SHRIJAL WELFARE FOUNDATION,SANTACRUZ (EAST) V. CIT (EXEMPTION) MUMBAI, CUMABALLA HILL

ITA 2825/MUM/2025

AI Insights

The case involves Shrijal Welfare Foundation appealing against the rejection of their applications for registration under Sections 12AA and 80G of the Income Tax Act, 1961, by the Commissioner of Income Tax (Exemptions), Mumbai. The appeals were initially delayed by 280 days due to various bona fide reasons including the resignation of their Chartered Accountant and the unawareness of the authorized signatory regarding the registration procedures. The Tribunal found the reasons for the delay to be sufficient and admitted the appeals for adjudication on merits. The Tribunal noted that the assessee had not complied with statutory notices due to a lack of awareness of the ITBA e-proceeding process and preoccupations with other litigations. Given the circumstances, the Tribunal decided to remand the matter back to the CIT(E) for a fresh evaluation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 398145 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2024-2025
• Other Referred Cases: Katiji AIR (1987) 167 ITR 471 (SC), India Insurance Co. Ltd. v. Smt. Nirmala Devi (1979) 118 ITR 507 (SC), Ram Nath Sao v. Gobardhan Sao, AIR 2002 SC 1201
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R.A. DHYANI
• Assessee Lawyers: SHIVALI MHATRE
• Keywords: Condonation of delay; Set aside
• Section: 12AA; 80G

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “C” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAJ KUMAR CHAUHAN (JUDICIAL MEMBER) ITA Nos. 2824 & 2825/MUM/2025 Assessment Year: 2024-25 Shrijal Welfare Foundation, B/401, Centaur House, Shanti Nagar, Vakola Pipe Line, Santacruz (East), Mumbai-400055. Vs. CIT (Exemptions), Room No. 601, 6th floor, Cumballa Hill, MTNL Building, Pedder Road, Dr. Gopalrao Deshmukh Marg, Cumnballa Hill, Mumbai-400026. PAN NO. ABGCS 2158 F Appellant Respondent Assessee by : Ms. Shivali Mhatre Revenue by : Mr. R.A. Dhyani, CIT-DR Date of Hearing : 04/06/2025 Date of pronouncement : 05/06/2025 ORDER PER OM PRAKASH KANT, AM These two appeals by the assessee are directed against two separate orders, both dated 22.05.2024, passed by the Ld. Commissioner of Income-tax (Exemptions), Mumbai [in short ‘the Ld. CIT(E)’] rejecting application of the assessee u/s 12AA and 80G of the Income-tax Act, 1961 (in short ‘the Act’). 2. At the very threshold, the learned counsel for the appellant submitted that the present appeals have been instituted with a delay of 280 days. An application for condonation of delay has been filed, accompanied by an explanation for the said delay. It was submitted that the delay occurred for multiple bona fide reasons: firstly, the resignation of the Chartered Accountant who was handling the trust’s taxation matters, for whom no immediate replacement could be secured; secondly, the authorised signatory of the trust, Ms. Anjali Shroff, was unaware of the registration procedures and, consequently, the statutory notices issued by the Commissioner of Income Tax (Exemptions) [CIT(E)] remained unaddressed; and thirdly, she was preoccupied with multiple litigations pending before other judicial for been filed as under: 1. 25.06.2021 2. 06.09.2021 3. 01.12.2021 4. 27.08.2024 5. 11.09.2024 6. 25.03.2025 2.1 In support of the application for condonation of delay, reliance has been placed by the appellant on various authoritative pronouncements of Hon’ble 3. The submissions of both parties have been heard and the materials placed on record carefully pe the delay, in our considered view, constitute ‘sufficient cause’ Shrijal Welfare Foundation ITA Nos. 2824 At the very threshold, the learned counsel for the appellant submitted that the present appeals have been instituted with a delay of 280 days. An application for condonation of delay has been filed, accompanied by an explanation for the said delay. It was submitted that the delay occurred for multiple bona fide reasons: firstly, the resignation of the Chartered Accountant who was handling the trust’s taxation matters, for whom no immediate replacement could be secured; secondly, the authorised signatory of the trust, Ms. Anjali Shroff, was unaware of the registration procedures and, consequently, the statutory notices issued by the Commissioner of Income Tax (Exemptions) [CIT(E)] remained unaddressed; and thirdly, she was preoccupied with multiple s pending before other judicial forum, the list of which has Court rejected affidavit Filed Application for stay and interim relief in Khed Court Stay was granted Khed Judge Vacated stay Government should be a party to the Suit in appeal in High Court High Court judgment, in favor of the Appellant. In support of the application for condonation of delay, reliance has been placed by the appellant on various authoritative Hon’ble Courts. The