MAOOLI EDUCATION FOUNDATION, MUMBAI V. COMMISSIONER OF INCOME TAX (EXEMPTION) , MUMBAI

ITA 514/MUM/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 6876 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2024
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: B
• Next Hearing Date: 27-05-2024
• Assessment Year: 2022-2023
• Appeal Filed On: 04-02-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S. SRINIVASU
• Assessee Lawyers: RITIK KASKAR
• Keywords: Opportunity of being heard; Principle of natural justice; Set aside
• Section: 11; 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “B” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAJ KUMAR CHAUHAN (JUDICIAL MEMBER) ITA No. 514/MUM/2024 Assessment Year: 2022-23 Maooli Education Foundation, 9-B-204, Prem Nagar, S V Road, Borivali West, Mumbai-400092. Vs. CIT (Exemption), Room No. 601, Cumballa Hill MTNL TE Building, Peddar Road, Dr. Gopalrao Deshmukh Marg, Cumballa Hill, Mumbai-400026. PAN NO. AAATM 0795 Q Appellant Respondent Assessee by : Mr. Ritik Kaskar Revenue by : Mr. S. Srinivasu, CIT-DR Date of Hearing : 28/05/2024 Date of pronouncement : 30/05/2024 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 29.09.2022 passed by the Ld. Commissioner of Income-tax (Exemption), Mumbai [in short ‘the Ld. CIT(E)’] in relation to rejection of registration of the Trust u/s 12AB of the Income-tax Act, 1961 (in short’ the Act’). 2. The relevant ground raised by the assessee under: “The Ld. CIT (Exemption) erred in rejecting the grant of registration application made by the appellant trust in Form 10AB of the Income Tax Act, 1961 without giving reasonabl the rejection order was passed in a hasty manner due to statutory limitation and is against the principle of natural justice and ought to be set aside.” 3. At the outset, the Ld. counsel for the assessee submitted that appeal has been filed the delay of 434 days. The Ld. counsel for the assessee referred to the application for condonation of the delay and submitted that the trustees of the Trust are retired teachers who previously served in other schools. The Trust u/s 12A of the Act dated 06.04.1994, h provisions of the Act, registration in Form No. 10AC on 08.02.2022. The assessee applied for final registration been disposed off by the Ld. CIT(E) on 29.09.2022. order of the rejection of the Registration was came to the notice of the assessee only on 12.01.2024 proceedings for assessment year 2022 to the application for the condonation of the delay and submitted that the delay was not deliberate and therefore, delay should be condoned. 4. The Ld. Departmental Represent objected for the condonation of the delay. Maooli Education Foundation The relevant ground raised by the assessee is The Ld. CIT (Exemption) erred in rejecting the grant of registration application made by the appellant trust in Form 10AB of the Income Tax Act, 1961 without giving reasonable opportunity of being heard. That the rejection order was passed in a hasty manner due to statutory limitation and is against the principle of natural justice and ought to be At the outset, the Ld. counsel for the assessee submitted that peal has been filed the delay of 434 days. The Ld. counsel for the assessee referred to the application for condonation of the delay and submitted that the trustees of the Trust are retired teachers who previously served in other schools. The Trust was ear 2A of the Act dated 06.04.1994, however due to provisions of the Act, the assessee was granted provisional registration in Form No. 10AC on 08.02.2022. The assessee applied for final registration in Form No. 10AB on 31.03.2022 disposed off by the Ld. CIT(E) on 29.09.2022. order of the rejection of the Registration was came to the notice of the assessee only on 12.01.2024 , while attending proceedings for assessment year 2022-23. The Ld. counsel referred to the application for the condonation of the delay and submitted that the delay was not deliberate and therefore, delay should be The Ld. Departmental Representative (DR) on the other hand the condonation of the delay. Maooli Education Foundation 2 ITA No. 514/MUM/2024 is reproduced as The Ld. CIT (Exemption) erred in rejecting the grant of registration application made by the appellant trust in Form 10AB of the Income Tax e opportunity of being heard. That the rejection order was passed in a hasty manner due to statutory limitation and is against the principle of natural justice and ought to be At the outset, the Ld. counsel for the assessee submitted that peal has been filed the delay of 434 days. The Ld. counsel for the assessee referred to the application for condonation of the delay and submitted that the trustees of the Trust are retired teachers who was earlier registered due to change of the the assessee was granted provisional registration in Form No. 10AC on 08.02.2022. The assessee applied .2022, which has disposed off by the Ld. CIT(E) on 29.09.2022. But, the said order of the rejection of the Registration was came to the notice of , while attending to assessment 23. The Ld. counsel referred to the application for the condonation of the delay and submitted that the delay was not deliberate and therefore, delay should be ative (DR) on the other hand 5. We have heard rival submission of the parties on the issue of condonation of the delay in filing appeal. The reasons cited by the assessee in its application “6. The appellant was unaware of any such notice and order being passed in its case. Furthermore, qualified staff to handle the compliances oversight of the email containing the order. The managing trus Mr Arjun Vidhate, aged 75 years is the only one actively involved in managing the functioning of the trust. However, Vidhate is not technically conversant with the online process. He suffers from various health like high blo a catheter for urination several times a day, as well as needing an enema for bowel movements. Owing to these health reasons and age on his side, both the notice and rejection order went oversight 7 The appellant became aware of the order only upon receiving the show cause notice dated 12.01.2024 for AY: 2022 wherein the Ld. Assessing Officer proposed to disallow exemption u/s. 11 of the Income Tax Act, 1961, owing to rejection dated 29.09.2022. Upon disco referred the matter to a Chartered Accountant and took necessary actions to file the present appeal. 8 The delay is attributable to the above was unintentional. If the delay is not condoned, it woul significantly jeopardize the functioning of the school. Approximately 300 underprivileged students, who rely on the appellant trust for education and support, would also be adversely affected by such consequences.” 5.1 On perusal of the above, it is evid the Ld. CIT(A) was communicated through e be noticed by the managing trustee medical ailments. The Ld. counsel for the assessee has filed a certificate from doctor regarding trustee, which is available on page No. 2 of the Paper Book. We find Maooli Education Foundation We have heard rival submission of the parties on the issue of condonation of the delay in filing appeal. The reasons cited by the assessee in its application for the delay is reproduced as under: “6. The appellant was unaware of any such notice and order being passed in its case. Furthermore, the trust lacks the qualified staff to handle the compliances, resulting in the oversight of the email containing the order. The managing trus Mr Arjun Vidhate, aged 75 years is the only one actively involved in managing the functioning of the trust. However, Vidhate is not technically conversant with the online process. He suffers from various health-related problems like high blood pressure, diabetes, and requires the use of a catheter for urination several times a day, as well as needing an enema for bowel movements. Owing to these health reasons and age on his side, both the notice and rejection order went oversight. lant became aware of the order only upon receiving the show cause notice dated 12.01.2024 for AY: 2022 wherein the Ld. Assessing Officer proposed to disallow exemption u/s. 11 of the Income Tax Act, 1961, owing to rejection dated 29.09.2022. Upon discovering this, the appellant promptly referred the matter to a Chartered Accountant and took necessary actions to file the present appeal. 8 The delay is attributable to the above-mentioned reasons and was unintentional. If the delay is not condoned, it woul significantly jeopardize the functioning of the school. Approximately 300 underprivileged students, who rely on the appellant trust for education and support, would also be adversely affected by such consequences.” On perusal of the above, it is evident that the order passed by the Ld. CIT(A) was communicated through e-mail which could not by the managing trustee, who was suffering from various The Ld. counsel for the assessee has filed a certificate from doctor regarding the medical conditions which is available on page No. 2 of the Paper Book. We find Maooli Education Foundation 3 ITA No. 514/MUM/2024 We have heard rival submission of the parties on the issue of condonation of the delay in filing appeal. The reasons cited by the duced as under: “6. The appellant was unaware of any such notice and order the trust lacks the , resulting in the oversight of the email containing the order. The managing trustee, Mr Arjun Vidhate, aged 75 years is the only one actively involved in managing the functioning of the trust. However, Mr. Arjun Vidhate is not technically conversant with the online related problems od pressure, diabetes, and requires the use of a catheter for urination several times a day, as well as needing an enema for bowel movements. Owing to these health reasons and age on his side, both the notice and lant became aware of the order only upon receiving the show cause notice dated 12.01.2024 for AY: 2022-23, wherein the Ld. Assessing Officer proposed to disallow exemption u/s. 11 of the Income Tax Act, 1961, owing to rejection vering this, the appellant promptly referred the matter to a Chartered Accountant and took mentioned reasons and was unintentional. If the delay is not condoned, it would significantly jeopardize the functioning of the school. Approximately 300 underprivileged students, who rely on the appellant trust for education and support, would also be ent that the order passed by mail which could not who was suffering from various The Ld. counsel for the assessee has filed a conditions of the which is available on page No. 2 of the Paper Book. We find that the assessee noticed the order of the Ld. CIT(E) only course of assessment proceedings for when the AO proposed to disa owning to rejection circumstances, we find that there is in filing the appeal and assessee would not be benefited in any manner by way of delaying substantial justice, we condone the admit the appeal for adjudication on merit. 6. As far as the ground of the appeal of not providing reasonable opportunity to the assessee is concerned, we find that the assessee had filed the application in Form No. 10AB on 31.03.2022 whereas the Ld. CIT(E) issued show cause notice only on 25.09.2022 f the case on 26.09.2022 and application has been disposed on 29.09.2022. The period of one day given to the assessee complying the show cause notice is not sufficient and therefore, the Ld. CIT(E) is not justified in rejecting the application of t without providing a reasonable opportunity to the assessee. Accordingly, we set aside the finding of the Ld. CIT(E) on t in dispute and restore of registration of the assessee trust after pr opportunity of being heard to the assessee. The ground of appeal of the assessee is accordingly allowed for statistical purposes. Maooli Education Foundation that the assessee noticed the order of the Ld. CIT(E) only assessment proceedings for assessment year 2022 proposed to disallow exemption u/s 11 of the Act rejection of registration dated 29.02.2022. In the circumstances, we find that there is a bonafide reason in filing the appeal and assessee would not be benefited in any by way of delaying the filing of the appeal. In the interest of substantial justice, we condone the delay in filing the appeal and admit the appeal for adjudication on merit. As far as the ground of the appeal of not providing reasonable opportunity to the assessee is concerned, we find that the assessee had filed the application in Form No. 10AB on 31.03.2022 whereas the Ld. CIT(E) issued show cause notice only on 25.09.2022 f the case on 26.09.2022 and application has been disposed on 29.09.2022. The period of one day given to the assessee complying the show cause notice is not sufficient and therefore, the Ld. CIT(E) is not justified in rejecting the application of t without providing a reasonable opportunity to the assessee. Accordingly, we set aside the finding of the Ld. CIT(E) on t in dispute and restore the matter back to him for deciding the registration of the assessee trust after providing adequate opportunity of being heard to the assessee. The ground of appeal of the assessee is accordingly allowed for statistical purposes. Maooli Education Foundation 4 ITA No. 514/MUM/2024 that the assessee noticed the order of the Ld. CIT(E) only in the assessment year 2022-23, llow exemption u/s 11 of the Act dated 29.02.2022. In the a bonafide reason for the delay in filing the appeal and assessee would not be benefited in any the filing of the appeal. In the interest of delay in filing the appeal and As far as the ground of the appeal of not providing reasonable opportunity to the assessee is concerned, we find that the assessee had filed the application in Form No. 10AB on 31.03.2022 whereas the Ld. CIT(E) issued show cause notice only on 25.09.2022 fixing the case on 26.09.2022 and application has been disposed on 29.09.2022. The period of one day given to the assessee for complying the show cause notice is not sufficient and therefore, the Ld. CIT(E) is not justified in rejecting the application of the assessee without providing a reasonable opportunity to the assessee. Accordingly, we set aside the finding of the Ld. CIT(E) on the issue the matter back to him for deciding the issue oviding adequate opportunity of being heard to the assessee. The ground of appeal of the assessee is accordingly allowed for statistical purposes. 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the o Sd/- (RAJ KUMAR CHAUHAN JUDICIAL MEMBER Mumbai; Dated: 30/05/2024 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Maooli Education Foundation In the result, the appeal of the assessee is allowed for Order pronounced in the open Court on 30/05/2024. Sd/ (RAJ KUMAR CHAUHAN) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Maooli Education Foundation 5 ITA No. 514/MUM/2024 In the result, the appeal of the assessee is allowed for /05/2024. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai