MAHARSHI YAGYAVALKYA GYANPEETH,AHMEDABAD V. THE CIT(EXEMPTION), AHMEDABAD

ITA 2103/AHD/2024

AI Insights

The case involves Maharshi Yagyavalkya Gyanpeeth, a registered trust, which appealed against the orders of the CIT(Exemption), Ahmedabad, rejecting its applications for registration under section 12AB and approval under section 80G(5) of the Income-tax Act, 1961. The appeals were consolidated due to their interconnected facts. The tribunal found that the orders were passed ex parte without effective service of notice, thus violating the principles of natural justice. The tribunal noted that the assessee was unaware of the rejection of its applications until a show cause notice in assessment proceedings was received, leading to the filing of appeals with a delay that was deemed unintentional and substantiated.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712796 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: misc
• Other Referred Cases: Collector, Land Acquisition vs. Mst. Katiji [(1987) 167 ITR 471 (SC)]
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHER SINGH
• Assessee Lawyers: MEHUL THAKKER
• Keywords: Condonation of delay; Set aside; Principle of natural justice
• Section: 12A; 80G

Judgement Text

"आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण,अहमदाबाद \bयायपीठ अहमदाबाद \bयायपीठ अहमदाबाद \bयायपीठ अहमदाबाद \bयायपीठ ‘D’ अहमदाबाद। अहमदाबाद। अहमदाबाद। अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD ]BEFORE MS.SUCHITRA R. KAMBLE, JUDICIAL MEMBER AND SHRI MAKARAND V.MAHADEOKAR, ACCOUNTANT MEMBER ITA No.2102 and 2103/Ahd/2024 Asstt.Year : - Maharshi Yagyavalkya Gyanpeeth A-102, Dev Prayag Opp: Shanti Juniyars School Motera Bhat Link Road Koteshwar, Ahmedabad. PAN : AAFTM 2704 E Vs. The CIT(Exemption) Vejalpur Ahmedabad. (Applicant) (Responent) Assessee by : Shri Mehul Thakker, AR Revenue by : Shri Sher Singh, CIT-DR सुनवाई क तारीख/Date of Hearing : 24/07/2025 घोषणा क तारीख /Date of Pronouncement: 29/07/2025 आदेश आदेश आदेश आदेश/O R D E R PER MAKARAND V.MAHADEOKAR, AM: These two appeals have been preferred by the assessee against two separate orders passed by the Ld. Commissioner of Income-tax (Exemption), Ahmedabad, namely: Order dated 18.09.2023 passed under section 12AB of the Act, whereby the assessee’s application in Form No. 10AB for regular registration under section 12A(1)(ac)(iii) was rejected and provisional registration granted under section 12A(1)(ac)(vi) was cancelled and Order dated 22.09.2023 passed under section 80G(5) of the Income-tax Act, 1961, whereby the assessee’s application in Form No. 10AB was rejected and provisional approval under section 80G(5)(iv) was cancelled. The facts in both appeals are interconnected and the appeals were heard together. Printed from counselvise.com ITA No.2102 and 2103/Ahd/2024 2 Therefore, they are being disposed of by this consolidated order for the sake of convenience. 2. Condonation of Delay 2.1 The appeals were filed on 12.12.2024. As per the Registry note, there is a delay of 391 days in ITA No. 2102]/Ahd/2025 (relating to section 12AB order dated 18.09.2023) and 387 days in ITA No. 2103/Ahd/2025 (relating to section 80G order dated 22.09.2023). In support of the condonation petition, the assessee filed a duly sworn affidavit dated 23.07.2025 from its trustee, Shri Koirala Deepak Lekhnath, wherein it has been affirmed that the assessee never received the notices dated 22.07.2023, 22.08.2023 and 12.09.2023 allegedly issued by the CIT(Exemption) before passing the impugned orders. The assessee came to know of the rejection and cancellation of its 12AB and 80G applications only upon receiving a show cause notice dated 22.11.2024 issued in the assessment proceedings for A.Y. 2023-24 (DIN: ITBA/AST/F/143(3)(SCN)/2024-25/1070553163(1)) issued by the Assessment Unit of National Faceless Assessment Centre. The said notice explicitly refers to the rejection orders passed by CIT(Exemption). The appeals were promptly filed thereafter on 12.12.2024. 2.2 In support of the claim that no notices were served, the AR placed on record PDF printouts of the alleged notices downloaded from the assessee’s e-filing portal, namely: • Notice dated 22.07.2023 (DIN: 1054527654) • Notice dated 22.08.2023 (DIN: 1055318647) • Notice dated 12.09.2023 (DIN: 1056008597) 2.3 These downloaded files are devoid of any email address, communication delivery detail, or dispatch metadata and they merely reflect the document file names without confirming actual service or issuance of notice. Printed from counselvise.com ITA No.2102 and 2103/Ahd/2024 3 2.4 We further noted that the Revenue has not produced any proof of email delivery, SMS communication, postal dispatch, or acknowledgment evidencing that the notices were actually served on the assessee. In such circumstances, in absence of proof of valid service, the assessee’s plea that it remained unaware of the rejection orders till 22.11.2024 cannot be brushed aside as untenable. It is a settled principle of law that effective service of notice or order is a precondition for the limitation under section 253(3) to commence. We are of the opinion that technical delay should not defeat substantive rights if sufficient cause is shown. In case of Collector, Land Acquisition vs. Mst. Katiji [(1987) 167 ITR 471 (SC)], the Apex Court emphasised a liberal and justice-oriented approach while deciding applications for condonation of delay. 2.5 In the instant case, the delay is unintentional, as it is occasioned by non-service of orders; Not deliberate, as appeals were filed promptly after becoming aware of the orders; Substantiated, through both affidavit and documentary material; Unopposed, since no contrary evidence of valid service has been produced by Revenue. In view of the above facts and settled legal position, we are satisfied that the delay in both appeals deserves to be condoned in the interest of substantial justice. 