M/S. NOBAL WELFARE SOCIETY,FAZILKA vs. COMMISSIONER OF INCOME TAX ( EXEMPTION), CHANDIGARH

Per Dr. M. L. Meena, AM:

Both the appeals have been filed by the assessee against the separate orders of the ld. Commissioner of Income Tax (Exemptions),

Chandigarh dated 22.09.2022 and 23.09.2022 Challenging therein rejection

2 ITA Nos. 233 & 234/Asr/2023 Nobel Welfare Society v. CIT of registration/approval u/s 12AB and 80G of the Income Tax Act, 1961

respectively.

for the assessee submitted that the notices issued to the society have

never been received and hence, assessee could not furnish any reply to

the queries raised by the CIT(E) who has in turn passed an order ex-parte

qua the appellant assessee on 22.09.2022. The ld. AR submitted that the

profile of the assessee trust has also been updated with the mobile

number/email as per documentary evidence filed on (APB Pg. No. 4).

Since, the assessee and his counsel did not receive any intimation of

hearing either on his mobile number or email ids and hence, it has bonafide

reason for non-compliance on account of lack of communication. The ld.

counsel has also submitted that the assessee has changed its counsel on

receipt of notice u/s 143(2) of the Act on its registered email when he came

to know about the order of the rejection passed by the CIT(E) u/s

12AB/80G of the Act. The screenshot of the Income Tax Portal has been

filed on record (ABP Pg. No. 5). The ld. AR has argued that there was a

bonafide reason for delay in filing the appeal relying on the judgment of the

coordinate Mumbai Bench of the Tribunal in the case of Triumph

3 ITA Nos. 233 & 234/Asr/2023 Nobel Welfare Society v. CIT

International Finance India Ltd. bearing ITA No. 1870/Mum/2020 for AY

2017-18 wherein the Tribunal has held as under:

“The year 2019 being the initial year of shift towards digital and electronic mode, the mistake appears to be bona-fide. The assessee has been able to show reasonable cause for the failure to comply with the statutory notice u/s 142(1) of the Act.” The counsel further placed reliance on the judgment delivered by Amritsar

Bench in the case of Gurfateh Films and Sippy Grewal Productions (P)

Ltd., v. PCIT (Central), Ludhiana in ITA No. 92/Asr/2020 for AY 2013-14

dated 26.12.2021 wherein the Tribunal by following the principle laid down

by the Hon’ble Apex Court in the case of Esha Bhattacharjee v. Managing

Committee of Raghunathpur Nafar Academy & Others (Civil Appeal Nos.

8183-8184 of 2013) held as under:

“The principles that emanate from the above said decisions are that, in the matter of condonation of delay in filing appeals beyond the limitation period, the courts are empowered to condone the delay, provided the litigant is able to demonstrate that there was "sufficient cause" in preferring appeal beyond the limitation period. The Courts have also held that the expression "sufficient cause" should receive liberal construction so as to advance substantial justice. Hence the question of condonation of delay is a factual matter and the result would depend upon the facts of the case and the cause shown by the assessee for the delay. It has also been opined that generally delays in preferring appeals are required to be condoned in the interest of justice, where no gross negligence or deliberate inaction or lack of bona fides is imputable to the party seeking condonation of the delay.” 2.1. Considering the bona-fide reason for delay in filing the appeal, the

delay of 266 days is condoned, and appeals admitted on merits.

4 ITA Nos. 233 & 234/Asr/2023 Nobel Welfare Society v. CIT 3. The CIT (Exemption) while rejecting the application for

registration/approval has stated that on the stipulated date of hearing

neither any submission was made nor was any request for adjournment or

other communication received from the applicant through any channel.

Another letter granting the necessary opportunity was issued to the

applicant on 30.08.2022 and the matter was fixed for reply by 07.09.2022.

On this date, likewise, neither any online/offline reply was submitted nor

was any request for adjournment or other communication received from the

applicant. In the interests of natural justice, final opportunity was then

accorded to the applicant on 10.09.2022 and the matter was fixed for

14.09.2022. However once again, no reply has been furnished in the case

nor any communication received from the applicant through any channel

even till the date of passing of this order. Given the non-compliance on the

aforesaid occasions afforded to the applicant, it becomes evident that the

applicant is not interested in pursuing the matter. In the absence of

submissions regarding the activities, it is difficult to verify both the nature of

objects & genuineness of the activities of the applicant. It can safely be

concluded that the queries raised could not be answered satisfactorily by

the applicant. Accordingly, the Ld. CIT (Exemptions), Chandigarh has

5 ITA Nos. 233 & 234/Asr/2023 Nobel Welfare Society v. CIT refused to grant registration u/s 12AB and Approval u/s 80G of the Income

Tax Act, 1961 vide order, dated 22.09.2022 and 23.09.2022 respectively.

(Exemptions), Chandigarh was not justified in refusal to grant registration

u/s 12AA and approval u/s 80G of the Income Tax Act, 1961 vide order,

dated 22.09.2022 and23.09.2022, as such, denial of the claim for

exemption u/s 12AA and approval u/s 80G is against the facts and

circumstances of the case. The ld. AR submitted that said society was

engaged in medical aid, distribution of free medicine to the weaker section

of the society and also providing Ambulance to them during the previous

year and the same is then provided too much needed persons in case of

emergency; that the notices of hearing as may have been issued by the Ld.

CIT (Exemption), were neither received in ‘physical mode’ nor through

portal, which the assessee could access, nor the same were in the

knowledge and, as such, the assessee was prevented by sufficient and

reasonable cause in complying with the notices as sent by the Ld.CIT

(Exemptions). Further, no intimation about the notice was sent through

email/SMS to the assessee before finalization of case. Meaning thereby,

that the assessee was prevented by sufficient and reasonable cause in not

6 ITA Nos. 233 & 234/Asr/2023 Nobel Welfare Society v. CIT

attending the proceedings before the CIT (Exemptions). The AR argued

relying on the judgment of Hon’ble ITAT, Mumbai Bench in the case of

Triumph International Finance India Ltd. bearing ITA No. 1870/Mum/2020

for AY 2017-18 that since the system of e-communication has been a

recent development, many people’s are not aware of the same and, as

such, lenient view deserves to be taken. He prayed that notwithstanding

the above said facts, the assessee has good and arguable case for

granting registration u/s 12AA and 80G of the Income Tax Act, 1961 and,

as such, the order of CIT (Exemptions) may, please, be set aside. In

support, he filed a brief note, and relevant part is extracted as under:

“The Worthy CIT(Ex.) issued three notices with a gap of almost 10 days each and none of the notice as evident from the below chart showing the date of questionnaire/notice issued and the service of the same:

Date of issue of notice Due Date Service 18.08.2022 29.08.2022 Notice was not received on the registered email-id of the Assessee Society and no 30.08.2022 07.09.2022 any intimation of the same was received on the registered mobile number. That said fact also verifiable from the 10.09.2022 14.09.2022 screenshot of each notice of the Income Tax Portal wherein the email id on which notice has been served is showing ‘BLANK’, (Enclosed herewith at Page No. 1 to 3)

7 ITA Nos. 233 & 234/Asr/2023 Nobel Welfare Society v. CIT It is clear from the above table that no notice was served upon the Assessee Society and as such the Assessee was completely unaware about the proceedings being concluded and the rejection order was passed against the assessee ex-parte. The profile of assessee trust has been updated with the mobile number/email also as per copy of the evidence is being enclosed herewith for your ready reference at Page No. 4. However, the assessee and his counsel did not receive any intimation of hearing on his mobile numbers and email IDs also and even the Worthy CIT(Ex.) could have looked into the Portal of the assessee for the email id on which the notice could have been sent.”

orders. However, he has no objection to the request of the council of the

assessee in view of natural justice.

orders. Admittedly, the notices of hearing issued by the Ld. CIT

(Exemption), were neither received in ‘physical mode’ nor through portal,

by the appellant and consequently, the assessee couldn’t access the same

as these were not in its knowledge. In our view, the system of e-

communication has been a recent development, many people’s are not

aware of the same and, as such, lenient view deserves to be taken.

Meaning thereby, that the assessee was prevented by sufficient and

reasonable cause in not attending the proceedings before the CIT

8 ITA Nos. 233 & 234/Asr/2023 Nobel Welfare Society v. CIT (Exemptions). Our view gets support from the decision of ITAT, Mumbai

Bench in the case of Triumph International Finance India Ltd. (Supra).

considered view that the assessee has good and arguable case for

granting registration u/s 12AA and 80G of the Income Tax Act, 1961.In

view of principles of natural justice, we consider it deem fit to remand back

the matter regarding grant of registration under section 12 AB and approval

under section 80G of the Income Tax Act to the file of the Ld. CIT

exemption for afresh adjudication after granting adequate opportunity of

being heard and after considering the written submissions filed on the

record and to be filed during fresh proceedings. Appellant and its council

are also directed to corporate in the fresh proceedings by filing the requisite

details in compliance to the queries raised by the learned CIT exemption

for the purpose of adjudication of the matter of grant of registration u/s 12

AB and approval under section 80G of the Income Tax Act as per law.

regarding grant of registration u/s 12AB and approval u/s 80G of the

Income Tax Act are remanded back to the file of the Ld. CIT Exemption for

afresh adjudication as per law.

9 ITA Nos. 233 & 234/Asr/2023 Nobel Welfare Society v. CIT 9. In the result, both the appeals of the assessee are allowed for

statistical purposes.

Order pronounced in the open court on 15.09.2023

Sd/- Sd/- (Anikesh Banerjee) (Dr. M. L. Meena) Judicial Member Accountant Member *GP/Sr.PS* Copy of the order forwarded to: (1)The Appellant: (2) The Respondent: (3) The CIT(Appeals) (4) The CIT concerned (5) The Sr. DR, I.T.A.T. True Copy By Order