IIT MANDI IHUB AND HCI FOUNDATION,MANDI, HIMACHAL PRADESH V. COMMISSIONER OF INCOME TAX, EXEMPTIONS, CHANDIGARH

ITA 263/CHANDI/2025

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The case involves IIT Mandi IHUB and HCI Foundation, a Section 8 company under the Ministry of Science and Technology, which sought registration under sections 12A and 80G of the Income Tax Act, 1961. The initial applications were rejected by the CIT(Exemptions) due to non-compliance and non-participation in the proceedings. The assessee filed appeals against these rejections, which were initially delayed due to administrative oversights. The tribunal found merit in the assessee's explanations for the delays and procedural lapses, leading to the condonation of the delay and remand of the case for fresh consideration.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 707159 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2023-2024
• Appeal Filed On: 20-02-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANAV BANSAL
• Assessee Lawyers: TEJMOHAN SINGH
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice
• Section: 12A; 80G

Judgement Text

"आयकर अपीलीय अिधकरण,चǷीगढ़ Ɋायपीठ “ए” , चǷीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH HEARING THROUGH: PHYSICAL MODE ŵी लिलत क ुमार, Ɋाियक सद˟ एवं ŵी क ृणवȶ सहाय, लेखा सद˟ BEFORE: SHRI. LALIET KUMAR, JM & SHRI. KRINWANT SAHAY, AM आयकर अपील सं./ ITA No. 261 TO 264/Chd/ 2025 िनधाŊरण वषŊ / Assessment Year : 2023-24 IIT Mandi IHUB and HCI Foundation C/o Tejmohan Sngh, Advocate # 527, Sector 10-D, Chandigarh- 160011 बनाम The CIT(Exemptions) Chandigarh ˕ायी लेखा सं./PAN NO: AAFCI8203B अपीलाथŎ/Appellant ŮȑथŎ/Respondent िनधाŊįरती की ओर से/Assessee by : Shri Tejmohan Singh, Advocate राजˢ की ओर से/ Revenue by : Shri Manav Bansal, CIT DR सुनवाई की तारीख/Date of Hearing : 07/07/2025 उदघोषणा की तारीख/Date of Pronouncement : 08/07/2025 आदेश/Order PER BENCH: All the above appeals filed by the Assessee against the separate orders of the Ld. CIT(Exemptions), Chandigarh. 2. The appeal Nos. 261/Chd/2025 and 262/Chd/2025 are barred by period of 662 days. The assessee has submitted condonation applications for appeal. For convenience, the contents of the condonation application filed in Appeal No. 261/Chd/2025 and 262/Chd/2025 are reproduced below: Respectfully submitted as under: - 1. That the assessee appellant is a company incorporated on 24.09.2020 under Section 8 of the Companies Act and is under the aegis of Ministry of Science and Technology, Department of Science and Technology, New Delhi. 2. That the assessee appellant filed an appeal against the rejection of application for registration u/s 12A of the Act before the Hon'ble IT AT. 3. That the application was rejected and decided ex-parte by the Commissioner of Income Tax (Exemptions) vide order dated 22/02/2023. 2 4. That an appeal against the order of Commissioner of Income Tax(Exemptions ) was filed before the Income Tax Appellate Tribunal, Chandigarh on 22.02.2025 which is late by 662 days. 5. That another order rejecting the applications filed u/s 12A was passed by CIT(Exemptions), Chandigarh dated 27.11.2024 (also under appeal before the Hon'ble Bench) wherein there was a reference to the order passed by CIT(Exemptions) dated 22.02.2023. 6. That on checking the portal, it was seen that an ex-parte order has been passed by the Commissioner of Income Tax (Exemption) on 22.02.2023. 7. That the notices were not received on any of the organization's official or actively monitored email addresses, and as a result, the team was unaware of them at the relevant time. 8. Ms. Vaidehi was hired as a Consultant to apply for 12A/80G) Velu Muthu Associates., Chartered Accountants, 17, Bishop Wallers Avenue (East) Mylapore, Chennai-600 004. The communications for Ms. Vaidehi Muthu were sent to [e-mail], an email address that is no longer active due to iHub's domain change. This prevented timely circulation of information. 9. That consultants had been hired remotely at that time, and there was a change in the consulting team during this period. The transition was not smooth, and the new team was not adequately briefed or handed over the pending matters. 10. That the order of CIT(Exemptions), Chandigarh order dated 22.02.2023 was also not received through post. 11. That we hired M/s Soni and Rustogi, Chartered Accountants, Loktus Villa, Near Navrattan Guest House, Chotta Shimla, HP-171002 to assist in getting the registration u/s 12A and 80G approved and it was at this juncture, it was seen that the orders have already been passed by the Commissioner of Income Tax(Exemptions). 