I M C of I T I, Arvalli V. The CIT (Exemption), Ahmedabad

ITA 596/AHD/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 5209 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 07-08-2024
• Assessment Year: misc
• Appeal Filed On: 01-04-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Set aside
• Section: 80G; 12A

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “DIVISION BENCH-C” AHMEDABAD Before: Shri Ramit Kochar, Accountant Member & Shri Siddhartha Nautiyal, Judicial Member IMC OF ITI Malpur Road,Meghraj Arvalli-383350 , Gujarat PAN:AAAT19028C (Appellant) v. The Commissioner of Income Tax (Exemption) Room No. 609, Floor-6, Aayakar Bhawan(Vejalpur), Near Sachin Tower, 100 Ft Road, Anandnagar- Prahladnagar Road, Ahmedabad-380015, Gujarat (Respondent) Assessee by:None(Adjournment Application-Rejected) Revenue by: Shri Kamlesh Makwana, CIT-DR Date of hearing : 08-08-2024 Date of pronouncement : 08-08-2024 आदेश/ORDER These two appeals in ITA No.596-597/Ahd/2024 for assessment year:NA, filed by the assessee before Income Tax Appellate Tribunal, Ahmedabad Division Bench, Ahmedabad ITA No. 596 & 597/Ahd/2024 Assessment Year: NA I.T.A No.596-597/Ahd/2024 A.Y.:NA Page No. IMC OF ITI 2 has arisen from two separate orders dated 18.09.2023 and 22.09.2023 respectively passed by Ld. Commissioner of Income-tax(Exemption), Ahmedabad, firstly order dated 18.09.2023 passed by ld. CIT(E) in DIN & Notice No. ITBA/EXM/F/EXM45/2023-24/1056210217(1) dismissing application filed by the assessee in Form No. 10AB u/s 12A(1) (ac)(iii) of the 1961 Act for grant of registration u/s 12AB of the 1961 Act wherein provisional registration earlier granted also stood cancelled by ld. CIT(E), and secondly order dated 22.09.2023 passed by ld. CIT(E) in DIN and Notice No. ITBA/EXM/F/ EXM45/2023-24/1056438836(1) rejecting application in Form No. 10AB u/s 80G(5) of the 1961 Act for grant of approval u/s 80G(5) wherein also provisional approval earlier granted in Form No. 10AC under clause (iv) of the first proviso to sub-section (5) of Section 80G stood cancelled by ld. CIT(E). 2. The grounds of appeal raised by the assessee in Memo of Appeal filed with the Income Tax Appellate Tribunal, Ahmedabad Bench, Ahmedabad in ITA no. 596/Ahd/2024 for assessment year:NA, reads as under:- “1. It is the duty of office to consider all the facts while passing the order for 12A , which is not done in our case. Due to that reason, we have applied for appeal before your honor. I.T.A No.596-597/Ahd/2024 A.Y.:NA Page No. IMC OF ITI 3 2.The Ld. CIT(exemption) has passed order for rejection u/s 12A. 3. The appellant has not received any notice or communication for hearing via email, message any by post from the department. 4. We may be allowed to add or alter or modify the ground of appeal. PRAYER 1. To instruct the Ld. CIT(exemption) to give opportunity for being heard and allow for registration process u/s. 12A. 2. We may be allowed to add or alter or modify the ground of appeal. 3. To give such other relief as may be necessary.” 2.2.The grounds of appeal raised by the assessee in Memo of Appeal filed with the Income Tax Appellate Tribunal, Ahmedabad Bench, Ahmedabad in ITA no. 597/Ahd/2024 for assessment year:NA, reads as under:- “1. It is the duty of office to consider all the facts while passing the order for 80G(5) , which is not done in our case. Due to that reason, we have applied for appeal before your honor. 2.The Ld. CIT(exemption) has passed order for rejection u/s 80G(5). 3.The appellant has not received any notice or communication for hearing via email, message any by post from the department. I.T.A No.596-597/Ahd/2024 A.Y.:NA Page No. IMC OF ITI 4 4.We may be allowed to add or alter or modify the ground of appeal. PRAYER 1. To instruct the Ld. CIT(exemption) to give opportunity for being heard and allow for registration process u/s. 80G(5). 2. We may be allowed to add or alter or modify the ground of appeal. 3. To give such other relief as may be necessary.” 3.At the outset it is noted that these two appeals are filed belatedly by the assessee beyond the time prescribed u/s 253(3) of the 1961 Act. The appeal in ITA No. 596/Ahd/2023 is filed belatedly by 137 days , while appeal in ITA no. 597/Ahd/2023 is filed belatedly by 133 days. In both these appeals , separate affidavits are filed by the assessee praying for condonation of delay. The reasons given by the assessee in its affidavits both dated 08.04.2024 as well 20.04.2024 are that the assessee did not open the ITBA portal as also that the assessee never received the notices of hearing issued by ld. CIT(E) by email, message or post etc, thus, in nutshell , the assessee has claimed that it was not aware of the actual proceedings being undertaken by ld. CIT(E). The assessee has averred that there is a delay in filing this appeal with ITAT I.T.A No.596-597/Ahd/2024 A.Y.:NA Page No. IMC OF