submissions of both parties have been heard and the materials placed on record carefully perused. The reasons cited for the delay, in our considered view, constitute ‘sufficient cause’ Shrijal Welfare Foundation 2 ITA Nos. 2824 & 2825/MUM/2025 At the very threshold, the learned counsel for the appellant submitted that the present appeals have been instituted with a delay of 280 days. An application for condonation of delay has been filed, accompanied by an explanation for the said delay. It was submitted that the delay occurred for multiple bona fide reasons: firstly, the resignation of the Chartered Accountant who was handling the trust’s taxation matters, for whom no immediate replacement could be secured; secondly, the authorised signatory of the trust, Ms. Anjali Shroff, was unaware of the registration procedures and, consequently, the statutory notices issued by the Commissioner of Income Tax (Exemptions) [CIT(E)] remained unaddressed; and thirdly, she was preoccupied with multiple , the list of which has Filed Application for stay and interim relief in Khed Court Government should be a party to the Suit in appeal in High Court judgment, in favor of the Appellant. In support of the application for condonation of delay, reliance has been placed by the appellant on various authoritative The submissions of both parties have been heard and the rused. The reasons cited for the delay, in our considered view, constitute ‘sufficient cause’ within the meaning of Section 5 of the Limitation Act. evaluating sufficiency of cause for condonation of delay, the Hon’ble Supreme Court in the case of Katiji AIR (1987) 167 ITR 471 (SC) principles: (i) Ordinarily, a litigant does not stand to benefit by lodging an appeal late. (ii) Refusing to condone delay can result in a meritorious matter very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. (iii) \"Every day's delay must be explai should be taken. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common (iv) When substantial justice and technical considerations are pitte cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non (v) There is no presumption that delay is occasioned culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. (vi) It must be grasped that judiciary is respected not on account of its power injustice on technical grounds but because it is capable of removing injustice and is expected to do so.\" 3.1 Further, the Hon’ble Supreme Court in the case of India Insurance Co. Ltd. v. Smt. Nirmala Devi (1979) 118 ITR 507 (SC) held that what is to be looked into is whether there is any taint of mala fide or element of recklessness or ruse and if neither is present, legal advice honestly sought and actually given, must be treated as sufficient cause for condoning the delay. Furthe Hon’ble Supreme Court in the case of Sao, AIR 2002 SC 1201 Shrijal Welfare Foundation ITA Nos. 2824 within the meaning of Section 5 of the Limitation Act. evaluating sufficiency of cause for condonation of delay, the Hon’ble Supreme Court in the case of Collector of Land Acquisition v. Katiji AIR (1987) 167 ITR 471 (SC) has laid down following six Ordinarily, a litigant does not stand to benefit by lodging an appeal late. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. \"Every day's delay must be explained\" does not mean that a pedantic approach should be taken. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common-sense pragmatic manner. When substantial justice and technical considerations are pitte cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. It must be grasped that judiciary is respected not on account of its power injustice on technical grounds but because it is capable of removing injustice and is Further, the Hon’ble Supreme Court in the case of India Insurance Co. Ltd. v. Smt. Nirmala Devi (1979) 118 ITR eld that what is to be looked into is whether there is any taint of mala fide or element of recklessness or ruse and if neither is present, legal advice honestly sought and actually given, must be treated as sufficient cause for condoning the delay. Furthe Hon’ble Supreme Court in the case of Ram Nath Sao v. Gobardhan Sao, AIR 2002 SC 1201 held that by taking a pedantic or hyper Shrijal Welfare Foundation 3 ITA Nos. 2824 & 2825/MUM/2025 within the meaning of Section 5 of the Limitation Act. For evaluating sufficiency of cause for condonation of delay, the Hon’ble lector of Land Acquisition v. has laid down following six Ordinarily, a litigant does not stand to benefit by lodging an appeal late. being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits ned\" does not mean that a pedantic approach should be taken. Why not every hour's delay, every second's delay? The doctrine When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to deliberate delay. deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is Further, the Hon’ble