ATHITHEYAM NYAS,ANUPPUR vs. CIT (EXEMPTION) BHOPAL,, BHOPAL

The facts of the case are that the assessee applied in Form 10AB for registration under section 12AB. The ld. CIT (Exemption) records that he issued opportunity letters to the assessee for submission of various documents/details to enable him to process the said application and to verify the objects and activities of the assessee Nyas. He records the fact, that two opportunity letters were issued to the assessee on 3.01.2025 and 13.03.2025, but both remained uncompiled with, in substance. He submitted that while some reply was received in response to the notice dated 3.01.2025, when additional documents were sought, no response was received in reply to the notice dated 13.03.2025. The ld. CIT (Exemption) observed that the matter was getting barred by limitation on 31.03.2025, and therefore, the information was required in a time bound manner. However, the assessee did not furnish any reply. He noted that the assessee had failed to explain the reason for delay in Athitheyam Nyas filing Form 10AB, he had not justified the dissolution clause that allows distribution of assets and properties generated out of public money by the Trust among its Settlers / President / heirs and the trust deed not being irrevocable. The ld. CIT (Exemption) further observed, that the assessee was engaged in running a hotel on commercial basis. It was not a Dharamshala for charitable purposes and as per the Audit Report, the assessee had generated revenue of Rs. 36,23,937/- from staying charges during F.Y. 2023-24. He had asked for a rate list, but the assessee had omitted to provide the same. In view of these aforesaid details mentioned above, the genuineness of the charitable activities claimed by the assessee for the general public could not be ascertained and therefore, the ld. CIT (Exemption) declined to grant the registration under section 12AB of the Act. He also cancelled the provisional registration granted earlier.

Aggrieved by this order, the assessee has come in appeal before us. Sh. P.C. Bardia and Sh. Rahul Bardia, C.As. representing the assessee pointed out, that without giving proper opportunities and also without considering the reply that had been e-filed / emailed on 20.03.2024, the ld. CIT (Exemption) had erred in cancelling the registration of the assessee Nyas and refusing the registration under section 12AB. It was submitted that the assessee had filed a fresh Form 10AB on 18.03.2025 and a detailed reply on 20.03.2025 to the final notice dated 13.03.2025. It was submitted that the said notice had only given time upto 18.03.2025 which was insufficient as the festival of Holi fell in between and therefore, the rejection order was invalid for want of proper opportunity. Furthermore, the ld. CIT (Exemption) had erred in not considering the fact that the assessee trust had commenced activity on 15.05.2023 and provisional registration had been granted on 28.11.2023, that was valid upto A.Y. 2026-27. Thus, the time limit to file Form No. 10AB (which was filed on 23.09.2024) within six months of commencement of activity (which was Athitheyam Nyas extended upto 30.06.2024) was not mandatory, being a procedural mistake supported by genuine hardship in electronic filing. Hence, the alleged delay of 84 days ought to have been condoned as provided under the proviso to section 12(A)(vi). The assessee placed reliance on the orders of the ITAT in Grow Foundation case in and Birmani Charitable Trust in ITA No. 113/PAN/2024.

On the other hand, Sh. Shravan Kumar Meena, CIT DR (hereinafter referred to as the ld. DR) submitted that the assessee had not made proper compliance before the ld. CIT (Exemption) and the ld. CIT (Exemption) had observed several discrepancies in the objects of the assessee Nyas and therefore, appeared to be justified in rejecting the application of the assessee. However, he acknowledged the fact that the assessee had only been provided with two opportunities and limited time and therefore, did not have any objection to the matter being restored to the file of the ld. CIT (Exemption) for a decision on the merits of the case.

We have duly considered the facts and circumstances of the case. We notice from a perusal of the paper book submitted by the assessee, that the assessee had submitted a mail to the ld. CIT (Exemption), Bhopal on 20.03.2025 at 1.02 pm IST pointing out, that its reply could not be filed on 18.03.2025 due to the Holi holiday / Rangpanchmi and the reply window had been closed. Therefore, it was sending its reply by email which may please be considered. However, it seems that this reply of the assessee was not considered while passing the final order. Therefore, in the interest of natural justice, we deem it appropriate to restore this matter back to the file of the ld. CIT (Exemption), so that the ld. CIT (Exemption) may consider the reply filed by the assessee on email dated 20.03.2025 and also such other evidences which the assessee may like to produce in order to satisfy the ld. CIT (Exemption) with regard to its