PRATIMA CHARITABLE FOUNDATION,PUNE V. CIT (EXEMPTION), PUNE

ITA 1384/PUN/2025

AI Insights

The case involves the Pratima Charitable Foundation, which appealed against the rejection of its applications for regular registration under section 12AA and approval under section 80G(5) of the Income Tax Act by the CIT(Exemption). The Tribunal found that the CIT(Exemption) had not provided a reasonable opportunity for the appellant to respond to the discrepancies noted in the application, which constituted a violation of the principles of natural justice. The Tribunal noted that the orders were non-speaking and mechanical, lacking specific findings or material analysis to substantiate the rejection. Consequently, the Tribunal set aside the CIT(Exemption)'s orders and remitted the matter for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714211 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2023-2024
• Other Referred Cases: MS Poonam Industries Vs CIT, Collector, Land Acquisition, Anantnag & Anr. Vs Master Katiji & Others, Inder Singh Vs. State of Madhya Pradesh
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT BOBDE
• Assessee Lawyers: BHEEK SINGH RAJPUROHIT
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Reasonable cause; Bonafide belief; Principle of natural justice
• Section: 12AA

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “B”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA Nos.1383 and 1384/PUN/2025 Pratima Charitable Foundation, FL-101, Runwal Sakshi, PL-20, Sr.No.260/2/13, Baner, Pune 411 045 Maharashtra PAN : AANCP1134C Vs. Commissioner of Income-tax (Exemption), Pune Appellant Respondent आदेश / ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The captioned appeals at the instance of appellant are against the rejection of applications for regular registration u/s.12AB(1)(ac)(ii) and approval u/s.80G of the Act respectively framed by ld.CIT(E) dated 21.10.2024. 2. Registry has informed that there is delay of about five months in preferring the instant appeals before this Tribunal. Assessee has filed affidavits along with applications for condonation of delay explaining the reasons which led to delay and the averments read as follows : “The Appellant respectfully submits that the hon'ble CIT(Exemption) passed the impugned order on 21/10/2024 which was uploaded on appellant income-tax portal on the very same day, therefore, the statutory period for filing appeal before hon'ble ITAT expired on 20.12.2024. Unfortunately, the order dated 21.10.2024 was come to knowledge by the directors of appellant Pratima Charitable Appellant by : Shri Bheek Singh Rajpurohit Respondent by : Shri Amit Bobde Date of hearing : 30.07.2025 Date of pronouncement : 05.08.2025 Printed from counselvise.com ITA Nos.1383 and 1384/PUN/2025 Pratima Charitable Foundation 2 Foundation in true sense on 14.04.2025, accordingly, the appeal filed by the appellant is within time. 2. As it is primary responsibility of the appellant to view its portal periodically and respond timely yet the same was not fulfilled by the appellant because the consultant was assigned for this purpose and the appellant was on bonafide belief that the consultant is doing this job. The application for regular registration was filed by the consultant on 06.05.2024 and reply to first notice issued by the CIT(Exemption) on 15.06.2024 and time was provided to file reply by 01.07.2024 but the reply was submitted well before stipulated time i.e. on 25.06.2024. Till 25.06.2024, the appellant was in touch with the consultant and provided him required details, subsequently, the appellant missed its focus on the outcome and subsequent development in the matter with a belief that registration will be given the Ld. CIT(Exemption). The consultant was busy in his work and also failed to follow up it which resulted into non- compliance of second notice dated 7.10.2024. 3. As the financial year was over, the consultant was approached to know the update of regular registration u/s 12A/12AA of the I.T. Act and come to know that the application for regular registration was already rejected on 21.10.2024 and the copy of rejection order was received from our consultant on 14.04.2025. We became uncomfortable from the approach of the consultant and decided to change our the then consultant. After meeting with some consultants, we approached new consultant who advised us to file appeal before hon'ble ITAT, Pune Immediately with request to condone delay in filing appeal by mentioning correct facts of delay. This is the reason for delay in filing of appeal. 4. It is respectfully submitted that the delay in filing appeal was neither intentional nor deliberate but was due to facts discussed above only. Actually, the appellant has to explain delay of each day and to show that the appellant was prevented by sufficient cause in filing appeal. However, Punjab & Haryana High Court held in the case of MS Poonam Industries Vs CIT (178 Taxmann 319) that the discretion to condone delay in filing appeal should be decided judiciously and in pragmatic manner to advance the substantial cause of justice. The same ratio was also laid down by hon'ble Supreme Court in the case of Collector, Land Acquisition, Anantnag & Anr. Vs Master Katiji & Others (1987) (167 ITR 471). 