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Facts
The assessee, City Managers Association Rajasthan, filed an appeal against the order of the CIT(E) rejecting its application for registration under Section 12AB. There was a delay of 42 days in filing the appeal, which was attributed to a change in office bearers and oversight. The CIT(E) had rejected the application due to non-submission of required documents and lack of genuineness of activities.
Held
The Tribunal condoned the delay in filing the appeal, noting that the reasons provided were meritous. The Tribunal found that the CIT(E) had passed an ex-parte order despite giving opportunities and that the assessee's earlier counsel could not adequately represent the case. Therefore, the matter was restored to the CIT(E) for a fresh decision on merits, with a direction to provide one more opportunity of hearing to the assessee.
Key Issues
Whether the delay in filing the appeal is condonable and whether the CIT(E) erred in rejecting the application for registration under Section 12AB without providing adequate opportunity.
Sections Cited
12AB, 253(5), Limitation Act, Section 5
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”A” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 798/JPR/2024
fu/kZkj.k o"kZ@Assessment Year : 2024-25 cuke City Managers Association Rajasthan The CIT (Exemption) Directorate, Urban Local Bodies Vs. Jaipur Rajmahal Residency, Jaipur LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAEFC 2199L vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby : Shri Saurav Harsh, Advocate jktLo dh vksjls@Revenue by: Shri Arvind Kumar, CIT-DR lquokbZ dh rkjh[k@Date of Hearing : 17/10/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 03 /12/2024 vkns'k@ORDER PER: DR. S. SEETHALAKSHMI, J.M. This appeal filed by the assessee is directed against order of the ld. CIT(E) dated 17-02-2024, for the assessment year 2024-25 raising therein following ground of appeal. ‘’That in the facts and in circumstances of the case and in law the ld. CIT (E) has grossly erred in rejecting the application of the assessee u/s 12AB of the Act.’’ CITY MANAGERS ASSOCIATION RAJASTHAN, JAIPUR VS CIT (E), JAIPUR 2.1 At the outset of hearing of the appeal, the Bench noticed that there is delay of 42 days in filing the appeal by the assessee-association for which the authorized signatory of assessee-association has filed an application for condonation of delay with following prayer. ‘’Application for condonation of delay u/s 253(5) of the Income tax Act, 1961 read with section 5 of Limitation Act in filling of appeal Hon'ble Sir/Madam, The humble assessee appellant applicant respectfully prays for the condonation of delay in the filling of appeal for the following reason:
1.
City Managers Association Rajasthan is a not for profit association controlled & governed by the Government of Rajasthan and was established to promote excellence in city management for enhanced quality of urban life through responsive, transparent and accountable governance. All Municipal Corporations, Municipal Councils, Municipalities, Urban Improvement Trust, Development Authorities situated in the state of Rajasthan, Rajasthan Housing Board and Directorate of Local Bodies are primary members of the assessee appellant association and Commissioner/Chief Secretary of the relevant department has been appointed as office bearers of the assessee appellant association.
2. The Id. CIT-Exemption, Jaipur passed impugned order on 17.02.2024 and the same was uploaded on the income tax portal of the assessee appellant. However, due to frequent change in the office bearers of the association the same was overlooked by the assessee appellant. The assessee came to know about the assessment order in the month of April when his newly appointed counsel checked the demand status of the assessee appellant and updated the same to assessee appellant.
CITY MANAGERS ASSOCIATION RAJASTHAN, JAIPUR VS CIT (E), JAIPUR 3. That subsequently the impugned order communicated to the assessee appellant. Thereafter, the assessee appellant directed Shri Siddharth Ranka, Advocate to take further action against the order dated 17.02.2024. On his opinion, without any further delay, at the first opportunity, the assessee with the help of his counsel has filed this appeal before the Hon'ble Income Tax Appellate Tribunal, Jaipur Bench, Jaipur with delay.
An Affidavit duly sworn in this regard is also enclosed herewith. With this background, we request your honour to take stock of the situation in totality, take a lenient and human approach towards the humble assessee appellant as the delay was not intentional and lack of understanding of the income tax proceedings. The assessee appellant applicant shall be more vigilant about is obligation in future. That in these circumstances we request your honour's to kindly condone the delay and oblige.’’ To this effect, the assessee has filed an affidavit deposing the above facts. 2.2 On the other hand, the ld. DR submitted that the Court may decide the issue as deem fit and proper in the case. 2.3 The Bench heard both the parties and perused the materials available on record. From the submissions of the ld.AR of the assessee, it is noticed that there is delay of 42 days in filing the appeal by the assessee, however, the reasons as explained by the ld.AR of the assessee in his application for condonation of delay in filing the appeal has merit and thus the delay is condoned.