12. The appeal filing was delayed to understand the formalities and seek consultant input. We acknowledge our oversight in not acting sooner due to an initial lack of familiarity with the process. 13. That an appeal was filed before the Hon'ble IT AT, Chandigarh Benches, Chandigarh against the order passed by the CIT(E), Chandigarh on 22.02.2025 though belatedly by the 662 days for reasons mentioned above. 14. That my affidavit in this regard is also enclosed herewith. 3 3. We shall be dealing the condonation application in the foregoing paragraphs while adjudicating the appeal of the assessee on merits. 4. Since the issues involved in all the above appeals are common and were heard together therefore they are being disposed of by this consolidated order. 5. We shall take appeal of the assessee in ITA No. 261/Chd/2025 as a lead case for discussion wherein Assessee has raised the following grounds: 1. That the Ld. Commissioner of Income Tax(Exemptions) has erred in law in passing an ex-parte order rejecting the registration sought under section 12AB which is against the Principals of Natural Justice and as such the order passed is arbitrary and unjustified. 2. That the Ld. Commissioner of Income Tax(Exemptions) has erred in rejecting the registration ex-parte only on the basis of alleged non-compliance on part of the assessee when in fact assessee had sought adjournment to furnish the requisite documents and as such the order passed is arbitrary and unjustified. 3. Without prejudice to the above, the Ld. Commissioner of Income Tax(Exemptions) has erred in law as well as on facts in rejecting registration under section I2AB of the Act which is arbitrary & unjustified. 4. That the registration has been refused only on the basis of suspicion, conjectures and surmises without considering the material already on record and as such the order refusing registration is arbitrary and unjustified. 5. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 6. The assessee, IIT Mandi IHub and HCI Foundation, is a Section 8 company incorporated on 24.09.2020 under the Companies Act, 2013. It functions under the aegis of the Ministry of Science and Technology, Government of India, with the stated objective of promoting innovation and research in Human-Computer Interaction and allied disciplines. The assessee filed an application in Form 10AB on 28.09.2022 seeking registration under the aforementioned provisions of the Act. 7. In order to examine the application and verify the genuineness of the activities, the Ld. CIT(E) issued several notices electronically on 10.11.2022, 13.12.2022, 30.12.2022, and 24.01.2023. However, despite repeated opportunities, the assessee failed to respond to these notices or furnish any supporting documents. The Ld. CIT(E), in the absence of any participation or material evidence, proceeded to reject the application ex parte on 22.02.2023. 8. During the course of hearing before us, the Ld. DR submitted that the assessee is a government backed entity and is expected to adhere strictly to the procedural mandates of law. The non-participation before the Ld. CIT(E), despite multiple opportunities, reflects a callous and casual approach, particularly in light of 4 the statutory requirement to establish the genuineness of charitable activities under Section 12A of the Act. The Ld. DR contended that even government institutions are not exempt from compliance obligations and must demonstrate procedural discipline while interacting with statutory authorities under the Income Tax Act. 9. In rebuttal, the learned counsel for the assessee submitted that the failure to respond to the notices was not intentional, but rather due to a series of bona fide oversights. It was explained that the communication from the Department was addressed to an outdated email ID ([e-mail]) which became inactive after a change in domain. The earlier consultant engaged for the 12A/80G application had left during this time, and the transition to the new consulting team was not smooth. As a result, critical information such as the notices and the eventual order remained undelivered or unnoticed. It was only after appointing new consultants in early 2025 that the assessee discovered the ex parte order. 