ADITI SEWA PRATISHTHAN , JAMMU V. COMMISSIONER OF INCOME TAX ( EXEMPTIONS), CHANDIGARH

ITA 229/ASR/2024

• Counselvise Citation: [2024] 130 COUNSELVISE.COM (IT) 5536 (ITAT-AMRITSAR)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 01-07-2024
• Assessment Year: misc
• Appeal Filed On: 23-04-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Condonation of delay; Set aside
• Section: 80G

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (HYBRID COURT) BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. UDAYAN DASGUPTA, JUDICIAL MEMBER I.T.A. Nos. 229 & 230/Asr/2024 Assessment Year: NA Aditi Sewa Prathishthan H. No. 191, Near Krishna Bld., New Plot, Jammu, J & K-180005 [PAN: AAJTA 2091A] (Appellant) Vs. Commissioner of Income Tax (Exemptions), Chandigarh (Respondent) Appellant by Respondent by : : Sh. Harry Rikhy, Adv. Sh. Hitendra Bhauraoji Ninawe, CIT-DR Date of Hearing Date of Pronouncement : : 02.07.2024 20.08.2024 ORDER Per Bench: This appeal is filed by the assessee against the order dated 06/09/2023 passed by the Ld CIT ( E ) , rejecting the assessee’s application for registration dated 18/03/2023 filed in form 10AB , u/s 12A(1)(ac)(iii) of the Act 61. Condonation of Delay 171 days: 2 ITA Nos. 229 & 230/Asr/2024 Aditi Sewa Pratishthan v. CIT 2. It is pointed out by the registry that the appeal filed by the assessee is belated by 171 days. The assessee has filed an application for condonation of delay along with an affidavit dated 15 th April 2024 , sworn by the Managing Trustee of the assessee , Ms Sangeeta Manoj Nashirabadkar , explaining the delay on the ground that the chartered accountant of the assessee Mr Parveen Kumar Garg (FCA) , who was authorized on behalf of the trust , to represent and comply with all legal formalities with the income tax authorities in respect of the registration matter, has failed to keep proper track of the said application in the on line Income tax portal . The rejection order has been uploaded in the departmental portal on 06/09/2023, and the information of the said rejection was intimated by the authorized CA, to the managing trustee on 30 th October, 2023. Thereafter, due to medical emergency in the family of the managing trustee, she had to be in Mumbai for medical treatment, and after returning to Jammu in March, 2024, she prepared the appeal with help of her newly appointed lawyers and has filed the same on 24 th April, 2024, belated by 171 days. The authorized chartered accountant Mr. Parveen Kumar Garg (CA), has also filed a sworn affidavit dated 15/04/2024, accepting his professional error and regretting his inadvertent mistake and fault on his part and prayed for condonation of the delay. The Ld DR did not object to the application. We have considered the materials on record and we find that sufficient cause has been shown by the trustee 3 ITA Nos. 229 & 230/Asr/2024 Aditi Sewa Pratishthan v. CIT and considering her medical issues the delay is condoned, and the appeal is admitted to be heard on merits. 3. The grounds of appeal contained in form 36 are as follows: “1. That the order of the Learned Commissioner of Income Tax (Exemptions), Chandigarh is defective both in law and facts of the case. 2. That no reasonable and proper opportunity has been granted to the appellant to represent its case as the appellant never received any notices or communication regarding the proceedings due to an oversight and fault at the part of its counsel which is against the Principals of Natural Justice and Equity. 3. That the Learned Commissioner of Income Tax (Exemptions), Chandigarh is unjustified in rejecting the application for registration u/s 12A(1)(ac)(iii) of the I.T. Act, 1961 duly filed in the prescribed Form no. 10AB along with the supporting documents as the appellant duly fulfills all the required conditions for registration u/s 12AB of the I.T. Act, 1961. The rejection order of registration application is uncalled for and appellant may kindly be granted registration. 4. That any other ground may kindly be allowed to be taken at the time of appeal with due permission.” 4. The facts of the case are that the assessee is a trust incorporated under the hand of the sub registrar, Jammu on 31 st March, 2022 , for carrying out charitable activities for public welfare , including providing shelter for orphans, and hostel facilities and training for children and women, without any discrimination of caste, creed or religion. 5. Application for registration made by the assessee, in form 10AB dated 18/03/2023, along with necessary enclosures, has been rejected by the Ld. CIT(E) , 4 ITA Nos. 229 & 230/Asr/2024 Aditi Sewa Pratishthan v. CIT vide order dated 06/09/2023, in absence of adequate documentary evidences on record. The notice of hearing calling for evidences , issued from the office of the Ld CIT ( E ) , on various dates as per record , on 23 rd June, 2023, 2 nd Aug 2023, and lastly on 17 th Aug, 2023 , has remained un complied , without any response , nor any application for adjournment, from the assessee. 6. In absence of proper compliance from the assessee trust, it was not possible for the Ld CIT (E), to record any satisfaction regarding the genuineness of the activities of the trust and it was also not possible to ascertain as to whether the activities carried out by the assessee are in accordance with the objects, and as such the application for registration in form 10AB has been rejected. 7. Now the assessee is in appeal before the tribunal, on the grounds contained in the memorandum of appeal. 8. The Ld AR, in course of hearing filed a short paper book, containing the copy of the trust deed, with notes of charitable activity carried out by the trust, and copies of ITR, audited income and expenditure account, receipts and payments account, statement of affairs as on March 2023, audit report , copies of form 10A, and provisional registration copy in form 10AC dated 25/05/2022 , valid till AY 2025-26. 9. The Ld AR argued that even though all papers and documents required for the registration of the assessee trust are available and was handed over to the a 5 ITA Nos. 229 & 230/Asr/2024 Aditi Sewa Pratishthan v. CIT professional CA has been duly authorized for the work to keep track of the application and file all necessary particulars , the same has not been done , as evident from his sworn affidavit , and he further submitted that fresh evidence has also been included in the paper book , in the nature of audited accounts and statements, audit reports and has also filed photographs to establish the charitable activity of the trust , which has never been filed before the Ld CIT(E) . He however, respectfully admits , that the documentary evidences enclosed in the paper book , needs to be verified and examined to arrive at a logical conclusion regarding the trust activity, and as such he prays that in the interest of justice one more opportunity may please be allowed to establish the genuineness of the trust activity and as such the matter may be remanded to the Ld CIT(E) , and he undertakes to fully cooperate by filing all necessary documents and papers as per provisions of law. 10. The Ld DR , relied on the order of the Ld CIT ( E ) and has pointed out that notice from the office of the CIT(E) has been issued to the email id provided by the assessee ( as stated in paragraph - 3 of the rejection order ) , and it is not proper for the assessee to plead ignorance of receipt of hearing notice, and lack of opportunity ,as stated in grounds of appeal, and prays for sustaining the order. 11. We have heard the rival submissions and considered the materials on record, and we find that as admitted by the authorized CA Mr. Parveen Kumar Garg , in his 6 ITA Nos. 229 & 230/Asr/2024 Aditi Sewa Pratishthan v. CIT sworn affidavit , that he failed to keep track of the hearing notice issued in the portal and due to inadvertent error on his part , he failed to file any compliance to the notices issued in the email also the requisite documents required for arriving at a satisfaction of genuineness of activities was not filed before the Ld CIT ( E) , due to the fault of the appointed counsel . 12. We also find that the assessee has pursued his case with proper diligence and utmost care and has appointed a qualified professional to handle and represent the matter since the very beginning, but due to reasons unknown the said counsel has failed the assessee to file the requisite documents in the on line portal and to respond to the notices issued, thus failing in his professional duties. We also find that the sufferer in the instant case will be the assessee and not the counsel, who has failed his client in rendering his professional duties. 13. At this stage we would like to refer to the observation of the Hon’ble Supreme court in the case of Rafiq & Anr vs Munshilal & Anr on 16 April, 1981 Equivalent citations: 1981 AIR 1400, 1981 SCR (3) 509, AIR 1981 SUPREME COURT 1400, where the Hon’ble court has observed as follows : “The disturbing feature of the case is that under our present adversary legal system where the parties generally appear through their advocates, the obligation of the parties is to select his advocate, brief him, pay the fees demanded by him and then trust the learned advocate to do the rest of the things. 7 ITA Nos. 229 & 230/Asr/2024 Aditi Sewa Pratishthan v. CIT The party may be a villager or may belong to a rural area and may have no knowledge of the court's procedure. After engaging a lawyer, the party may remain supremely confident that the lawyer will look after his interest. At the time of the hearing of the appeal, the personal appearance of the party is not only not required but hardly useful. Therefore, the party having done everything in his power to effectively participate in the proceedings can rest assured that he has neither to go to the High Court to inquire as to what is happening in the High Court with regard to his appeal nor is he to act as a watchdog of the advocate that the latter appears in the matter when it is listed. It is no part of his job. Mr. A.K. Sanghi stated that a practice has grown up in the High Court of Allahabad amongst the lawyers that they remain absent when they do not like a particular Bench. Maybe he is better