PARNER VIPASSANA SAMITI,AHMEDNAGAR V. CIT (EXEMPTION), PUNE

ITA 1379/PUN/2024

AI Insights

The case involves Parner Vipassana Samiti, which appealed against the rejection of their applications for regular registration under sections 12A and 80G of the Income Tax Act by the Commissioner of Income Tax (Exemption), Pune. The Tribunal found that the rejections were based on procedural grounds, specifically the timing of the applications relative to the issuance of provisional registrations and the applicable deadlines. The Tribunal noted that the appellant was granted provisional registration but failed to meet the subsequent deadlines due to reasons that were beyond their control, such as system glitches. The Tribunal referenced several precedents where similar circumstances led to the acceptance of delayed applications, emphasizing the need for a fair opportunity to comply with procedural requirements.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 473487 (ITAT-PUNE)
• Duration Of Justice: 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-09-2024
• Assessment Year: 2024-2025
• Appeal Filed On: 19-06-2024
• Other Referred Cases: Vijay Vishin Meghani Vs. DCIT & Anr, Collector, Land Acquisition, Anantnag and Anr. Vs Ms Katiji and Others, Smt. Ritu Devi v. CIT, Rotary Club of Akurdi Charitable Trust, Shashvat Paediatric Care Foundation, Sarathi Youth Foundation, Birmani Charitable Foundation, Swachh Vapi Mission Trust Vs CIT(E), TB Lulla Charitable Foundation Vs CIT(E), Gujarat Hira Bourse & Ors, Bhamashah Sundarlal Daga Charitable Trust
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY KUMAR KESARI LD.
• Assessee Lawyers: NIKHIL MUTHA LD.
• Keywords: Condonation of delay; Principle of natural justice; Charitable institution
• Section: 119; 250; 12A; 80G

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, PUNE ‘B’ BENCH, PUNE ITAT-Pune Page 1 of 9 BEFORE HON’BLE SMT ASTHA CHANDRA JUDICIAL MEMBER AND SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.1379 & 1380/PUN/2024 Parner Vipassana Samiti Shop No. 3, Naik Complex, College Rd. East Side, Ahmednagar-414302 PAN: AAETP6187F .......अपीलार्थी / Appellant V/s The Commissioner of Income Tax (Exemption), Pune ....... प्रत्यर्थी / Respondent Appearances Assessee by : Mr Nikhil Mutha [‘Ld. AR’] Revenue by : Mr Ajaykumar Kesari [‘Ld. DR’] Date of conclusive Hearing : 30/09/2024 Date of Pronouncement : 01/10/2024 ORDER PER G. D.PADMAHSHALI, AM; By present twin appeals, the assessee impugns separate orders of rejection passed u/s 12A(1)(ac)(vi) and u/s 80G(5) of the Income Tax Act [in short ‘the Act’] vide DIN & Order No. ITBA/EXM/F/EXM45/2023- 24/1058667886(1) 1058696637(1) both dt. 12/12/2023 passed by the Commissioner of Income Tax-Exemption, Pune [in short ‘CIT(E)’] 2. Since facts & solitary issue involved in these appeals are identical, common & interrelated, on the rival parties’ request, for the sake of brevity these are heard together for a common and consolidated order. Parner Vipassana Samiti Vs CIT(E) ITA No. 1379 & 1380/PUN/2024 ITAT-Pune Page 2 of 9 3. Admittedly these twin appeals are instituted with a delay of 130 days. We have considered the reasoning in the light of corroborative documents, letters & submission etc., and found them falling within the parameters set for condonation by various judicial precedents including ‘Vijay Vishin Meghani Vs. DCIT & Anr’ reported 398 ITR 250 (Bom) and ‘Collector, Land Acquisition, Anantnag and Anr. Vs Ms Katiji and Others’ reported at 167 ITR 5 (SC). Such reasons since being accidental and undeliberate on the part of appellant, are in our considered view very much capable of forming ‘sufficient cause or reasons’ in instituting the present twin appeals belatedly, therefore said delay condoned and advanced accordingly. 