SHREE RIKHAVDEVJI & KUNTHUNATHJI PRABHU JAIN SWETAMBER MURTIPUJAK PADHI,SABARKANTHA V. THE CIT(EXEMPTION), AHMEDABAD

ITA 2132/AHD/2024

AI Insights

The case involves Shree Rikhavdevji & Kunthunathji Prabhu Jain Swetamber Murtipujak Padhi, a trust, appealing against the decision of the Commissioner of Income Tax (Exemption), Ahmedabad, which rejected their application for registration under Section 12AB of the Income Tax Act, 1961, and cancelled their provisional registration. The Tribunal noted procedural deficiencies in the CIT(E)'s decision-making process, particularly the lack of consideration of the trust's activities and objectives, and the failure to provide an opportunity to rectify the deficiencies before rejecting the application.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472254 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A. P. SINGH
• Assessee Lawyers: TEJ SHAH
• Keywords: Condonation of delay; Set aside; Principle of natural justice
• Section: 20

Judgement Text

" आयकर अपीलीय अिधकरण, अहमदाबाद \u0011ायपीठ “सी“,अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD \u0015ी संजय गग\u001a, \u0011ाियक सद\u001b एवं \u0015ी मकरंद वसंत महादेवकर, लेखा सद\u001b क े सम!। ] ] BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER आयकर अपील सं /ITA No.2132/Ahd/2024 िनधा \u000fरण वष\u000f /Assessment Year : - NA Shree Rikhavdevji & Kunthunathji Prabhu Jain Swetamber Murtipujak Padhi Ilol, A P ilol, Himatnagar – 383 001 Sabarkantha (Gujarat) बनाम/ v/s. The CIT (Exemption) Ahmedabad – 380 015 \u0013थायी लेखा सं./PAN: AAJTS 7172 E (अपीलाथ$/ Appellant) (%& यथ$/ Respondent) Assessee by : Shri Tej Shah, AR Revenue by : Shri A.P. Singh, CIT-DR सुनवाई की तारीख/Date of Hearing : 19 /03/2025 घोषणा की तारीख /Date of Pronouncement: 20 /03/2025 आदेश/O R D E R PER MAKARAND V. MAHADEOKAR, AM: This appeal has been filed by the assessee against the order of the Commissioner of Income Tax (Exemption), Ahmedabad [hereinafter referred to as “CIT(E)”], rejecting the application for registration under Section 12AB of the Income Tax Act, 1961 [hereinafter referred to as “the Act”], and cancelling the provisional registration granted earlier. 2. The appeal was filed with a delay of 49 days. The assessee has submitted an application for condonation of delay along with an affidavit ITA No.2132/Ahd/2024 Shree Rikhavdevji & Kunthunathji Prabhu Jain Swetamber Murtipujak Padhi vs. CIT(E) 2 explaining the reasons for the delay. It has been stated that the impugned order was received via e-mail on 29/08/2024, but due to inadvertence, the same was not noticed immediately as the accountant was not checking the email regularly. The order came to the notice of the assessee only on 12/11/2024, after which necessary legal advice was obtained, and the appeal was filed on 19/12/2024. 2.1. Considering the facts and circumstances of the case, and in view of the settled principles that courts should take a liberal approach in condoning delays in filing appeals, if the delay is not intentional or malafide, we find that the reasons for the delay are bonafide. Accordingly, the delay of 49 days in filing the appeal is condoned. 3. The assessee filed an application in Form 10AB for registration under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961. The assessee was earlier granted provisional registration in Form 10AC on 24/09/2021, effective for Assessment Year (AY) 2022-23 to AY 2024-25. 3.1. The CIT(E) issued notices on 06/05/2024 and 29/06/2024, calling for certain details/documents. The assessee partially responded on 05/07/2024, after which a further notice was issued on 02/08/2024, directing the assessee to furnish the remaining details by 08/08/2024. However, no further response was submitted by the assessee. ITA No.2132/Ahd/2024 Shree Rikhavdevji & Kunthunathji Prabhu Jain Swetamber Murtipujak Padhi vs. CIT(E) 3 3.2. Based on the non-compliance with the notices, the CIT(E) proceeded to reject the application for registration and also cancelled the earlier provisional registration granted to the assessee. 