informed on this matter. Ignorance in this behalf is our bliss. Even if we do not put our seal of imprimatur on the alleged practice by dismissing this matter which may discourage such a tendency, would it not bring justice delivery system into disrepute. What is the fault of the party who having done everything in his power and expected of him would suffer because of the default of his advocate. If we reject this appeal, as Mr. A.K. Sanghi invited us to do, the only one who would suffer would not be the lawyer who did not appear but the party whose interest he represented. The problem that agitates us is whether it is proper that the party should suffer for the inaction, deliberate omission, or misdemeanour of his agent. The answer obviously is in the negative. Maybe that the learned advocate absented himself deliberately or intentionally. We have no material for ascertaining that aspect of the matter. We say nothing more on that aspect of the matter. However, we cannot be a party to an innocent party suffering injustice merely because his chosen advocate defaulted. Therefore, we allow this appeal, set aside the order of the High Court both dismissing the appeal and refusing to recall that order. We direct that the appeal be restored to its original number in the High Court and be disposed of according to law. If there is a stay of dispossession it will continue till the disposal of the matter by the High Court. There remains the question as to who shall pay the costs of the respondent here. As we feel that the party is not responsible because he has done whatever was possible and was in his power to do, the costs amounting to Rs.200/- should be recovered from the advocate who absented himself. The right to execute that order is reserved with the party represented by Mr. A.K.Sanghi. Appeal allowed to the extent indicated with costs in the manner indicated.” 14. Respectfully, following the observation of the Hon’ble Apex court, we are also of the view that in the instant case the assessee cannot be made to suffer injustice merely because his chosen counsel (Chartered Accountant) has defaulted. 8 ITA Nos. 229 & 230/Asr/2024 Aditi Sewa Pratishthan v. CIT 15. Therefore, for the sake of justice, we remand the matter to the Ld CIT(E) , with a direction to allow the assessee trust one more opportunity to represent its case by filing all necessary documents and statement of accounts and audit reports and all necessary papers in support of his application for registration and for consideration of the application afresh on merits of the case after allowing opportunity of being heard and the assessee is also directed to cause full representation before the Ld Commissioner ( E) , as per provisions of law. 16. In the result the appeal No ITA 229/ASR/2024, of the assessee is allowed for statistical purpose. ITA No. 230/ASR/2024 (Asst Year : 2023-24. Appeal against order u/s 80G of the Act 61) : Condonation of Delay 169 days : 17. It is pointed out by the registry that the appeal filed by the assessee is belated by 169 days. The assessee has filed an application for condonation of delay along with an affidavit dated 15 th April 2024 , sworn by the Managing Trustee of the assessee , Ms Sangeeta Manoj Nashirabadkar and affidavit sworn by the CA Mr Parveen Kumar Garg ( FCA ) , of even date, containing the same particulars and same reasons , as narrated in ITA No: 229/ASR/2024, (with the sole exception that in 9 ITA Nos. 229 & 230/Asr/2024 Aditi Sewa Pratishthan v. CIT the instant case the rejection order has been passed on 8 th September, 2023) , and consequently , taking an identical view in the matter we condone the delay and admit the appeal to be decided on merits. 18. This appeal is filed by the assessee against the rejection order of the Ld CIT ( E ) , Chandigarh, dated 08/09/2023, rejecting the application of the assessee filed in form 10AB , dated 18/03/2023 for approval u/s 80G(5) of the Act 61. 19. In the instant case , since the application for registration u/s 12AB has been rejected vide order dated 06/09/2023 , for non compliance , the present application for approval u/s 80G(5) of the Act 61, cannot be proceeded with, on merits , in absence of any registration u/s 12AB of the Act 1961. 20. The grounds of appeal and the facts of the case are identical to the facts discussed by us in ITA No: 229/ASR/2024 , and our observation applies mutatis mutandis to the instant appeal as well. 21. As such for the sake of justice this appeal is also remanded to the Ld CIT(E) , for consideration of the application for approval in form 10AB , afresh, on merits of the case, after allowing opportunity of being heard to the assessee as per provisions of law. 10 ITA Nos. 229 & 230/Asr/2024 Aditi Sewa Pratishthan v. CIT 22. This appeal of the assessee ITA No: 230/ASR/2024 is allowed for statistical purpose. Order pronounced in the open court on 20.08.2024 Sd/- Sd/- (Dr. M. L. Meena) (Udayan Dasgupta) Accountant Member Judicial Member *GP/Sr.PS* Copy of the order forwarded to: (1)The Appellant: (2) The Respondent: (3) The CIT concerned (4) The Sr. DR, I.T.A.T. True Copy By Order