4. Without touching merits, we have heard rival parties; and subject to rule 18 of ITAT Rules, 1963 perused material placed on record. ITA No. 1380/PUN/2024 5. We note that, the appellant vide Form No. 10AB dt. 22/08/2023 filed an application to the respondent under clause (iii) of section 12A(1)(ac) of the Act seeking thereby regular/final registration u/s 12AB of the Act. On the appellant’s effective failure to annexe required documents as contemplated u/r 17A(2)(k) of IT-Rules, the Ld. CIT(E) by notice dt. 25/10/2023 accorded an opportunity to make good the deficiency. In the event of failure vide further notice dt. 18/11/2023 one more opportunity was granted to cure the defects & remove the discrepancies notified. It was also informed by the registering authority that in the event of failure on the Parner Vipassana Samiti Vs CIT(E) ITA No. 1379 & 1380/PUN/2024 ITAT-Pune Page 3 of 9 part of assessee to comply with the notices and resolve the discrepancies the application would be rejected and provisional registration granted to it on earlier occasion would be cancelled. In absence of compliance from the appellant assessee, the Ld. CIT(E) was constrained to reject to grant regular registration and cancel the provisional registration granted to appellant on 27/05/2021 u/s 12AB r.w.s. 12A(1)(ac)(vi) of the Act as he could not draw any satisfactory conclusion about genuineness of activities of the appellant and satisfaction over compliance of requirements of any other law for the time being in force as are material for the purpose of achieving objective. 6. We note that, the statue empowers the registering authority to call any such documents or information so as to satisfy himself with twin prescriptions of section 12AB(1)(b)(i) of the Act viz; (A) genuineness of activities (B) Compliance with all applicable laws etc., and in order to draw conclusion over satisfaction the registering authority is duty bond to carry out wholesome & autonomous exercise according to nature/character of charitable purpose vis-a-vis the applicant engaged into. In arriving to conclusion over satisfaction about the genuineness of activities and compliance of applicable law, the registration proceedings is expected to vouch predominantly; (i) whether applicant is a public charitable trust established in accordance with applicable law & in operation as such [Constitution/Establishment] (iii) whether all the entries of object clause are in consonance with the ‘charitable purpose’ as defined by section 2(15) Parner Vipassana Samiti Vs CIT(E) ITA No. 1379 & 1380/PUN/2024 ITAT-Pune Page 4 of 9 of the Act [Objects] (iv) whether there exist any implied or express provision in the constitutional & other administrative documents/policies etc., entitling any right or power to the trust/trustee carry to engage (by itself or through agent/appointees) into any activities outside the ambit of registered objects [Rights/Power] (vi) whether all the activities and operation are strictly carried out in line with the registered objects of ‘charitable in nature’ [Activity] and finally (vii) whether it is compliant of all the applicable law in all respect and around the clock[Compliance]. Any proceedings culminated without vouching these former key factual (Corac) would prima-facie be deficient as it may lead to absurd conclusion. 7. In the instant case we find that, owning to absence of evidential documents and failure on the part of appellant to cure all the notified deficiencies it constrained the Ld. CIT(E) to culminate the impugned registration proceedings without former wholesome & autonomous exercise. We also note that, vide notice 18/11/2024 the appellant was accorded only ten days to cure the defects & explain the discrepancies. The notice requiring appellant to comply allowing less than a reasonable period of fifteen days in our considered view suggest denial of real opportunity, hence violative of principle of natural justice. While holding so we place on reliance on ‘Smt. Ritu Devi v. CIT’ [2004, 141 Taxman 559 (Mad.)] wherein their Hon’ble lordships have held that, time of just few days was given to Parner Vipassana Samiti Vs CIT(E) ITA No. 1379 & 1380/PUN/2024 ITAT-Pune Page 5 of 9 the assessee to furnish reply which was also held as denial of real opportunity as it was just a paper opportunity. 