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Facts
The assessee's application for approval under Section 80G of the Income Tax Act was rejected by the CIT(E) for non-compliance and not proving the genuineness of activities. The assessee filed an appeal against this order, which was delayed by 197 days due to an inadvertent mistake in filing.
Held
The Tribunal acknowledged the delay in filing the appeal but condoned it, referencing the Supreme Court's decision in Collector, Land Acquisition vs. Mst. Katiji and Others. The Tribunal decided not to go into the merits of the case but restored the issue to the CIT(E) for a fresh examination, allowing the assessee an adequate opportunity to be heard.
Key Issues
Whether the delay in filing the appeal should be condoned and whether the CIT(E) correctly rejected the 80G approval application without affording sufficient opportunity.
Sections Cited
80G, 12AB
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”A” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, vk;dj vihy la-@ITA No. 405/JP/2024
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, vk;dj vihy la-@ITA No. 405/JP/2024 fu/kZkj.k o"kZ@Assessment Years : 2023-24 cuke Blossom CIT Vs. Siwar Area Krishna Marg Bapu (Exemption), Nagar Tonk Road, Jaipur Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AADTB 6816 C vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. Anoop Bhatia, CA jktLo dh vksj ls@ Revenue by : Sh. Arvind Kumar, CIT lquokbZ dh rkjh[k@ Date of Hearing : 29/05/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 02/07/2024 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM
This appeal filed by the assessee arising out of the order of the Commissioner of Income Tax (Exemption), Jaipur dated 20/07/2023 [here in after ld. CIT(E)] rejecting the claim of approval of assessee for section 80G of the Act.
2. At the outset of hearing, the Bench observed that there is delay of 197 days in filing of the appeal by the assessee for which the ld. AR of the prayers:
Vide letter dated 12.03.2024 the assessee contended as under: “Sub: Application seeking Condonation of delay - M/s Blossom In the aforesaid context, it is humbly submitted that the assessee trust had submitted a Form 10AB on 12-01-2023 before the Ld. CIT(Exemption) Officer. But inadvertently assessee was not able to make the compliance of the hearing notices which led to the rejection of Form 10AB on 20-07- 2023. Such order passed by Ld.CIT(A) was served on the appellant on 20-07-2023, thus the appeal against the said order was supposed to have been filed by the appellant by 18-09-2023, however the assesssee could not make an appeal within the prescribed time limit and got delayed by 127.. days, for the reasons as explained below:
1. 1. That the said memorandum of appeal was sent to me for signature and had to be forwarded to the counsel for further action, and inadvertently I could not send back the same on time, as the same got dumped under other papers on my desk.
2. That, on being reminded by the counsel, it was realized that appeal papers were omitted to be signed and dispatched, however by then due date of filing appeal had expired.
3. Thus, it is submitted that the delay in filing the appeal is solely attributable to inadvertent mistake on part of the principal trustee of appellant trust and is absolutely un-intentional and has occurred due to circumstances beyond the control of appellant.
4. An affidavit signed by the principal trustee of assessee trust deposing the above facts is enclosed herewith. In the circumstances of the matter it is humbly prayed to the Hon’ble Bench to please direct the condonation of delay which is merely of 197 days and to be kind enough to direct the listing of the appeal for disposal on the merits. Your kindness would go a long way to depart effective justice to the ignorant litigants.” Vide letter dated 13.04.2024 the assessee also submitted as under ;
3 Blossom vs. CIT(E) “With reference to the above mentioned case, filed before the Hon’ble bench defect has been pointed stating that the appeal is delayed by 197 days. In this regard we humbly submit that a delay condonation petition along with affidavit of the Trustee was already filled with the hardcopy of appeal memo on 02.04.2024. However we are once again enclosing the same in 3 copies. We request you to please take the same on record and remove the defect so pointed.”
2.1 The ld. AR of the assessee fairly admitted that the appeal could not made in time as the same was prepared and send to signature of principal trustee the same was dumped with the other papers and this inadvertent mistake has delay the filling of the present appeal which is delayed by 197 days. The ld. AR of the assessee also filed an affidavit of the trustee and the affidavit of the accountant and the affidavit of the counsel confirming that the memorandum of appeal in form no 36 sent to the client for signature and payment of appeal fees got mixed up in other documents of the principal trustee, due to which the delay in the present appeal.
3. During the course of hearing, the ld. DR objected to assessee’s application for condonation of delay stating that the reasons devoid of any merits and the appeal is required to be dismissed as not admitted. The affidavits relied upon by the though they have to file the appeal in time. So, considering that set of facts the appeal of the assessee is required to be dismissed.
We have heard the rival contentions of the parties and perused the materials available on record. The prayer by the assessee for condonation of delay of 197 days though lapses and latches on the part of the parties in preparation and filling the appeal in time but considering the only fact that the same was prepared and sent for signature and where the same was misplaced and the same is supported by the affidavit of the counsel and accountant. It is very elementary and well understood that courts should not adopt an injustice-oriented approach in dealing with the applications for condonation of the delay in filing appeals and rather follow a pragmatic line to advance substantial justice. Based on this aspect and considering the three affidavits filed the delay of 197 days in filing the appeal by the assessee is condoned in view of the decision of Hon’ble Supreme Court in the case of Collector, land Acquisition vs. Mst. Katiji and Others, 167 ITR 471 (SC) as the assessee is of the persons the institution should not suffer.
5. In this appeal, the assessee has raised following grounds: -
“1. Under the facts and circumstances of the case and in law Learned CIT, Exemptions has erred in denying the approval to the assessee under Section 80G of the Income Tax Act, 1961.
2. Under the facts and circumstances of the case and in law Ld. CIT, Exemption has erred in rejecting the application of approval under section 80G of the Income Tax Act, 1961, such action being unlawful as well as against the concept of natural justice hence the order passed by Ld. CIT, Exemptions deserves to be quashed.
3. Under the facts and circumstances of the case and in law Ld. CIT, Exemption even after granting the registration under section 12AB denied to allow the approval under section 80G of the Income Tax Act, 1961 hence the said denial being invalid in law deserves to be quashed.
4. The appellant reserves the right to add, amend, modify, or alter any ground or grounds of appeal.”
Succinctly, the fact as culled out from the records is that the application in Form No. 10AB seeking approval u/s 80G of the Income Tax Act, 1961 was filed by the assessee online on 04.01.2023. A letter/notice dated 06.04.2023 was issued at the e- mail/address provided in the application requiring the assessee to submit certain documents / explanations by 21.04.2023, but no compliance was made by the 30.05.2023 wherein date of hearing was fixed on 06.06.2023. However, no compliance was made by the assessee. Further, a reminder letter was issued vide letter dated 09.06.2023 wherein date of hearing fixed on 15.06.2023. In response of the same, the assessee has submitted its reply which was duly examined and few discrepancies were found. In view of principle of natural justice, one more opportunity was provided to the assessee vide Letter dated 14.07.2023 as final opportunity through which date of submission was fixed as 17.07.2023. But this time on given date no reply had been provided by the assessee. Since it was a limitation matter, the case was decided based on material filed by the assessee before ld. CIT(E) along with its application in Form no. 10AB. The relevant finding of the ld. CIT(E) is reiterated here in below :
“03. Genuineness of Activities & non-compliance 3.1. It is important to mention here that while examining the claim of the assessee u/s 80G of I.T. Act, the Commissioner of Income-tax has been empowered to call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and may also make such inquiries as he may deem necessary in this behalf. Under such powers vested in CIT (E), the applicant was asked to file the following details vide this office letter DIN No. ITBA/EXM/F/EXM43/2023- 24/1051896970(1) dated 06.04.2023 which is reproduced as under: -
1. 1. Furnish copy of bank account statement for the last three years.
2. Fumish audited final accounts for the last three years along with details of proof of major income and expenditures."
7 Blossom vs. CIT(E) However, even after giving sufficient opportunities, the applicant has failed to submit the following details: * Details of bank statement. * Copy of final account of last three year. 3.2 In the absence of such documents/details, it could not be determined whether the applicant is genuinely carrying out charitable activity as per its objects and therefore, the application of the applicant is liable to be rejected on the grounds of not proving the genuineness of activities.
4. In view of above discussion assessee's claim of approval 80G is liable to be rejected and thus being rejected on following grounds: - Commencement of activities. Genuineness of Activities & non-compliance.”
7. As the assessee’s application for recognition u/s 80G was rejected the assessee preferred the present appeal on the grounds as stated herein above. The ld. AR of the assessee submitted that the ld. CIT(E) has dismissed the application of the assessee on the two ground one is that the assessee has not submitted the application within six months prior to expiry of period of the provisional approval or within six months of commencements of its activities whichever is earlier. For that aspect of the matter recently CBDT has issued advisory to relax that situation vide circular no. 07/2024 dated 25.04.2024 and the benefit of that be given to the assessee. That CBDT instruction reads as under:
“Sub: Extension of due date for filing of Form No. 10A/10AB under the Income-tax Act, 1961- reg.
8 Blossom vs. CIT(E) On consideration of difficulties reported by the taxpayers and other stakeholders in the electronic filing of Form No. 10A/10AB, the Central Board of Direct Taxes (the Board) in exercise of its powers under section 119 of the Income-tax Act, 1961 (the Act) extended the due date for filing Form No. 10A to 31.08.2021 by Circular No. 12/2021 dated 25.06.2021, to 31.03.2022 by Circular No. 16/2021 dated 29.08.2021, to 25.11.2022 by Circular No. 22/2022 dated 01.11.2022 and further to 30.09.2023 by Circular No. 6/2023 dated 24.05.2023, and extended the due date for filing Form No. 10AB to 30.09.2022 by Circular No. 8/2022 dated 31.03.2022 and further to 30.09.2023 by Circular No. 6/2023 dated 24.05.2023.
Representations have been received in the Board with a request to condone the delay in filing Form No. 10A/10AB, as the same could not be filed in such cases within the last extended date, i.e.. 30.09.2023.
On consideration of the matter, with a view to avoid and mitigate genuine hardship in such cases, the Board, in exercise of the powers conferred under section 119 of the Act, hereby extends the due date of making an application/intimation electronically in- (i) Form No. 10A, in case of an application under clause (i) of the first proviso to clause (23C) of section 10 or under sub-clause (i) of clause (ac) of sub-section (1) of section 12A or under clause (i) of the first proviso to sub-section (5) of section 80G or in case of an intimation under fifth proviso of sub- section (1) of section 35 of the Act, till 30.06.2024; (ii) Form No. 10AB, in case of an application under clause (iii) of the first proviso to clause (230) of section 10 or under sub-clause (iii) of clause (ac) of sub-section (1) of section 12A or under clause (iii) of the first proviso to sub-section (5) of section 80G of the Act, till 30.06.2024. (ii) 4. It may be also noted that extension of due date as mentioned in paragraph 3(ii) shall also apply in case of all pending applications under clause (iii) of the first proviso to clause (23C) of section 10 or sub-clause (iii) of clause (ac) of sub- section (1) of section 12A or under clause (iii) of the first proviso to sub-section (5) of section 80G of the Act, as the case may be. Hence, in cases where any trust, institution or fund has already made an application in Form No.10AB under the said provisions on or before the issuance of this Circular, and where the Principal Commissioner or Commissioner has not passed an order before the issuance of this Circular, the pending application in Form No. 10AB may be treated as a valid application. 4.1 Further, in cases where any trust, institution or fund has already made an application in Form No. 10AB, and where the Principal Commissioner or Commissioner has passed an order rejecting such application, on or before the issuance of this Circular, solely on account of the fact that the application was furnished after the due date or that the application has been furnished under the 9 Blossom vs. CIT(E) wrong section code, it may furnish a fresh application in Form No. 10AB within the extended time provided in paragraph 3(ii) i.e. 30.06.2024.
It is also clarified that if any existing trust, institution or fund who had failed to file Form No. 10A for AY 2022-23 within the due date as extended by the CBDT circular no. 6/2023 dated 24.05.2023 and subsequently, applied for provisional registration as a new trust, institution or fund and has received Form No. 10AC, it can avail the option to surrender the said Form No. 10AC and apply for registration for AY 2022-23 as an existing trust, institution or fund in Form No. 10A within the extended time provided in paragraph 3(i) i.e. 30.06.2024. Hindi version to follow.” 6.
The second reason advanced has two limb one is that Genuineness of Activities and non-compliance on the part of the assessee. On that aspect of the matter the ld. AR of the assessee that considering the activities of the assessee trust being genuine registration u/s. 12AB has been granted to the assessee. Therefore, the contention advanced contradictory which are attention of the approving authority and the other part of the assessee being non compliance in this regard only two opportunities were granted and in the assessee could not get the sufficient opportunity.
Per contra, the ld. DR representing the revenue categorically submitted that the assessee was given sufficient time and they miserably rightly rejected the claim of the assessee for registration.
We have heard the rival contentions and perused the material placed on record. All the grounds raised by the assessee in this appeal are that the assessee trust was denied the approval u/s. 80G of the Act. The Bench noted from the order of the ld. CIT(E) that he has rejected the application of the assessee pertaining to recognition of the society u/s. 80G of the Act on two grounds. The first reasons advanced was that the application made by the assessee was not within six months prior to expiry of period of the provisional approval or within six months of commencements of its activities whichever is earlier. For that aspect of the matter recently CBDT has issued an advisory to relax that situation vide circular no. 07/2024 dated 25.04.2024. Considering that aspect of the matter the assessee could not put on a different situation. As regards the other issue wherein the contention was that of the assessee trust was not considered as Genuine. Since on that aspect of the matter where considering the activities of the trust registration u/s. 12AB was granted the recognition u/s. 80G cannot be denied. As regard noncompliance on the part of the assessee we note that only two notices were issued and arguments of the ld. AR of the assessee that considering the facts of the case it demands that the same be set aside to the file of the ld. CIT(E) to be decided as fresh. Thus, we do not intend to go into the merit of the case or that of the dispute, but it is imperative that the assessee must be provided adequate opportunity of being heard by the ld. CIT(E) and based on circular of the CBDT the matter require a fresh examination. In this view of the matter, the Bench feels that the assessee should be given one more chance to contest the case before the ld. CIT(E). Thus, the assessee is directed to produce all the relevant papers concerning the application so filed before the ld. CIT(E) to settle the dispute raised hereinabove and thus we set aside the issue to the file of the ld. CIT(E).
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 the ld. CIT(E) independently in accordance with law. statistical purposes.