10. The learned counsel also drew attention to the affidavit of the Chief Executive Officer, wherein all these facts have been affirmed and the delay of 662 days in filing the appeal has been duly explained. It was urged that the lapse was not deliberate or negligent but stemmed from administrative mismanagement, which has since been rectified. It was argued that denying the assessee an opportunity of hearing would amount to a miscarriage of justice. 11. We have carefully considered the rival submissions and examined the records. There is no dispute that the assessee did not participate in the proceedings before the Ld. CIT(E) despite being afforded multiple opportunities. At the same time, the explanation provided backed by a sworn affidavit points to genuine systemic lapses arising from email misrouting and consulting transition. While we do not condone the laxity, we are also conscious of the fact that the assessee is a Central Government initiative, operating in the public interest, with no profit motive, and was engaging with the process for the first time. 11.1 It is trite law that ex parte orders which suffer from lack of service or opportunity violate the principles of natural justice. Even a government-funded body is expected to comply with procedural norms, but equally, the authorities must consider the peculiar factual context and the larger institutional framework within which such entities operate. 11.2 In the facts and circumstances of this case, we are inclined to take a liberal view. We find merit in the explanation furnished for the delay in filing the appeal and 5 accordingly condone the delay of 662 days. Further, in the interest of justice, the impugned order dated 22.02.2023 is set aside and the matter is restored to the file of the CIT(E), Chandigarh, with a direction to re-adjudicate the application of the assessee after affording due opportunity of being heard and permitting the assessee to furnish all relevant documents and clarifications in support of its case. 12. In the result, the appeal filed by the assessee is allowed for statistical purposes. 13. Both the parties fairly submitted that the facts and circumstances of other appeals i.e ITA No. 262 / Chd/2025 are exactly identical to the Appeal in ITA No. 261/Chd/2025, therefore our directions given in ITA No. 261/Chd/2025 shall apply mutatis mutandis to this appeal also. 14. In the result appeal in ITA No. No. 261/Chd/2025 and in ITA No. 262/Chd/2025 are allowed for statistical purposes. 15. The present appeals in ITA Nos. 263 & 264/Chd/2025 have been preferred by the assessee against the consolidated order passed by the Ld. Commissioner of Income Tax (Exemptions), Chandigarh [CIT(E)], rejecting the applications filed by the assessee seeking registration under Sections 12A and 80G of the Income Tax Act, 1961. These applications were filed afresh by the assessee vide application dated 27.06.2024. 16. It is noted that the Ld. CIT(E) rejected the said applications primarily on the ground that the earlier applications of the assessee for the same reliefs had already been rejected by order dated 22.02.2023. 17. However, it is pertinent to record that vide separate order passed by us today in ITA Nos. 261 & 262/Chd/2025, the earlier rejection orders dated 22.02.2023 have already been set aside and the matters have been restored to the file of the Ld. CIT(E) with directions to decide the same afresh, after affording due opportunity of hearing to the assessee. 18. In view of the above, since the present appeals arise from the fresh applications dated 27.06.2024 which were rejected solely on the basis of the earlier rejection orders that now stand remanded, these appeals have become academic and infructuous. Accordingly, no adjudication is warranted at this stage. 6 19. Hence, the appeals in ITA Nos. 263 & 264/Chd/2025 are dismissed as infructuous, with liberty to the assessee to take appropriate steps, if so advised, depending upon the outcome of the proceedings in ITA Nos. 261 & 262/Chd/2025. Order pronounced in the open Court on 08/07/2025 Sd/- Sd/- क ृणवȶ सहाय लिलत क ुमार (KRINWANT SAHAY) (LALIET KUMAR) लेखा सद˟/ ACCOUNTANT MEMBER Ɋाियक सद˟ /JUDICIAL MEMBER AG आदेश की Ůितिलिप अŤेिषत/ Copy of the order forwarded to : 1. अपीलाथŎ/ The Appellant 2. ŮȑथŎ/ The Respondent 3. आयकर आयुƅ/ CIT 4. आयकर आयुƅ (अपील)/ The CIT(A) 5. िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, चǷीगढ़/ DR, ITAT, CHANDIGARH 6. गाडŊ फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar "