Loading judgment…
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
AI-generated summary — verify with the full judgment below
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.
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
2 ITA No. 405/JP/2024 Blossom vs. CIT(E) assessee filed an application for condonation of delay with following
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. 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 ITA No. 405/JP/2024 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.
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
4 ITA No. 405/JP/2024 Blossom vs. CIT(E) concerned persons all aware about the compliance to be made even
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
5 ITA No. 405/JP/2024 Blossom vs. CIT(E) prevented by sufficient cause only on the reasons that on the lapses
of the persons the institution should not suffer.
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.
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.
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.
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
6 ITA No. 405/JP/2024 Blossom vs. CIT(E) assessee. Thereafter, a reminder letter was issued vide letter dated
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. 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 ITA No. 405/JP/2024 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. 04. 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.”
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 ITA No. 405/JP/2024 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. 2. 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. 3. 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 ITA No. 405/JP/2024 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. 5. 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
10 ITA No. 405/JP/2024 Blossom vs. CIT(E) failed to support the requirement of registration and the ld. CIT(E) has
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
11 ITA No. 405/JP/2024 Blossom vs. CIT(E) therefore, considering the peculiar set of facts we found force in the
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.
12 ITA No. 405/JP/2024 Blossom vs. CIT(E) In the result, the appeal of the assessee is allowed for
statistical purposes.
Order pronounced in the open court on 02/07/2024. Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member
Tk;iqj@Jaipur fnukad@Dated:- 02/07/2024 *Ganesh Kumar, Sr. PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- Blossom , Jaipur 2. izR;FkhZ@ The Respondent- CIT (Exemption), Jaipur 3. vk;dj vk;qDr@ The ld CIT vk;dj vk;qDr¼vihy½@The ld CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. 6. xkMZ QkbZy@ Guard File (ITA No. 405/JP/2024) vkns'kkuqlkj@ By order,
सहायक पंजीकार@Aेेज. त्महपेजतंत