SHREE VARAD VINAYAK HOSPITAL AND HEALTHCARE FOUNDATION,PUNE V. CIT EXEMPTION, PUNE

ITA 4/PUN/2025

AI Insights

The case involves Shree Varad Vinayak Hospital & Health Care Foundation appealing against the decision of the CIT Exemption, Pune, which had rejected their application for registration under Section 12A of the Income Tax Act, 1961. The rejection was initially based on procedural grounds, citing a lack of sufficient time for the assessee to respond to the notice. The Tribunal found that the assessee was not given a reasonable opportunity to present their case, as the notice was issued on 07.03.2024 and the order was passed on 11.03.2024, within just four days. The Tribunal noted the principles of natural justice and the procedural requirements set by the CBDT, emphasizing the need for a minimum of 15 days for compliance.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 298635 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Other Referred Cases: Dauphin Travel Marketing Private Limited vs. ITO
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY KUMAR
• Assessee Lawyers: ABHAY SHASTRI
• Keywords: Condonation of delay; Set aside; Reasonable cause; Principle of natural justice; Charitable institution
• Section: 12AA; 12A

Judgement Text

"आयकर अपीलीय अधिकरण \"बी\" न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL \"B\" BENCH, PUNE BEFORE Dr. MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No. 4/PUN/2025 धििाारण वषा / Assessment Year: NA Shree Varad Vinayak Hospital & Health Care Foundation, C/O Popat B Bhandwalkar, Dapodi, Daund, Pune-412203 Maharashtra PAN-ABDCS4704L Vs CIT Exemption, Pune Appellant Respondent Assessee by : Shri Abhay Shastri Revenue by : Shri Ajay Kumar Keshari- CIT Date of hearing : 08.04.2025 Date of pronouncement : 22.04.2025 आदेश/ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : This appeal at the instance of the assessee is directed against the order of Ld. CIT Exemption u/s 12AA of the Income- tax Act, 1961 dated 11.03.2024. 2. Registry has informed that the instant appeal is time barred by 216 days. Affidavit alongwith application for condonation of delay has been filed. Ld. DR opposed the condonation stating that no plausible reason has been stated. We after hearing both the sides observe that the delay was on account of lack of familiarity of assessee with technical and E 2 ITA No. 4/PUN/2025 proceedings, medical issue faced by the Managing Trustee and time taken for searching of the counsel for filing of the appeal. We therefore condone the delay finding it to be for a reasonable cause and admit the appeal for adjudication. 3. Assessee has raised following grounds of appeal:- 1. The Learned CIT(E) erred in rejecting the application under Section 12AA solely on limitation grounds, disregarding the merits of the case. 2. The Learned CIT(E) failed to provide adequate opportunity for the appellant to present evidence demonstrating the genuineness of charitable activities and compliance with Section 12A provisions violating the principles of natural justice. 3. The Learned CIT(E) disregarded the welfare-oriented intent of the Income Tax Act, 1961, and the purpose of Section 12A, which is to promote charitable activities benefiting society. 4. The Learned CIT(E)'s decision conflicts with the Directive Principles of State Policy within the Constitution of India. These principles highlight the legislative intent to support charitable trusts for the public good. 5. The Learned CIT(E) issued notice on 29.02.2024 requesting the appellant to file explanation to the above notice, on or before 07.03.2024. Undisputedly, the time given to the appellant for compliance is less than a week, which is against the Standard Operative Procedure ('SOP') issued by the CBDT dated 19.11.2020, wherein, minimum period of 15 days is required to be given to the assessee to comply with notices from the date of issue of the notice. Recently, the Hon'ble Delhi High Court in the case of Dauphin Travel Marketing Private Limited vs. ITO in W.P.(C) 8870/2023 & CM Nos.33516-17/2023 dated 05.07.2023 taking note of this SOP held that the grant of insufficient time to respond the notice violates the principles of natural justice and, therefore, set aside the assessment. Thus, it is clear that the appellant was given unreasonably very short period of time to respond to the notice, which is against the principles of natural justice. 6. The above grounds of appeal may kindly be allowed to be amended, altered, modified etc in the interest of natural justice. 4. Assessee has raised grounds of appeal challenging the impugned order through which Ld. CIT(E) has rejected the application filed by the assessee for registration u/s 12A of the Act. 5. At the outset Ld. counsel for the assessee submitted that little time of only 7 days was given to make compliance to the notice requiring many details called for by CIT(E). Prayer made 3 ITA No. 4/PUN/2025 to provide one more opportunity to go before Ld. CIT(E) for doing the needful on merits of the case. 6. Per contra Ld. DR supported the impugned order. 7. We have heard rival contentions and perused the record placed before us. Assessee is aggrieved with the finding of the Ld. CIT(E) rejecting the application for permanent registration and also cancelling the application for provisional registration. We have gone through the impugned order and find that notice dated 07.03.2024 was served through E-Portal but in the meantime when the assessee could furnish the details, the impugned order was passed on 11.03.2024 i.e. within 4 days of the issue of notice dated 07.03.2024. In these circumstances we find that assessee has been deprived of proper and reasonable opportunity of hearing and therefore in the interest of justice and being fair to both the parties, we reversed the impugned order and set aside the issue to the file of Ld. CIT(E) for afresh adjudication and to decide in accordance with law after duly providing fair opportunity of hearing to the assessee. Assessee is also directed to remain vigilant and not to take unnecessary adjournment. Effective Grounds of appeal raised by the assessee are allowed for statistical purposes. 8. In the result appeal of the assessee is allowed for statistical purposes. Order pronounced on this 22nd day of April, 2025. Sd/- Sd/- (VINAY BHAMORE) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER 4 ITA No. 4/PUN/2025 पुणे / Pune; दििांक / Dated: 22nd April, 2025. Neeta आिेश की प्रधिधलधप अग्रेधषि / Copy of the Order forwarded to: 1. अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. धवभागीय प्रधिधिधि, आयकर अपीलीय अधिकरण, \"बी\" बेंच, पुणे / DR, ITAT, \"B\" Bench, Pune. 5. गार्ा फाइल / Guard File. आिेशािुसार / BY ORDER, वररष्ठ धिजी सधचव / Sr. Private Secretary आयकर अपीलीय अधिकरण, पुणे / ITAT, Pune "