CITY MANAGERS ASSOCIATION RAJASTHAN, JAIPUR VS CIT (E), JAIPUR 3.1 Apropos solitary ground of the assessee, the Bench noted that the ld.CIT(E) has cancelled the registration of the assessee –association by observing as under:- 4.1…. However, the applicant has failed to comply with the letters, despite being given three opportunities details of which given in para- 1.
All the above details were sought in order to determine the actual working of the institution. The applicant didn't furnish the sought details. The applicant has not furnished the details along with bill/ vouchers of expenses debited in income and expenditure account for the last three financial years. Further, the assessee was also not submitting the details of bank account for last three financial years. The above details were sought from the applicant to determine the actual purpose/ nature of expenditures made and to determine whether the impugned charitable activity had actually been done by the trust or not. Such type of verification is necessary to keep a check and balance on the actual working of the trust. Since, the applicant didn't furnish sought details, in the absence of such documents/details, the justification of impugned activity could not be derived and it is not known whether the applicant is genuinely carrying out charitable activity as per its objects. Hence, the applicant has failed to justify the genuineness of activities and thus falls out of the scope of registration u/s 12AB of the Act.
05. In view of above discussion assessee's claim of registration section 12AB is liable to be rejected and thus being rejected on following grounds: -
Incomplete Form 10AB & non submission of deed. Rajasthan Public Trust Act, 1959. Genuineness of Activities.
06. Further 12AB (1)(b)(ii)(B) of the Income Tax Act, 1961 also state that if CIT is not satisfied has to pass order rejecting such application and also cancelling its earlier registration. Thus, it is clarified that applicant's provisional registration under clause (vi) of clause (ac) of sub-section (1) of section 12A of the Income Tax Act. 1961 dated CITY MANAGERS ASSOCIATION RAJASTHAN, JAIPUR VS CIT (E), JAIPUR 06.04.2022 is also being cancelled. Further assessee has failed to give proper justification for regularisation of provisional registration, thus with this order provisional registration is also lapsed and cancelled.’’ 3.2 During the course of hearing, the ld.AR of the assessee submitted that the ld.CIT(E) has passed an ex-parte order and the assessee may be provided one more opportunity to advance his submissions before the ld. CIT(E) as the earlier counsel could not pursue the case before the ld. CIT(E) and also could not submit the desired information.. 3.3 On the other hand, the ld. DR supported the order of the ld. CIT(E). 3.4 We have heard both the parties and perused the materials available on record. In this case, it is noticed that the ld.CIT(E) has passed an ex-parte order. It is noted that the ld.CIT(E) had given one more opportunity to the assessee vide his office Notice dated 10-02-2024 to submit complete details/ information by 15-02- 2024 but the assessee had not produced any details / documents. Therefore, the case was decided on the basis of material filed by the assessee alongwith application in Form No.12AB. Thus the ld. CIT(E) rejected the claim of registration u/s 12AB of the Act on the following grounds:-
Income Form
10. AB & non-registration of deed Rajasthan Public Trust, 1959 Genuineness of Activities CITY MANAGERS ASSOCIATION RAJASTHAN, JAIPUR VS CIT (E), JAIPUR The Bench noticed that it is an admitted fact that the assessee is ex-parte before the ld. CIT(E) as the earlier counsel did not furnish the details as sought by the Department and thus the according to the ld.CIT(E), the assessee had failed to justify the genuineness of the activities of the association . Therefore, he could not put forth his proper defence. It was the bounded duty of the assessee to appear before the statutory authorities as and when called for. It is noticed that various opportunities were provided to the assessee for settling the issue but the assessee remained lethargic and unserious in pursuing his case. However, the Bench is of the view that lis between the parties has to be decided on merits so that nobody’s rights could be scuttled down without providing opportunity of being heard to the assessee. Hence, the matter is restored to the file of the ld. CIT(E) to decide it afresh by providing one more opportunity of hearing, however, the assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings. Thus the appeal of the assessee is allowed for statistical purposes. 3.5 Before parting, we may make it clear that our decision to restore the matter back to the file of the ld. CIT(E) shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by ld. CIT(E) independently in accordance with law.
CITY MANAGERS ASSOCIATION RAJASTHAN, JAIPUR VS CIT (E), JAIPUR 4.0 In the result, the appeal of the assesee is allowed for statistical purposes Order pronounced in the open court on 03 /12/2024.
Sd/- Sd/- ¼jkBksM deys'kt;UrHkkbZ ½ ¼MkWa-,l-lhrky{eh½ (RATHOD KAMLESH JAYANTBHAI) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;dlnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 03 /12/2024 *Mishra आदेश की प्रतिलिपिअग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू The Appellant- M/s. City Managers Association, Jaipur. 1. 2. izR;FkhZ@ The Respondent- The CIT(E), Jaipur 3. vk;djvk;qDr@ The ld CIT 4. विभागीय प्रतिनिधि] आयकरअपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZQkbZy@ Guard File ( By order, सहायकपंजीकार@Aेेजज. त्महपेजतंत