Supreme Court in the case of Concord of India Insurance Co. Ltd. v. Smt. Nirmala Devi (1979) 118 ITR eld that what is to be looked into is whether there is any taint of mala fide or element of recklessness or ruse and if neither is present, legal advice honestly sought and actually given, must be treated as sufficient cause for condoning the delay. Further, the Ram Nath Sao v. Gobardhan taking a pedantic or hyper- technical view, the explanation furnished by the assessee for condonation of delay should not be rejected assessee had arguable points of law on merits and refusal condonation of delay will cause erroneous loss and irreparable injury to the aggrieved party by terminating 3.2 The object of prescribing the time perio is to expedite the proceedings before the concerned authorities and advance cause of the substantial justice. delay is attributable to genuine and justifiable factors, and ther no indication of mala conduct of the assessee is not such as to disqualify it from the equitable relief of condonation. Accordingly, the delay in filing the appeals stands condoned. The appeals are admitted for adjudication on merits. 3.3 As regards the impugned orders, it is seen that the Ld. CIT(E) rejected the application for registration under Section 12AB of the Income Tax Act, 1961, on the ground that the assessee failed to comply with statutory notices issued electronically via the tax Business application application was found to be incomplete, and despite issuance of notices dated 30.04.2024 and 14.05.2024 seeking compliance in terms of Rule 17A(2), the assessee failed to respond. finding of the Ld. CIT(E) in relation is reproduced as under: Shrijal Welfare Foundation ITA Nos. 2824 the explanation furnished by the assessee for condonation of delay should not be rejected particularly where arguable points of law on merits and refusal condonation of delay will cause erroneous loss and irreparable injury to the aggrieved party by terminating lis at the inception The object of prescribing the time period for filing of the appeal is to expedite the proceedings before the concerned authorities and advance cause of the substantial justice. In the present case, the delay is attributable to genuine and justifiable factors, and ther no indication of malafide conduct or culpable negligence. The conduct of the assessee is not such as to disqualify it from the equitable relief of condonation. Accordingly, the delay in filing the appeals stands condoned. The appeals are admitted for adjudication on merits. As regards the impugned orders, it is seen that the Ld. CIT(E) rejected the application for registration under Section 12AB of the Income Tax Act, 1961, on the ground that the assessee failed to comply with statutory notices issued electronically via the tax Business application (ITBA) portal. The order records that the application was found to be incomplete, and despite issuance of notices dated 30.04.2024 and 14.05.2024 seeking compliance in terms of Rule 17A(2), the assessee failed to respond. finding of the Ld. CIT(E) in relation to application for section 12AB is reproduced as under: Shrijal Welfare Foundation 4 ITA Nos. 2824 & 2825/MUM/2025 the explanation furnished by the assessee for particularly where arguable points of law on merits and refusal for condonation of delay will cause erroneous loss and irreparable at the inception. d for filing of the appeal is to expedite the proceedings before the concerned authorities and In the present case, the delay is attributable to genuine and justifiable factors, and there is ide conduct or culpable negligence. The conduct of the assessee is not such as to disqualify it from the equitable relief of condonation. Accordingly, the delay in filing the appeals stands condoned. The appeals are admitted for As regards the impugned orders, it is seen that the Ld. CIT(E) rejected the application for registration under Section 12AB of the Income Tax Act, 1961, on the ground that the assessee failed to comply with statutory notices issued electronically via the Income- portal. The order records that the application was found to be incomplete, and despite issuance of notices dated 30.04.2024 and 14.05.2024 seeking compliance in terms of Rule 17A(2), the assessee failed to respond. The relevant to application for section 12AB “3. On verification of the application in Form 10AB filed by the assessee, it was found that the application was not complete, and all the documents required to be accompanying the application were not furnished. Hence, a notice was issued to the applicant vid ITBA/EXM/FVEXM43/2024 30.04.2024 requesting the assessee set of documents not filed his reply. Further notice was also issued vide DIN & Notice NO MTBA/EXM/F/EXM43/2024 dated 14.05.2024 requesting to provide documents mentioned in 4. The Applicant has made no above notices. granted in terms