ITI 5 belatedly beyond the time prescribed u/s 253(3) , but there was no ill-motive in filing this appeal belatedly with ITAT. The ld. CIT-DR fairly submitted that the department has no serious objection to the condonation of delay in filing these two appeals belatedly by the assessee. Under these facts and circumstances, we are of the considered view that the assessee has shown reasonable and sufficient cause in filing these two appeals belatedly with ITAT beyond the time stipulated u/s 253(3), and delay needs to be condoned and the appeals be heard on merits. When technicalities are pitted against the substantial justice, the Courts will lean towards advancement of substantial justice rather than technicalities, unless the malafide on the part of the assessee is at writ large. Under the facts and circumstances, we do not find any malafide on the part of the assessee in filing these two appeals belatedly, and in the interest of justice, we condone the delay w.r.t. both these appeals and proceed to adjudicate these appeal on merits in accordance with law. Reference is drawn to the decision of Hon’ble Supreme Court in the case of Collector of Land Acquisition, Anantnag v. Mst. Katiji (1987 AIR 1353(SC)). 4.First , we shall take up appeal of the assessee in ITA no. 596/Ahd/2024 for assessment year:N.A.. The brief facts of the case are that the assessee filed an application for registration I.T.A No.596-597/Ahd/2024 A.Y.:NA Page No. IMC OF ITI 6 of the trust u/s 12AB of the 1961 Act, vide application No. CIT(Exemption), Ahmedabad/2023-24/12AA/11433 on 29.03.2023 , in Form No. 10AB u/s 12A(1)(ac)(iii). The provisional registration was granted by Revenue on 06.04.2022 as per Form No. 10AC u/s 12A(1)(ac)(vi) from assessment year 2022-23 to 2024-25. The ld. CIT(E) issued notice of hearing dated 19.07.2023 and 22.08.2023 , but the assessee did not file any submissions nor sought any adjournment. The ld. CIT(E) gave final opportunity to the assessee vide notice of hearing dated 12.09.2023, but again there was no compliance on the part of the assessee, while led to the rejection of the application by ld. CIT(E) and provisional registration earlier granted also stood cancelled, on the grounds that the assessee has failed to file documentary evidences to enable ld. CIT(E) to satisfy about (i) genuineness of the activities of the trust or institution (ii) that the activities of trust or institution are in consonance with the objects of the trust or institution and (iii) that other laws material for the purpose of achieving objects are complied with. Before proceeding further, it will be relevant to reproduce statement of fact(SOF) filed by the assessee before ITAT along with its memo of appeal, which reads as under: “ An Appellant is trust and engaged in education and charitable activities since incorporation. I.T.A No.596-597/Ahd/2024 A.Y.:NA Page No. IMC OF ITI 7 An appellant has applied for registration u/s 12A of IT Act in form 10A and Form 10AB for trust. The appellant had never opened a portal and not aware about any notice given by office of CIT(Exemption) with reference to registration application u/s 12A of IT Act. but the appellant had not received any notice or communication for hearing via email or message or by post from the department. The appellant had no idea about notice and could not comply or respond the notice uploaded by the CIT(E) on 19/07/2023 , 22/08/2023 and 12/09/2023 with regard to application for registration u/s 12A of IT Act. The department had passed order for rejection for 12A on 18/09/2023.” The assessee vide an affidavit dated 08 th April, 2024 and 20.04.2024(placed on record in file) has made similar averments as in the SOF that the assessee had not received any notice or communication for hearing via email or message or by post from the department and also that the assessee did not open ITBA portal, and thus the assessee had no idea about notice of hearing, which is the reason why the assessee could not comply with the said notices of hearing issued by ld. CIT(E), and prayers are made vide prayer no. 1 filed along with Grounds of Appeal, to instruct ld. CIT(E) to give opportunity of being heard and allow for registration process u/s 12A. Thus, in nutshell, the assessee is praying for setting aside of the order dated 18.09.2023 passed by ld. CIT(E) ,and for grant of proper opportunity of being heard to the assessee before I.T.A No.596-597/Ahd/2024 A.Y.:NA Page No. IMC OF ITI 8 disposing of the application for registration u/s 12AB on merits in accordance with law. It could be seen that the ld. CIT(E) issued three notices , the first notice of hearing was issued by ld. CIT(E) on 19.07.2023 and the order was passed by ld. CIT(E) on 18.09.2023 i.e. within a short span of two months from the date of issue of first notice, rejecting application filed by the assessee for grant of registration u/s 12AB