8. On the other hand, the reasons behind non-compliance as explained in our considered view are sufficient for setting aside the rejection which the Ld. DR could hardly object. In view hereof, without commenting on merits we set-aside the impugned rejection and cancellation of provisional registration, and consequently remit the matter back to the file of Ld. CIT(E) at the stage of issuance of notice dt. 18/11/2023 for de-novo consideration in accordance with law in three effective hearing opportunities to the appellant assessee. ITA No. 1379/PUN/2024 9. The long and short of the case is that; the appellant’s application for provisional registration u/s 80G(5)(iv) of the Act was accepted by the respondent Revenue and certificate to that effect vide order dt. 15/11/2021 was issued. In compliance of terms of condition of provisional registration and applicable provisions of the Act, the assessees vide its application From No. 10AB CIT EXEMPTION, PUNE/2023-24/12AA/12237 dt. 22/08/2023 applied for regular/final 80G approval/registration, this application however by the impugned order is rejected by the Ld. CIT(E) in limine on the ground that the application is barred by limitation. In view of the Ld. CIT(E), since the appellant had already commenced its activities on dt. 30/03/2021 i.e. much before the issue of provisional registration hence was Parner Vipassana Samiti Vs CIT(E) ITA No. 1379 & 1380/PUN/2024 ITAT-Pune Page 6 of 9 under obligation to file an application seeking regular 80G registration within a period of six months therefrom provisional registration granted to it i.e. 15/11/2021. It is further the case of the Revenue that, delayed application filed was even beyond the extended time allowed by CBDT Circular 08/2022 dt. 30/09/2022. Thus said application of the appellant was barred by limitation and in absence of statutory provision empowering condonation of delay the application deserved rejection in the light of decision of Hon’ble Madras High Court in ‘All Angels Educational Society Vs CCIT’ [2016, WP/4969/2014] and the judgments of Hon'ble Supreme Court in the case of State of ‘UP Vs Harish Chandra’ [AIR 1996 SC 2173]; further ‘UOI Vs Kirloskar Pneumatic Co. Ltd.’ [1996, 84 ELT 401 (SC)] 10. Aggrieved assessee brought up the present appeal before Tribunal on three argumentative legal grounds which we found are inconsonance with rule 8 of ITAT Rules, 1963. These however call for adjudication on the grounds of limitation and violation of principle of natural justice & merits. 11. We have given our thoughtful consideration and perused the material available on record. It remained undisputed that, the appellant commenced its activities before the date it was granted a provisional registration u/s 80G(5)(iv) of the Act on 15/11/2021, and therefore was under obligation to file form 10AB for regular/final registration before the expiry of six months in terms of clause (iii) of first proviso to s/s (5) of section 80G of the Act. The appellant’s application dt. 22/08/2023 for grant of regular registration Parner Vipassana Samiti Vs CIT(E) ITA No. 1379 & 1380/PUN/2024 ITAT-Pune Page 7 of 9 was however admittedly filed after the expiry of former stipulate period. As a result, the application was rejected by the Revenue in limine on threefold grounds viz; (i) the application is barred by limitation, (ii) the appellant was not entitled to the extended time period in terms of circular 08/2023 dt. 24/05/2023 and (iii) in absence of explicit provision/power to condone the delay in filing application for regular/final registration. There is no dispute over (i) and (iii) reasoning of founded by the Ld. CIT(E), the solitarily question therefore remains over applicability of circular 08/2023 in cases where provisional approval u/c (iv) of first proviso to s/s (5) of section 80G of the Act is granted. 