LATUR MAHESHWARI MAHASABHA,LATUR V. COMMISSIONER OF INCOME TAX EXEMPTION, PUNE

ITA 1749/PUN/2024

AI Insights

The case involves the Latur Maheshwari Mahasabha, a charitable trust, appealing against the order of the Commissioner of Income Tax (Exemption), Pune, which rejected their application for registration under section 12AB of the Income Tax Act, 1961. The rejection was primarily due to the trust's failure to respond to notices requesting information to verify the genuineness of its activities. The trust argued that the non-compliance was unintentional, citing issues with communication and administrative oversight. The Tribunal, considering the principles of substantial justice and the precedents set by the Supreme Court, decided to condone the delay in filing the appeal and restored the matter to the CIT(E) for a fresh decision on merits after allowing the trust another opportunity to present its case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 28935 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2023-2024
• Other Referred Cases: Collector, Land Acquisition vs. Mst. Katiji & Ors. reported in 167 ITR 471 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMOL KHAIRNAR
• Assessee Lawyers: RAJENDRA AGIWAL
• Keywords: Condonation of delay; Charitable institution
• Section: 80G

Judgement Text

" आयकर अपीलीय अधिकरण “ए” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI R.K. PANDA, VICE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / ITA No.1749/PUN/2024 धििाारण वर्ा / Assessment Year : 2023-24 Latur Maheshwari Mahasabha, Gawali Galli, Near Central Hanuman, Latur – 413512 PAN : AAATM5573A Vs. CIT(Exemption), Pune अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Rajendra Agiwal Department by : Shri Amol Khairnar Date of hearing : 03-12-2024 Date of Pronouncement : 20-02-2025 आदेश / ORDER PER ASTHA CHANDRA, JM : The appeal filed by the assessee is directed against the order dated 12.07.2023 of the Ld. Commissioner of Income Tax (Exemption), Pune [“CIT(E)”] whereby he rejected the application of the assessee filed before him on 10.01.2023 in Form No. 10AB under clause (iii) of section 12A(1)(ac) of the Income Tax Act, 1961 (the “Act”). 2. The assessee has filed this appeal with a delay of 345 days. The assessee has filed a sworn affidavit seeking condonation of delay in filing of the appeal stating therein the reasons for delay as under : “4. That there has been a delay in filing the said appeal. The delay occurred due to the following reasons: a) The notices regarding the application were sent only via email to the appellant's treasurer, who unfortunately failed to respond to them in a timely manner. b) The Trust had engaged CA Shri Pandurang Kabra as a consultant to handle all matters related to the 12AB and 80G registrations. However, it seems Mr. Kabra may not have fully understood his responsibilities. Despite his office having a functional email address, notices sent there regarding these registrations appear to have been overlooked, and the Trust was not informed. Consequently, the Trust failed to comply with 2 ITA No.1749/PUN/2024, AY 2023-24 notices from the Commissioner of Income Tax (Exemption), Pune, resulting in the rejection of both the 12AB and 80G registration applications. c) No physical notices were sent via post to the appellant's registered address, resulting in a communication gap. d) The appellant, being a charitable organization with limited administrative resources, took time to understand the legal intricacies and to gather the necessary documents and Information required tofile a comprehensive appeal. 5. That the delay in filing the appeal is neither willful nor deliberate but to the reasons stated above, which are beyond the control of the appellant. 6. That the appellant has a strong case on merits and substantial grounds to contest the order passed by the Commissioner of Income Tax (Exemption), Pune. 7. That if the delay is not condoned, the appellant will suffer irreparable loss and injury. On the other hand, if the delay is condoned, no prejudice will be caused to the respondent. 8. That this application for condonation of delay is made bona fide and in the interest of justice. 9. That the appellant prays that the delay in filing the appeal may kindly be condoned, and the appeal be admitted for hearing.” 2.1 After hearing both the sides and considering the above submissions made by the assessee, we are of the view that the delay is not intentional or deliberate but attributable to the „sufficient cause‟. The Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. reported in 167 ITR 471 (SC) has held that when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. We, therefore, following this decision of Hon'ble Supreme Court, condone the delay in filing of the appeal and proceed to decide the appeal. 3. The assessee has raised the following concise grounds of appeal:- “Prayer for condonation of delay 1. The Appellant submits that there is a delay in filing the appeal for a period of 406 days. Considering the sufficient cause as stated in the affidavit executed on 21.08.2024 and filed before the Hon'ble bench on 21.08.2024 the Appellant prays that the delay may kindly be condoned in the interest of justice. 3 ITA No.1749/PUN/2024, AY 2023-24 Grounds on merits 2. The Appellant is registered under \"Bombay Public Trust Act, 1959\" vide registration dated 22.07.1998 and registered under \"The Societies Registration Act, 1860\" registration dated 08.06.1998 is eligible for seeking registration u/s 12AB of the Income Tax Act. The objects and activities of the Trust are charitable. The relief under Income Tax Act may kindly be granted. 3. In the facts and circumstances of the case and in law the order passed by the Ld. CIT(E) rejecting the registration u/s 12AB and thereby the cancelling the provisional registration may kindly be restored back for granting fresh opportunity to submit the requisite details and grant the registration. 