Loading judgment…
Facts
The assessee filed an appeal against the order of the CIT (E) rejecting their application for approval under Section 80G(5)(iii) of the Act. The appeal was filed belatedly by 417 days. The delay was attributed to incorrect advice from legal consultants and technical glitches in the online portal.
Held
The Tribunal condoned the delay, stating it was not wilful and occurred due to incorrect advice and technical issues. The Tribunal noted that notices were not served properly as per Section 282 of the Income Tax Act and violated principles of natural justice.
Key Issues
Whether the delay in filing the appeal can be condoned, and whether the rejection order was passed in violation of natural justice due to improper service of notices.
Sections Cited
80G(5)(iii), 282, 12A(1)(iii)(ac), 80G(5)(ii)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: SH. UDAYAN DASGUPTA & SH. KRINWANT SAHAY
This appeal is filed by the assessee against the order of ld. CIT (E) Chandigarh, dated 13/01/2023, rejecting the application in form 10AD, for approval u/s 80G(5)(iii) of the Act 61, in absence of any response to various notices issued by the Sharan Foundation v. CIT (E) ld CIT (E), for verification of the genuineness of the activities and fulfilment of all conditions laid down under clause (i) to (v) of the section.
2. Condonation of delay: It is pointed out by the registry that this appeal is filed belatedly by 417 (four hundred seventeen) days. The assesseehas filed an application for condonation of delay along with an affidavit explaining the delay that application for approval has been filed in form 10AB on 9th July, 2022, which has been rejected vide order dated 13th January, 2023, which was received by the assessee on 16th January, 2023, against which appeal should have been filed within sixty days, but the same was actually filed on 4th May, 2024, belated by 417 days. It is explained that on receipt of the rejection order on 16/01/2023, the assessee, on advise of his legal consultant has submitted a fresh application in form 10AD on 13/01/2023, (enclosed pb page 19-27) under section code 12A(1)(iii)(ac)) , and waited for its outcome and the assessee was repeatedly informed by the authorised counsel that due to technical glitches in the portal the fresh registration could not be done . Subsequently , after change of legal advisors , fresh application in form 10AD has been filed again on 19th January, 2024 ( enclosed pb page 28-36) this time under section code 80G(5)(ii)), again under wrong advise. Thereafter, waiting for a considerable period of time, this appeal has been filed by the assessee before this tribunal (this time on correct advise), belatedly. The Ld AR of the assessee submitted that in the instant case there has not been any wilful neglect on the part of the assessee and the delay has occurred has not been sitting ideal after the rejection order, but was constantly trying various means and avenues by filing fresh applications for approval on advise of professionals, which turned out to be ill advised. He further submitted that the assessee has not gained anything in filing this appeal late and has relied on the judgment of the Hon’ble Apex court in the case of Collector Land Acquisition, Anantnag & ….. vs Mst.Katiji & Ors on 19 February, 19871987 AIR 1353. As such he prayed that the delay in filing this appeal being unintentional and not wilful, the same may please be condoned and the appeal may please be admitted to be heard on merits. The Ld DR has not filed any objection.
Considering the reasons we find that the delay has occurred due to incorrect advice by the counsels and the same was not intentional on the part of the assessee, and as such the delay is condoned and the appeal is admitted to be heard on merits.
The grounds of appeal taken by the assessee in form 36 are as follows:
“1. Whether order passed by ld. CIT(E) in Form No. 10AD is liable to be set aside on Principle of Natural Justice?
Whether mere uploading of notice on the e-filing portal without following the procedure established under section 282 of the Income Tax Act, 1961 read with Rule 127 of the Income Tax Rules, 1962 is bad in law and order passed thereafter is liable to be set aside?”
CIT (E), rejecting the application filed by the assessee u/s 80(G)(5) of the Act 61 , due to the reasons of non compliance to various notices issued on 6th September, 2022, then again on 10th November, 2022 and finally on 24th November, 2022 , by the registration authority. It was further submitted that all the notices issued from by Ld CIT ( E )has been uploaded in the departmental portal and notices has neither been sent through registered email nor any message has been received on the mobile contact number of the assessee. He further submitted that since no proper communication has been received from the office of the Ld CIT (E), proper opportunity of hearing has not been allowed to the assessee and as such the assessee was unable to submit the necessary documents and papers in compliance to the notice issued. He further relies on the decision of the coordinate bench in the case of Boccia sports Federation of India vs CIT ( E ) in dated 03/05/2024 and on the notification No 4/2017 [ DGIT (S) / DIT (S) – 3 AST / paperless assessment proceedings /96/2015-16 , to submit that notices should have been served as per procedure laid down u/s 282 of the Act 61 ( read with Rule 127 of the IT Rules 62) and in the instant case , the application in form 10AD made by the assessee on 09/07/2022, for approval u/s 80(G)(5) has been rejected without proper service of notice on the assessee, as per laid down procedure , and non service of the same has remanded to the Ld CIT ( E ) for fresh consideration.
The Ld DR relied on the order of the Ld CIT (E), but he had no objection if the matter is remanded back.
We have heard the rival submissions and considered the materials on record.
We find that in the instant case notices calling for verification of particulars of the trust was issued on three different dates , in the departmental portal but no notice has been served through the email id of the assessee, or by post and no electronic message has been communicated from the office of the Ld CIT ( E ) either , which is not as per procedure laid down for service of notice u/s 282 of the Act and it does not tantamount to authentication of notices and other documents as laid down u/s 282A of the Act ’61 . Moreover, as held by the Hon’ble jurisdictional High court in the case of Munjal BCU Centre of Innovation and Entrepreneurship v CIT (E) Chandigarh CWP No 21028-2023(O & M) dated 4th March, 2024, where it has been held that service through portal alone is not valid service and service is required to be made as per procedure laid down in section 282 of the Act 61 .
Moreover, we also observe that the final opportunity notice issued by the Ld CIT ( E ) on 24th November, 2022, fixing the date of compliance on 1st December, 2022 (within seven days time frame )where the assessee has partly responded , was proper compliance.
Respectfully following the law laid down by the Hon’ble jurisdictional High court in the case of Munjal BCU Centre of Innovation and Entrepreneurship v CIT (E) Chandigarh, (Punjab and Haryana), (supra), we are of the opinion that in the interest of justice the matter should be remanded back to the Ld CIT (E), for considering the application for approval filed in u/s 80(G)(5) of the Act, on merits of the case ( since we have not expressed any opinion on merits ) , and to proceed as per provisions of law and we also direct the assessee to fully cooperate by filing all necessary documents and particulars as called for vide various notices issued by the Ld CIT ( E ), for proper disposal of the application . The assessee shall be allowed proper and reasonable opportunity of being heard.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in accordance with Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 as on 13.03.2025