12. Without reproducing lock stock and barrel of section 80G of the Act, it shall be purposive to state in the context of time limit that, there is no provision in the statute empowering condonation of delay in filing forms like 10A/10AB etc. by the registering authority. However, the CBDT invoking its power u/s 119 of the Act in first place extended the time limit within which the application for regular registration is to be filed to 30th September, 2022 by circular No. 8/2022 dt. 31/03/2022. Further on the representation from stakeholders/industry that various trust/intuitions etc., were not been able to file applicable forms 10A/10AB etc., within the due date prescribed owning to system glitches, the Board for removing this genuine hardship vide circular 06/2023 dt. 24/05/2023 extended the time limit further upto 30/09/2023 in all cases where the due date for making Parner Vipassana Samiti Vs CIT(E) ITA No. 1379 & 1380/PUN/2024 ITAT-Pune Page 8 of 9 application has expired prior to such date. The para 5(i) r.w. para 1(c) of the former circular (supra) makes it very clear that the circular besides covering cases of 10(23) and 12A registration also covers the cases falling u/c (i) of the first proviso to s/s (5) of the 80G of the Act. The clause (i) in turn refers to institutions or funds approved u/c (vi) by Ld. PCIT/CIT in relation to donation made after 31/03/1992. That is to say the assessee who is granted provisional registration by an order u/c (vi) of 80G(5) would then be entitled to extended time by virtue of 5(i) r.w. para 1(c) of circular (supra) and not otherwise. 13. In the present case before us, reading from para 4 of impugned order it as an undisputed fact that the appellant assessee was granted a provisional registration u/c (iv) of s/s (5) of section 80G of the Act by an order u/c (vi) of s/s (5) of section 80G of the Act by the Ld. CIT(E). Therefore, there remains no reason to draw out appellant’s case from claiming benefit of extended period for filing application for regular registration. Further the circular (supra) also clarified that the extended period upto 30/09/2023 shall apply even in cases, (i) where the application was rejected by the CIT(E) on or before issuance of this circular dt 24/05/2023 (ii) where due date for making/filing application has expired, on or before 30/09/2023. In addition to above, in reply to a specific query, the appellant spelt out the reasons beyond delayed filing of application, which in our considered view also formed sufficient & reasonable ground to Parner Vipassana Samiti Vs CIT(E) ITA No. 1379 & 1380/PUN/2024 ITAT-Pune Page 9 of 9 condone the delay. We find in similar facts & circumstance, the co-ordinate benches allowed benefit of extended time period in; ‘Rotary Club of Akurdi Charitable Trust’ [ITA 1025/PUN/2024] ‘Shashvat Paediatric Care Foundation’, [ITA 1217/PUN/2023] ‘Sarathi Youth Foundation’ [ITA/PUN/2024] ‘Birmani Charitable Foundation’ [162 Taxmann.com 154] ‘Swachh Vapi Mission Trust Vs CIT(E)’ [2024, 70 CCH 188] ‘TB Lulla Charitable Foundation Vs CIT(E)’ [2024, 70 CCH 176], and ‘Gujarat Hira Bourse & Ors’ [2024, 70 CCH 33],‘Bhamashah Sundarlal Daga Charitable Trust’ [2024, 226 TTJ 961]. 14. Maintaining parity with former decisions, we hold the application of the appellant was filed well within the extended time limit and in consequence we set-aside the impugned order of rejection for remand with a direction to treat appellant’s application dt. 22/08/2023 as filed within the time limit prescribed u/c (iii) to first proviso to section 80G(5) of the Act r.w.c. 06/2023 (supra) and adjudicate the same on merits in accordance with law. 15. These twin appeals in result are ALLOWED FOR STATISTCIAL PURPOSES. U/r 34 of ITAT Rules, order pronounced in open court on this Tuesday, 01st day of October, 2024. -S/d- -S/d- ASTHA CHANDRA G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / PUNE; दिन ांक / Dated : 01st day of October, 2024. आदेशकीप्रतितितिअग्रेतिि / Copy of the Order forwarded to : 1.अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr.CIT(Exemption),Pune 4. The CIT-Concerned(MH-India) 5. DR, ITAT, Bench ‘B’, Pune 6.ग र्डफ़ इल / Guard File. आिेश नुस र / By Order वररष्ठदनजीसदिव / Sr. Private Secretary आयकरअपीलीयन्य य दिकरण, पुणे / ITAT, Pune. "