3.3. Therefore, the assessee filed the present appeal before us raising following grounds of appeal: 1. The Ld. CIT erred in law and in the facts of the case in rejecting the application for registration u/s 10AD of the Act. 2. The Ld. CIT erred in law and in the facts of the case in rejecting the provisional registration which was granted earlier. 4. The Authorized Representative (AR) of the assessee narrated the facts and circumstances and requested to restore the matter back to the file of CIT(E) as one more opportunity to present the case. The Departmental Representative (DR) raised no objection for the same. 5. We have considered the submissions of the assessee and the reasons recorded by the CIT(E) in the impugned order. We find that the rejection of the application and cancellation of the provisional registration was primarily based on the non-furnishing of certain documents and details. However, there is no finding by the CIT(E) on the genuineness of the activities of the trust on the basis of documents before him. The CIT(E) is expected to apply his mind to the objects and activities of the trust rather than merely rejecting registration based on procedural deficiencies. In the present case, it appears that the CIT(E) has rejected the application without examining whether the activities of the trust are genuine and in line with its objectives. The CIT(E) has also not provided any opportunity to rectify the deficiencies before rejecting the application. The principle of natural justice demands that an ITA No.2132/Ahd/2024 Shree Rikhavdevji & Kunthunathji Prabhu Jain Swetamber Murtipujak Padhi vs. CIT(E) 4 assessee should be given a fair opportunity to comply with the requirements before an adverse order is passed. 5.1. Considering these facts, we are of the view that the rejection of the application and cancellation of the provisional registration requires reconsideration. Accordingly, we set aside the impugned order of the CIT(E) and restore the matter to his file for fresh adjudication after affording due opportunity to the assessee. The assessee is directed to co-operate in the proceedings and furnish all requisite details as may be required by the CIT(E) for deciding the matter on merits. 5.2. Therefore, the impugned order of CIT(E) is set aside. The matter is restored to the file of CIT(E) for fresh adjudication in accordance with law. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 20th March, 2025 at Ahmedabad. Sd/- Sd/- ( SANJAY GARG ) JUDICIAL MEMBER ( MAKARAND V. MAHADEOKAR ) ACCOUNTANT MEMBER अहमदाबाद/Ahmedabad, िदनांक/Dated 20 /03/2025 टी.सी.नायर, व.िन.स./T.C. NAIR, Sr. PS ITA No.2132/Ahd/2024 Shree Rikhavdevji & Kunthunathji Prabhu Jain Swetamber Murtipujak Padhi vs. CIT(E) 5 आदेश की \"ितिलिप अ#ेिषत/Copy of the Order forwarded to : 1. अपीलाथ$ / The Appellant 2. \"%थ$ / The Respondent. 3. संबंिधत आयकर आयु& / Concerned CIT 4. आयकर आयु& ) अपील ( / The CIT(E)-Ahmedabad 5. िवभागीय \"ितिनिध , अिधकरण अपीलीय आयकर , राजोकट/DR,ITAT, Ahmedabad, 6. गाड\u000f फाईल / Guard file. आदेशानुसार/ BY ORDER, स%ािपत \"ित //True Copy// सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण, ITAT, Ahmedabad 1. Date of dictation (word processed by Hon’ble AM in his laptop) : 19.3.2025 2. Date on which the typed draft is placed before the Dictating Member. : 19.3.2025 3. Date on which the approved draft comes to the Sr.P.S./P.S : 4. Date on which the fair order is placed before the Dictating Member for pronouncement. : 5. Date on which fair order placed before Other Member : 6. Date on which the fair order comes back to the Sr.P.S./P.S. : 20.3.2025 7. Date on which the file goes to the Bench Clerk. : 20.3.2025 8. Date on which the file goes to the Head Clerk. : 9. The date on which the file goes to the Assistant Registrar for signature on the order. : 10. Date of Despatch of the Order : "