5. Further, the appellant has a strong prima facie case of merits and if the delay is not condoned, the appellant will suffer irreparable loss and injury. On the other hand, no prejudice would be cause to the respondent if the delay is condoned and the matter is heard on merits. Hon'ble ITAT has the inherent power to condone the delay in filing appeal in the interest of natural justice. 6. In view of the above, the appellant humbly prays that this hon'ble tribunal may kindly be pleased to condone the delay of 158 Printed from counselvise.com ITA Nos.1383 and 1384/PUN/2025 Pratima Charitable Foundation 3 days in filing the present appeal and allow the same to be heard on merits in the interest of justice and equity.” 3. After hearing both the sides and going through the averments made in the condonation applications by the assessee, we find that due to ‘reasonable cause’ assessee failed to file the appeals within the stipulated time limit. We therefore condone the delay of five months in filing the appeals and admit the appeals for adjudication in light of judgments of Hon’ble Supreme Court in the case of Collector, Land Acquisition, Anantnag & Anr. Vs. Mst. Katiji & Ors. reported in (1987) 2 SCC 107 and in the case of Inder Singh Vs. State of Madhya Pradesh judgment dated 21.03.2025 (2025 INSC 382). 4. At the outset, ld. Counsel for the assessee submitted that appellant failed to respond to the second notice given by ld.CIT(E) for the reasons beyond its control. The time given to respond is very short and therefore a prayer is made to remit back the issue on merits to the file of ld.CIT(E) for adjudication of the appeals relating to applications for regular registration u/s.12AA and approval u/s.80G(5) of the Act. 5. Ld. Departmental Representative on the other hand supported the order of ld.CIT(E). 6. We shall first take up the appeal ITA No.1383/PUN/20245 filed by the appellant wherein it has assailed the impugned order on the following grounds of appeal: “On the facts and circumstances of the case and in law - Ground 1: The CIT (Exemptions) failed to provide the appellant with an adequate and reasonable opportunity to respond to the issues Printed from counselvise.com ITA Nos.1383 and 1384/PUN/2025 Pratima Charitable Foundation 4 raised in the proceedings. The appellant was not given sufficient time to address the points raised, thereby denying the right to a fair hearing. Ground 2: The Ld. CIT(Exemption) has erred in rejecting application for registration u/s 12AA of the I.T. Act by passing order dated 21/10/2024 only on the ground of reply was not submitted to second notice which was issued on 7/10/2024, without giving further reasonable time, thereby, violated principle of natural justice. Ground 3: The Ld. CIT(Exemption) did not properly appreciate the objectives and activities of the appellant, which qualify for exemption under section 12A/12AA of the I. T. Act. Ground 4: The CIT (Exemptions) failed to consider that the appellant has been carrying out genuine charitable activities as defined under the Income Tax Act, 1961, and is entitled to registration under section 12AA of the I. T. Act. Ground 5: The CIT (Exemptions) has failed to appreciate the submission and documentation provided by the appellant during the proceedings, and there has been a failure of natural justice in not considering the same adequately. Ground 6: The Appellant craves leave to add, to alter, amend, or delete all or any of the aforesaid grounds of appeal on or before or at the time of hearing.” 7. Succinctly stated, the appellant is a charitable foundation incorporated under the Companies Act, 2013. Its object is to provide aid to persons and animals affected by natural calamities, Education and training, Women and Child Welfare, Sports and Recreation, Public Welfare Facilities and Preservation of Heritage etc. It has been granted provisional registration on 30.09.2022 till A.Y. 2025-26. Subsequently, the appellant foundation applied for permanent registration by way of Form No. 10AB u/s.12A(1)(ac)(iii) of the Act on 06.05.2024. In order to verify the genuineness of activities of the appellant, the ld.CIT (Exemption) issued notice through Printed from counselvise.com ITA Nos.1383 and 1384/PUN/2025 Pratima Charitable Foundation 5 ITBA portal on 15.06.2024 requiring the appellant to upload certain information. In compliance, the appellant trust furnished the requisite details as called for. Thereafter, ld.CIT(E) issued another notice dated 07.10.2024 communicating the discrepancies in the details so filed and there was no response from the appellant’s side. Eventually, ld. CIT (Exemption) vide the impugned order dated 21.10.2024 rejected the application filed by the appellant for registration of the trust u/s. 12AA of the Act observing that the appellant has not furnished any explanation to the discrepancies communicated to it, it is presumed that the appellant has nothing to say in the matter, thereby cancelled the provisional registration granted to the appellant on 30.09.2022. Now the appellant is in appeal before this Tribunal. 8. We have heard the rival contentions and perused the record placed before us. On careful circumspection of the facts and the impugned order, we find that ld.CIT(Exemption) has not brought on record any finding or material analysis to substantiate how and in what manner the activities of the appellant foundation were not in accordance with the stated objectives nor has articulated which information was missing, despite the appellant furnishing a detailed reply along with supporting documents. Before us, it is claimed by the appellant that the time provided by the ld.CIT(E) for responding to the second notice was very short considering the details called for. Therefore, reasonable opportunity of hearing was not granted to the appellant. A prayer is made to set aside the impugned order by remitting the issue on merits to the file of ld.CIT(E) for adjudicating on merits of the case. In light of these observations, we are of a firm conviction that the Printed from counselvise.com ITA Nos.1383 and 1384/PUN/2025 Pratima Charitable Foundation 6 rejection by the Ld.CIT(Exemption) of the application filed by the appellant foundation for permanent registration without providing reasonable opportunity and passing a reasoned order violates the principles of natural justice. It will be apposite to observe that non-speaking, cryptic, and mechanical orders passed by quasi-judicial authorities are not sustainable in law. The Ld.CIT(Exemption) while disposing off the application filed by the appellant foundation u/s.12AA of the Act was expected to pass a reasoned order and specific findings after considering the material on record. 9. In view of the above, the impugned order dated 21.10.2024 is hereby set aside, and the matter is restored to the file of the Ld.CIT(Exemption) with a direction to pass a fresh speaking and reasoned order in accordance with law. Needless to mention that the appellant foundation in the course of the set aside proceedings shall be afforded a reasonable opportunity of being heard. Appellant is at liberty to adduce all the required supporting documents/evidence substantiating the charitable activities. 10. In the result, the appeal filed by the appellant trust in ITA No.1383/PUN/2025 is allowed for statistical purposes in terms of our aforesaid observations. ITA No.1384/PUN/2025 11. We shall now deal with the appeal filed by the appellant trust, wherein it has assailed the rejection of application for granting approval u/s.80G(5) of the Act by the CIT(Exemption). Printed from counselvise.com ITA Nos.1383 and 1384/PUN/2025 Pratima Charitable Foundation 7 12. Succinctly stated, the appellant trust was granted provisional registration u/s.80G of the Act vide order dated 30.09.2022. Subsequently, the appellant trust applied for permanent registration and the same was rejected by the ld.CIT(Exemption) vide order dated 21.10.2024. Appellant filed application for approval u/s.80G(5) of the Act which was declined by ld.CIT(Exemption). 13. We find that the facts attending to the rejection of the application filed by the appellant trust for approval u/s.80G(5) also remain the same as were involved in its against the order of the CIT(Exemption) declining its registration u/s.12AB of the Act, therefore, our order therein passed shall apply mutatis mutandis for the present appeal too. Impugned order dated 21.10.2024 is hereby set aside and the matter is restored to the file of the CIT(Exemption) with a direction to pass a fresh speaking and reasoned order in accordance with law. Needless to mention that the appellant foundation in the course of the set aside proceedings shall be afforded a reasonable opportunity of hearing and will remain at liberty to submit any further documents or explanations as may be required. 14. In the result, both the appeals filed by the appellant are allowed for statistical purposes. Order pronounced on this 05th day of August, 2025. Sd/- Sd/- (VINAY BHAMORE) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; \u0001दनांक / Dated : 05th August, 2025. Satish Printed from counselvise.com ITA Nos.1383 and 1384/PUN/2025 Pratima Charitable Foundation 8 आदेश क\u0002 \u0003ितिलिप अ ेिषत / Copy of the Order forwarded to : 1. अपीलाथ / The Appellant. 2. \u000eयथ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, “B” ब\u0014च, पुणे / DR, ITAT, “B” Bench, Pune. 5. गाड\u0004 फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. Printed from counselvise.com "