and also the provisional registration earlier granted also stood cancelled by ld. CIT(E) vide aforesaid order. The ld. CIT- DR has no serious objection if the matter is remanded back to the file of ld. CIT(E) for denovo deciding the application of the assessee for grant of registration u/s 12AB filed by the assessee. On perusal of the record carefully, it is observed that the ld. CIT(E) gave three notices for hearing to the assessee i.e. on 19.07.2023, 22.08.2023 and 12.09.2023, but there was no compliance by the assessee, which led to dismissal by ld. CIT(E) of application of the assessee for registration u/s 12AB. It is averred by the assessee that it did not open ITBA portal , and no notices of hearing were received by any mode viz. message or post or email, and to that effect the assessee has filed an affidavit(s) dated 08.04.2024 and 20.04.2024, which are placed on record in file. In our considered view , the assessee ought to have been vigilant once it had filed an application for registration u/s 12AB of the 1961 Act, and at the same time , we have also observed that ld. CIT(E) decided I.T.A No.596-597/Ahd/2024 A.Y.:NA Page No. IMC OF ITI 9 application of the assessee for registration u/s 12AB within short span of two months, and the assessee claimed to have not received any notices through email, message or by post as averred in the aforesaid affidavits. The notices may have been posted by ld. CIT(E) on ITBA portal, but the assessee has claimed that it did not open the portal and hence the assessee was not aware of the proceedings being conducted by ld. CIT(E), which explanation is in the realm of possibility and a plausible reasons , more specially that this is a period of switch over phase wherein the Revenue is moving towards effective utilisation of latest and advanced technologies while handling tax matters and processes at various levels and stages including filing and processing of returns of income, filing and processing of various applications under various provisions of the statute, faceless assessments , faceless adjudication of appeals, and in this switchover phase, there is every possibility that there could be initial hiccups , difficulties, glitches and adaptability to newer technology , which could arise both for the Revenue as well for the assessee, and some time may be required for the things to stabilise and for its adaptability. Thus, keeping in view of reasonable and one of plausible and possible cause cited by the assessee duly supported by affidavits, and in the interest of justice and fairness to both the parties, we are setting aside the order dated 18.09.2023 passed by ld. CIT(E) and restore I.T.A No.596-597/Ahd/2024 A.Y.:NA Page No. IMC OF ITI 10 the matter back to the file of ld. CIT(E) for fresh determination of application filed by the assessee for registration u/s 12AB, after giving proper and reasonable opportunity of being heard to the assessee. The ld. CIT(E) will decide the application on merits in accordance with law. We clarify that we have not commented on the merits of the issue in this appeal, and all the contentions are kept open. The assessee is directed to comply with the notices issued by ld. CIT(E) in the set aside proceedings , otherwise ld. CIT(E) shall be free to decide the application of the assessee on merits in accordance with law. Thus, in the result, the appeal of the assessee is allowed for statistical purposes. We order accordingly. 5. In the result , appeal of the assessee in ITA no. 596/Ahd/2024 for assessment year : NA is allowed for statistical purposes. ITA No. 597/Ahd/2024- Assessment Year:NA 6. Since this appeal deals with the application filed by the assessee for grant of approval u/s 80G(5) , and the facts are similar in this appeal as are in ITA No. 596/Ahd/2024, and hence our decision in ITA No. 596/Ahd/2024 for assessment year: NA vide preceding para’s of this order, shall apply mutatis mutandis to ITA no. 597/Ahd/2024 for assessment I.T.A No.596-597/Ahd/2024 A.Y.:NA Page No. IMC OF ITI 11 year:NA. Thus, in the result, the appeal of the assessee in ITA no. 597/Ahd/2024 for assessment year : NA is allowed for statistical purposes. We order accordingly. 7. In the result , appeal of the assessee in ITA no. 596/Ahd/2024 for assessment year : NA is allowed for statistical purposes. 8.In the result , appeal(s) of the assessee in ITA no. 596 & 597/Ahd/2024 for assessment year(s) : NA are allowed for statistical purposes. Order pronounced on 08.08.2024 at Ahmedabad in Open Court in the presence of ld. CIT-DR on the conclusion of hearing, and reduced to writing and signed on 12.08.2024, at Ahmedabad Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad : Dated : 12/08/2024 आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. I.T.A No.596-597/Ahd/2024 A.Y.:NA Page No. IMC OF ITI 12 By order/आदेश से, उप/सहायक पंजीकार आयकर अपील य अ धकरण, अहमदाबाद