4. The Ld. CIT(E) issued the notices vide notice dated 03.07.2023 and 10.07.2023 on email/ITBA Portal. The Appellant inadvertently missed the opportunities through the aforesaid notices to submit the details. The Appellant submits that the Ld. CIT(E) erred in arriving at doubtful conclusion about genuineness of activities of the trust. It is submitted that the matter may kindly be restored to explain the genuineness of activities of the trust and grant the registration. 5. The Appellant submits that in the era of faceless regime of assessment etc. Non availing the opportunity to attend the notices issued on email/ITBA Portal is common problem. The Appellant prays for the relief as per the law. The Appellant craves, leave to add, alter, omit, modify, delete, all, or any of the grounds of appeal on or before hearing.” 4. Briefly stated, the facts of the case are that the assessee is formed as Public Charitable Trust at Latur District in Maharashtra in the year 1997-98 with the objective of establishing educational institute, research centre on various subjects for the society at large and running of the hostels for the benefit of students and providing scholarships to students etc. The assessee trust is registered under Bombay Public Trust Act, 1950 w.e.f. 20.07.1998. It is also registered under the Societies Registration Act, 1860 vide registration certificate dated 09.06.1998. On receipt of application filed in Form No. 10AB u/s 12A(1)(ac)(iii) of the Act on 10.01.2023 along with annexures thereto, with a view to verify the genuineness of activities of the assessee trust and compliance to requirements of any other law for the time being in force by the trust, the Ld. CIT(E) issued a notice through ITBA portal on 13.04.2023 requesting the assessee to upload certain information/ clarification stated therein. The assessee was requested to submit its compliance by 28.04.2023. However, the assessee failed to respond. The Ld. CIT(E) therefore issued another notice on 03.07.2023 requesting the assessee to show cause as to why the application should not be rejected and why the registration granted u/s 12AB of the Act should not be cancelled. The assessee was requested to 4 ITA No.1749/PUN/2024, AY 2023-24 submit compliance by 10.07.2023. The notice(s) were duly served on the assessee though e-portal and email. However, the assessee once again failed to respond to the said show cause notice. Hence, in the absence of information/details called for under the provisions of section 12AB(1)(b)(i) of the Act, the Ld. CIT(E) observed that it is not possible to arrive at any satisfactory conclusion about the genuineness of the activities of the assessee trust and the compliance to the requirements of any other law for the time being in force by the trust/institution as are material for the purpose of achieving its objects and rejected the assessee‟s application for registration and also cancelled the provisional registration granted on 10.03.2022 by observing as under: “3.3 It is clear from the above that the assessee was given sufficient opportunity to comply, but it has not complied to the same. It seems that the assessee is not having any supporting documents/evidence to submit. The assessee has failed to comply with the provisions of section 12AB(1)(b)(i) of the Act. Hence, the undersigned is unable to draw any satisfactory conclusion about genuineness of activities of the assessee and the compliance to the requirements of any other law for the time being in force by the trust/institution as are material for the purpose of achieving its objects. Therefore, the undersigned has left no alternative but to reject the application.” 5. Aggrieved, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto. 6. The Ld. AR submitted that the non-compliance before the Ld. CIT(E) was not intentional. The Ld. CIT(E) issued two notices, first notice on 03.04.2023 and the second notice on 28.04.2023 via e-portal/email. However, these notices were inadvertently missed by the assessee due to which no submissions/details were furnished before the Ld. CIT(E). He, therefore prayed that the matter may be restored back to the file of the Ld. CIT(E) for granting one more opportunity to submit the requisite details and decide the application of the assessee afresh on merits. 7. The Ld. DR, on the other hand, submitted that ample opportunities were granted by the Ld. CIT(E) but the assessee failed to avail them. Therefore, the order of the Ld. CIT(E) be upheld. 8. We have heard the Ld. Representative of the parties, perused the material on record. We observe that the Ld. CIT(E) issued two notices to the assessee but both remained uncomplied with. The Ld. CIT(E), therefore, drawn an adverse inference and rejected the application made u/s 12AB and also 5 ITA No.1749/PUN/2024, AY 2023-24 cancelled the provisional registration granted on 10.03.2022. before us, the Ld. Counsel for the assessee has submitted that the non-compliance before the Ld. CIT(E) was completely unintentional as these notices were inadvertently missed by the assessee. He further submitted that the assessee has a strong case on merits and therefore an opportunity may be granted to the assessee to file the requisite details/submissions before the Ld. CIT(E). Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the matter to the file of the Ld. CIT(E) with a direction to grant one final opportunity to the assessee to substantiate its case by filing requisite details and decide the issue as per fact and law after giving due opportunity of being heard to the assessee. The assessee is also hereby directed to make its submissions if any before the Ld. CIT(E) on the appointed date without seeking any adjournment under any pretext, failing which the Ld. CIT(E) shall be at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes. 9. In the result, the appeal of assessee is treated as allowed for statistical purposes. Order pronounced in the open court on 20th February, 2025. Sd/- Sd/- (R.K. Panda) (Astha Chandra) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; दिन ांक / Dated : 20th February, 2025. रदि आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : 1. अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 5. ग र्ड फ़ इल / Guard File. //सत्य दपि प्रदि// True Copy// आिेश नुस र / BY ORDER, िररष्ठ दनजी सदचि / Sr. Private Secretary आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune "