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Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI INTURI RAMA RAO & SHRI VINAY BHAMORE
आदेश / ORDER
PER INTURI RAMA RAO, AM:
These are the two appeals filed by the assessee directed against the separate orders of the ld.CIT(Exemption), Pune dated 29.09.2022 and 27.10.2022 respectively denying registration u/s.12A as well as approval u/s.80G(5) of the Income-tax Act, 1961 (hereinafter also called ‘the Act’).
At the outset, we find that the appeals are time barred by limitation by 557 days before the Tribunal. The appellant trust had filed an affidavit praying for condonation of delay on the ground that the orders were served to e-mail id/address which was inactive. The orders could be retrieved only when the e-mail id was made active in the month of May, 2024. Immediately after the orders came to the knowledge of the appellant trust, steps were initiated for filing the appeals which resulted in delay. The ld. DR had vehemently opposed the condonation of delay placing reliance on certain judicial precedents.
We heard the rival submissions and perused the material on record. It is trite law that, in the matters of condonation of delay, what is relevant is not the length of delay but whether there is ‘sufficient cause’ for the delay. The decisions relied upon by the ld. DR have no relevance inasmuch as those pertain to the cases where no ‘sufficient cause’ were shown for delay. We have gone through the averments made in the petition for condonation of delay. There is no material on record to disbelieve the averments made in the affidavit and keeping in view the salutary principle governing the condonation of delay that nobody gains out of delaying in filing the appeal, we are of the considered opinion that these are fit cases to condone the delay in order to advance substantial justice. Accordingly, we condone the delay of 557 days and admit the appeals for adjudication.
Brief facts of the appeal are that the appellant is a Trust, filed application in Form No.10AB dated 31.03.2022 seeking registration u/s.12A(1)(ac)(iii) of the Act. On receipt of the said application, the ld. CIT (Exemptions), in order to verify the genuineness of activities of the appellant trust, issued notice through ITBA portal on 19.07.2022 calling for certain information/clarification by 03.08.2022. Another notice dated 18.09.2022 was issued requiring the appellant to submit its compliance on or before 23.09.2022. Both the notices were stated to have been served through e-portal and e-mail. However, for the reasons best known to it, the appellant trust could not comply with the said notice. In the circumstances, the ld. CIT(Exemptions) rejected the application filed by the appellant trust for grant of registration u/s.12AB by observing as under :
“3.1. . . . . . . . . In absence of the copy of trust deed/MoA, the charitable nature of objects of the trust/institution could not be verified and whether the activities are in line with the objects of the trust/institution could also not be ascertained. Hence, the undersigned is unable to draw any satisfactory conclusion about genuineness of activities of the assessee.”
Being aggrieved, the appellant trust is in appeal before the Tribunal in the present appeal.
Before us, the ld. AR submits that the notices issued through ITBA portal is not a valid method and manner of serving the notices. He further submits that the notice given by the ld. CIT(Exemption) falls short of legal requirement of atleast giving 15 days time to respond to the notice. Further, Therefore, in the interest of justice, it is therefore prayed for remanding the matter to the file of CIT(Exemption).
On the other hand, the ld. DR submits that the appellant trust did not comply with the notices issued through ITBA portal and e-mail despite giving ample opportunities. Therefore, the ld. CIT(Exemptions) was justified in rejecting the application by the appellant trust seeking registration u/s.12A of the Act.
We heard the rival submissions and perused the relevant material on record. In the instant case, the appellant trust filed application in Form No.10AB dated 31.03.2022 seeking registration u/s.12A(1)(ac)(iii) of the Act. The CIT(Exemptions) rejected the application filed by the appellant trust owing to non-compliance of the appellant trust to the notices issued through ITBA portal. On mere perusal of the contents of para no.2 of the impugned order, it would reveal that the notices were served through e- portal. In our considered opinion, it is not a valid method and manner of service of notice as specified under the provisions of section 282(1) of the Income-tax Act, 1961 Act and Rule 127(1) of the Income-tax Rules, 1962. Therefore, it is crystal clear that the notices were not served upon the appellant trust. To fortify our view, we would like to make a reference to a decision rendered by the Hon’ble Punjab & Haryana High Court in the case of Munjal BCU Centre of Innovation and Entrepreneurship Vs. CIT (Exemptions) (2024) 463 ITR 560 (P&H), wherein the Hon’ble High Court after making reference to provisions of 282(1) held that service of notice through ITBA portal is not valid service and remanded the matter to AO for denovo disposal of case. The relevant paragraphs of the judgment are reproduced below :
“7. We are afraid that we cannot subscribe to the submissions as advanced by the learned counsel for the Revenue-respondent. The provisions of section 282(1) of the Act of 1961 and rule 127(1) of the Income-tax Rules, 1962 provides for a method and manner of service of notice and orders which read as follows : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8. In view of the above, it is essential that before any action is taken, communication of the notice must be done in terms of the provisions as enumerated hereinabove. The provisions do not mention communication to be “presumed” by placing notice on the e-portal. A pragmatic view has to be adopted always in these circumstances. An individual or a company is not expected to keep the e-portal of the Department open all the time so as to have knowledge of what the Department is supposed to be doing with regard to the submissions of forms etc. The principles of natural justice are inherent in the income-tax provisions and the same are required to be necessarily followed.
Having noticed as above, this court is of the firm view that the petitioner has not been given sufficient opportunity to put up its please with regard to the proceedings under section 12A(1)(ac)(iii) of the Act of 1961 and as it was not served with any notice. Therefore, he would be entitled to file his reply and the Department would of course be entitled to examine the same and pass a fresh order thereafter.
In view of the above, the writ petition is allowed and the order dated January 16, 2023 (annexure P-5) is quashed and set-aside. The Department would provide an opportunity of hearing to the petitioner and they will also allow the petitioner to appear personally for the purpose and pass a speaking order independent of the order passed earlier by them on January 16,2023. The same shall be done expeditiously provided the petitioner file his reply within a period of three weeks.”
In view of the above legal position, we are of the considered opinion that the notice(s) of hearing were not served properly to the appellant trust. In the circumstances, we find it is a fit case to remand the matter to the file of CIT(Exemptions) for denovo disposal of application of the appellant trust after affording due opportunity in accordance with law. The appeal filed by the appellant trust stands partly allowed for statistical purposes. filed by the appellant trust is partly allowed for statistical purposes.
Form No.10AB under clause (iiii) of first proviso to sub-section (5) of section 80G on 16.04.2022. The ld. CIT(Exemptions), in order to verify the genuineness of activities of the trust issued notice through ITBA portal on 30.08.2022 calling for certain information/clarification, which the appellant trust could not comply with. In the circumstances, the ld. CIT(Exemptions) denied grant of approval u/s.80G(5) of the Act.
Since the facts relating to service of notice through ITBA portal remain same, our finding given in remanding the matter to the file of ld. CIT(Exemptions) for denovo disposal of the application will hold good for this appeal as well.
To sum up, both the appeals filed by the appellant trust are partly allowed for statistical purposes.