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Facts
The assessee, Kamla Foundation, filed two appeals against the denial of registration under section 12AB and recognition under section 80G. The appeals were filed with a significant delay of 308 days. The assessee claimed the delay was due to a pending rectification application which was not disposed of by the CIT(E).
Held
The Tribunal acknowledged the delay but noted that the assessee is a charitable trust and that the rejection order was passed without considering crucial details submitted by the assessee. The Tribunal held that non-consideration of the assessee's submission caused prejudice, and therefore, the appeals are admitted.
Key Issues
Whether the delay in filing the appeal should be condoned, and whether the denial of registration/recognition was justified without considering the assessee's submissions.
Sections Cited
12AB, 80G(5), 12A(1)(ac), 154
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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: SHRI PRASHANT MAHARISHI, AM & SHRI RAHUL CHAUDHARY, JM
These are two appeals filed by the Kamla Foundation for Assessment Year (A.Y.) 2024-25 one against denial of registration u/s 12 AB of the act and cancelling provisional registration and second against not granting recognition u/s 80G (5) of the Act.
Commissioner of Income Tax (Exemption) [CIT(E)], Pune dated 29.03.2023 wherein the application filed by the assessee in Form No. 10AB under Clause (iii) of Section 12A(1)(ac) of the Income Tax Act, 1961 (the Act) on 29.02.2022 was rejected and the provisional registration granted on 28.05.2021 was also cancelled.
The assessee has raised the solitary ground that submission dated 06.02.2023 and further refusing to rectify the error as per application dated 14.02.2024 has resulted into rejection of registration u/s. 12AB wrongly.
The assessee has stated that the appeal filed by the assessee is late by 308 days. The assessee explained that the order of the rejection was passed on 29.03.2023 without considering the details filed on 06.02.2023. Therefore, the assessee made an application for rectification on 13.02.2024 and also by speed post on 17.02.2024 and, therefore, the rectification application u/s. 154 of the Act was not disposed by the learned CIT(E), then assessee filed this appeal and therefore there is delay. Aassessee has preferred this appeal which is late by 308 days. The assessee has also submitted an affidavit showing that the pendency of the rectification application has caused delay in filing of the appeal, which is sufficient reason and, therefore, it should be condoned.
The learned Authorized Representative reiterated the same.
The learned Departmental Representative objected to the same stating that the order of the learned CIT(E), Pune was received on 29.03.2023 whereas the assessee made an application for rectification on 14.02.2024 i.e. after 11 months and assessee is showing that reason for delay in filing of the appeal. He specifically referred to Point No. 1 of the affidavit. Thus, he stated that there is no sufficient reason shown by the assessee from 29.04.2023 till 14.02.2024. Therefore, the delay may not be condoned.
We have carefully considered the rival contention and perused the application of the assessee for condonation of delay. The fact shows that the assessee is a charitable trust. The order of rectification undoubtedly was passed on 29.03.2023. It is also undisputed that the assessee filed an application for rectification of error only on 14.02.2024, therefore, in fact there is no justification or sufficient cause from 29.04.2023 till 14.02.2024. However, we find that by filing the application late the assessee has not got any benefit. In fact, if the assessee is not diligent about the limitation of time in pursuing his cause , he does not gain any advantage but he is at more disadvantage that he may lose as good case for bad reasons. However, looking to the peculiar facts of the case, where the claim of the assessee is that it has submitted certain details on 06.02.2023 which was not considered by the learned CIT(E) when the order of rejection was passed on 29.03.2023, it causes severe prejudice to the assessee. Even despite the making an application for rectification same has not been rectified. In view of these peculiar facts, we admit the appeal of the assessee.
The facts of the case shows that an application for registration was filed by the assessee, learned CIT(E) issued a notice on 10.01.2023. The assessee was asked to submit the information by 25.01.2023. The notice was served on the assessee through e-portal, email and speed post. Another notice was issued to the assessee on 29.01.2023 by show cause notice as to why the application should not be rejected. In absence of any information, the learned CIT(E) rejected the application. However, before us, the assessee has shown a letter dated 06.02.2023 which is placed at Page Nos. 76 to 78 of the paper book which is not at all being considered by the learned CIT(E). If assessee has filed some explanation which needs to be considered and then issue may be decided. Non consideration, if any submission is made from the assessee, causes severe prejudice to the assessee, which must be corrected.
Therefore, after hearing the parties, we restore the issue back to the file of the learned CIT(E) to consider the explanation furnished by the assessee on 06.02.2023 and decide the issue afresh. The learned CIT(E) may carry out any enquiry, in accordance with law for verification of the genuineness of the activities for the purpose of granting registration. It would be the duty of the assessee to show all the details and the genuineness of the activities. Thereafter, the learned CIT(E) may decide the issue afresh. In view of is also filed by the assessee for obtaining the recognition u/s. 80G of the Act. This application was also rejected vide order dated 29.03.2023 wherein the claim of the assessee is that it filed necessary details on 06.02.2023, which has not been considered. Therefore, for similar reasons as given in CIT(E) to consider the above explanation/submission and decide the issue afresh, in accordance with law. In view of this, filed the assessee is also allowed for statistical purposes.
In the final result, both the appeals filed by the assessee stand allowed for statistical purposes.
Order pronounced in the open court on 28/08/2024.