3. Brief Facts of the Case 3. The assessee, a registered trust, had filed applications in Form No. 10AB for (i) regular registration under section 12AB of the Income-tax Act, 1961, and (ii) approval under section 80G(5)(iii). The assessee was earlier granted provisional registration under section 12A(1)(ac)(vi) on 24.01.2023 and provisional approval under section 80G(5)(iv) on 06.03.2023 for the period A.Y. 2023–24 to A.Y. 2025–26. The CIT(Exemption), Ahmedabad, passed the following two orders: i. Order dated 18.09.2023 rejecting the assessee’s application under section 12AB on the ground that the assessee failed to respond to notices and did not establish the genuineness of its activities. Printed from counselvise.com ITA No.2102 and 2103/Ahd/2024 4 ii. Order dated 22.09.2023 rejecting the application under section 80G(5)(iii) and cancelling the provisional approval granted earlier, on the ground that the assessee did not possess a valid registration under section 12A at the relevant time and the application was filed belatedly. In both cases, the orders were passed without any appearance by the assessee and proceeded ex parte. 4. Aggrieved by the said orders, the assessee has preferred the present appeals before us raising following grounds of appeal: In ITA No. 2102/Ahd/2024 1. The Ld. CIT-Exemption, Ahmedabad has erred in law in rejecting the application for registration of the trust u/s 12A of the IT Act on the ground that appellant failed to respond the various notices, however, the fact is that no such notices had been served on the appellant. 2. The appellant craves leave to add, alter or delete any ground either before or in the course of hearing of the appeal. In ITA No. 2102/Ahd/2024 1. The Ld. CIT-Exemption, Ahmedabad has erred in law in rejecting the application for registration of the trust u/s 80G(5) (iii) of the Income Tax Act on the ground that appellant does not have any valid order for registration u/s. 12A(1)(ac) (ii) of the Act in form No.10AD. 2. The appellant craves leave to add, alter or delete any ground either before or in the course of hearing of the appeal. 5. During the course of hearing before us the Learned Authorised Representative submitted that the impugned orders were passed without affording any effective opportunity of hearing, as the alleged notices were never served upon the assessee. It was contended that the delay in filing the appeals was not deliberate but occasioned due to lack of knowledge of the orders, which came to light only upon receipt of the show cause notice in assessment proceedings dated 22.11.2024. In support, the AR relied on a duly sworn affidavit and submitted that the downloaded copies of the notices from the assessee’s login do not reflect any valid service details, such as dispatch date or recipient email, as mandated under Rule 127 of Printed from counselvise.com ITA No.2102 and 2103/Ahd/2024 5 the Income-tax Rules. It was further contended that the CIT(Exemption) erred in rejecting the 80G application merely on the ground of absence of valid 12AB registration, when the application for registration under section 12AB itself was simultaneously rejected without adjudication on merits. The AR thus urged that both matters may be restored for fresh decision after affording reasonable opportunity. 5.1 The Learned Departmental Representative did not raise any objection to the assessee’s request for restoring both matters to the file of the CIT(Exemption) for fresh consideration. 6. We have considered the rival contentions and perused the record. It is evident that both impugned orders were passed ex parte, purportedly on the basis of non-compliance by the assessee. However, in the absence of conclusive evidence of valid service of notice in accordance with Rule, basis for presuming opportunity granted becomes untenable. On various judicial forums it is consistently held that uploading of notices without corresponding proof of dispatch or delivery does not amount to effective service. Rejection of statutory applications under section 12AB and section 80G(5) without ensuring compliance with principles of natural justice vitiates the proceedings at the threshold. 6.1 Further, the rejection of the 80G application on the ground of absence of valid registration under section 12A(1)(ac)(ii), while the registration application itself stood rejected in parallel, renders both orders interdependent. In our view, it was incumbent upon the Ld. CIT(Exemption) to adjudicate both applications on merits, after granting an effective opportunity of hearing. 6.2 The assessee has brought on record sufficient material to explain the cause of delay, and we are satisfied that the delay is neither deliberate nor negligent. The Department has not disputed the assessee’s explanation or produced any contrary evidence. In such circumstances, the delay deserves to be condoned and the matters remanded for fresh consideration. Printed from counselvise.com ITA No.2102 and 2103/Ahd/2024 6 6.3 Accordingly, we are of the considered view that both matters require restoration to the file of the CIT(Exemption), Ahmedabad, to be decided afresh in accordance with law and after affording adequate opportunity to the assessee. 6.4 In the result the delay in filing both the appeals is condoned; the impugned orders passed by the CIT(Exemption), Ahmedabad are hereby set aside; Both matters are restored to the file of the CIT(Exemption), Ahmedabad, with a direction to decide the respective applications afresh after providing due opportunity of hearing to the assessee and in accordance with law. 7. In the combined result both appeals are allowed for statistical purposes. Order pronounced in the Court on 29th July, 2025 at Ahmedabad. Sd/- Sd/- (SUCHITRA R. KAMBLE) JUDICIAL MEMBER (MAKARAND V. MAHADEOKAR) ACCOUNTANT MEMBER Ahmedabad, dated 29/07/2025 vk* Printed from counselvise.com "