u/s. 80G(5) ought to have been granted to the appellant trust.
4) The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.”
3. Registry has informed that there is delay of 152 days respectively in filing the instant appeals before this Tribunal. Appellant has filed a petition for condonation of delay explaining the reasons which led to delay and the same reads as follows :
“2] The appellant submits that the order denying/cancelling the approval u/s. 80G(5) was passed by the Ld. CIT (Exemption), Pune on 12.12.2024. It may kindly be noted that one of the trustees of the appellant trust i.e. Mr. Vasant Sojwal was undergoing medical treatment and was advised complete bed rest for a substantial period of more than 5-6 months during the relevant time. The trustee underwent a cardiac treatment for implantation of permanent pacemaker. Due to this, the trustee was unable to attend to the regular affairs and compliance matters of the trust. He was responsible for income tax registration related compliances. During this period, there was no other person available to manage the registration related responsibilities of the trust. The other trustees of the trust were unaware about the approval related procedures. They were not even aware about the passing of said order dated 12.12.2024 wherein the appellant trust's application for approval was rejected. It was only when the aforesaid trustee resumed his duties that they came across the said order and realized the importance of the matter. The appellant trust immediately appointed another consultant to take necessary action for filing of appeal.
3] The appellant has now filed a further appeal before the Hon. ITAT after a gap of approx. 5-6 months. It is in view of the above- mentioned facts that there is delay of approx. 171 days in filing of appeal before Hon. ITAT. The delay was purely on account of genuine difficulty mentioned above. There was no mala-fide intention in delayed filing of appeal. The appellant submits that there is a reasonable cause in not filing the appeal within the prescribed time limit and hence, the appellant requests for condonation of delay in filing the appeal. A copy of the medical certificates and documents evidencing the treatment and condition of the trustee during the relevant period are attached herewith for your verification.
In view of the above, it is humble prayer before the Hon. ITAT Bench to kindly condone the delay and grant an opportunity of being heard on merits.”
After hearing both the sides and perusing the averments made in the condonation petition, we are satisfied that ‘reasonable cause’ prevented the appellant in filing the instant appeals within the stipulated time. We find the delay in filing the appeals is not intentional and appellant would not have gained by delaying the filing of appeals. We therefore taking justice oriented approach and following the judgments of Hon’ble Supreme Court in the case of Collector, Land Acquisition, Anantnag & Anr. Vs. Mst. Katiji & Ors. reported in (1987) 2 SCC 107 and in the case of Inder Singh Vs. State of Madhya Pradesh judgment dated 21.03.2025 (2025 INSC 382). condone the delay of 152 days in filing the appeals before this Tribunal and admit the appeals for adjudication.
Tersely stated, the common facts emanating from the record are that the appellant is a Charitable Trust formed with the object of providing relief to the poor, education, medical relief, preservation of Environment etc. Appellant was granted provisional registration on 02.10.2021 which was valid upto 31.03.2024. Pursuant to such provisional registration, appellant trust filed applications on 26.06.2024 and 27.06.2024 seeking grant of regular registration and approval under the respective sections. In order to verify the genuineness of activities of the appellant trust, the ld. CIT (Exemption) issued notices dt. 22.07.2024 and dt. 26.07.2024 through ITBA portal calling upon the appellant trust to file certain information/clarification. The appellant submitted the requisite details. Thereafter, ld. CIT (Exemption) issued another notice dated 29.11.2024 pointing out certain discrepancies in the details so submitted. Appellant was required to comply with the said notice on or before 06.12.2024. However, appellant could not furnish any reply to the second notice. In the circumstances, the ld. CIT(Exemption) rejected the twin applications filed by the appellant.
Being aggrieved by the rejection of the applications the appellant trust preferred the present appeals before this Tribunal assailing the impugned order passed by ld.CIT(Exemption).
Before us, the ld. AR submitted that appellant trust is genuinely engaged into educational and other charitable activities and has stated that appellant submitted partial information before ld.CIT(E) in response to the first notice. However, the appellant failed to submit the required evidences/documents called for by the Ld.CIT(Exemption) as the trustee who is a senior citizen was suffering from age related issues and was advised bed rest and therefore it could not comply with the second notice. The appellant has all the evidences to substantiate the charitable activities. Therefore, in the interest of justice, ld. Counsel for the appellant prayed for remanding the matters to the file of ld.CIT(Exemption) for furnishing the requisite documents/evidences.
On the other hand, the ld. DR relied on the order of ld. CIT(Exemption).
We have heard the rival submissions and perused the relevant material on record. We find that, in the instant case under consideration, the appellant trust filed applications seeking regular registration u/s.12A of the Act and approval u/s.80G(5) of the Act. Appellant made partial compliance to the first notices issued by ld.CIT(Exemption), however, it failed to comply with the second notices issued by ld.CIT(Exemption). We note that ld.CIT(E) issued second notice on 29.11.2024 through ITBA portal requesting the appellant trust to file compliance on or before 06.12.2024. Perusal of impugned orders under challenge would reveal that ld.CIT(Exemption) has provided much less opportunity to furnish the further details and to negate the adverse inference drawn by ld.CIT(Exemption). This inaction of ld.CIT(Exemption) deprived the appellant from reasonable opportunity. In this regard, we would like to take note of the judgment of Hon’ble Patna High Court in the case St. Paul’s Anglo Indian Education Society (2003) 263 ITR 377 (Patna) wherein the Hon’ble Court held that “opportunity of being heard should be real, reasonable and effective and same should not be empty formalities, it should not be a paper opportunity, the doctrine of natural justice is a facet of fair play in action and no person shall be saddled with a liability without being heard”. Following the ratio laid down in the above judgment, we hold that rejection of applications of the appellant is unjustified as the appellant was deprived of reasonable opportunity and time to produce the relevant documents to substantiate its claim and therefore the appellant deserves an opportunity of being heard.
We therefore set aside the impugned findings of ld.CIT(Exemption) in the instant appeals and remand the issues raised in the instant appeals to the file of ld. CIT(Exemption) for denovo consideration of applications. Needless to mention that ld.CIT(Exemption) shall afford reasonable opportunity of hearing to the appellant in the set aside proceedings. Effective grounds of appeal raised by the appellant in the instant appeals are allowed for statistical purposes.
11. In the result, both the appeals filed by the appellant are allowed for statistical purposes.
Order pronounced on this 06th day of January, 2026.