of the provisions of section 12AB(1)(b) of the Act after being satisfied about the objects of the trust or institution, the genuineness of activities, and of any other law for the time being in force as are material f the purposes of necessary compliance by the Applicant, I am unable to arrive at a satisfaction on these parameters. As such, in view of the statutory limitation to decide on the application on or before 31.05.2024, I am left with no other option but to reject the application seeking registration under section 12AB of the 3.4 Before us, the learned counsel for the assessee submitted that the non-compliance occurred due to lack of awareness of the ITBA e-proceeding process notice, compounded by the trustee’s preoccupation with court matters. We find merit in this contention. Given the statutory consequences of denial of registration, and having regard to the principle that substantial justice must prevail, we are of the opinion that one further opportunity ought to be granted to the assessee. Consequently, the impugned orders passed by the Ld. CIT(E) rejecting the application under Section 12AB The matter is remanded back to the CIT(E) with a direction to Shrijal Welfare Foundation ITA Nos. 2824 On verification of the application in Form 10AB filed by the assessee, it was found that the application was not complete, and all the documents required to be accompanying the application were not furnished. Hence, a notice was issued to the applicant vide DIN & Notice No ITBA/EXM/FVEXM43/2024-25/1064460601(1) dated 30.04.2024 requesting the assessee to provide the complete set of documents mentioned in Rule 17(2). The assessee has not filed his reply. Further notice was also issued vide DIN & Notice NO MTBA/EXM/F/EXM43/2024-25/1064874151 (1) dated 14.05.2024 requesting to provide the complete set of documents mentioned in Rule 17A(2). 4. The Applicant has made no compliance to the terms of the above notices. Registration under section 12AB is terms of the provisions of section 12AB(1)(b) of the Act after being satisfied about the objects of the trust or institution, the genuineness of activities, and ithe compliance of any other law for the time being in force as are material f the purposes of achieving its objects. In the absence of necessary compliance by the Applicant, I am unable to arrive at a satisfaction on these parameters. As such, in view of the statutory limitation to decide on the application on or before 4, I am left with no other option but to reject the application seeking registration under section Act.” , the learned counsel for the assessee submitted that compliance occurred due to lack of awareness of the ITBA eding process by the trustee and the absence of any physical notice, compounded by the trustee’s preoccupation with court matters. We find merit in this contention. Given the statutory consequences of denial of registration, and having regard to the ple that substantial justice must prevail, we are of the opinion that one further opportunity ought to be granted to the assessee. Consequently, the impugned orders passed by the Ld. CIT(E) rejecting the application under Section 12AB and 80G The matter is remanded back to the CIT(E) with a direction to Shrijal Welfare Foundation 5 ITA Nos. 2824 & 2825/MUM/2025 On verification of the application in Form 10AB filed by the assessee, it was found that the application was not complete, and all the documents required to be accompanying the application were not furnished. Hence, a e DIN & Notice No 25/1064460601(1) dated the complete The assessee has not filed his reply. Further notice was also issued vide DIN & 25/1064874151 (1) he complete set of compliance to the terms of the Registration under section 12AB is to be terms of the provisions of section 12AB(1)(b) of the Act after being satisfied about the objects of the trust or ithe compliance of any other law for the time being in force as are material for eving its objects. In the absence of necessary compliance by the Applicant, I am unable to arrive at a satisfaction on these parameters. As such, in view of the statutory limitation to decide on the application on or before 4, I am left with no other option but to reject the application seeking registration under section , the learned counsel for the assessee submitted that compliance occurred due to lack of awareness of the ITBA and the absence of any physical notice, compounded by the trustee’s preoccupation with court matters. We find merit in this contention. Given the statutory consequences of denial of registration, and having regard to the ple that substantial justice must prevail, we are of the opinion that one further opportunity ought to be granted to the assessee. Consequently, the impugned orders passed by the Ld. CIT(E) and 80G are set aside. The matter is remanded back to the CIT(E) with a direction to provide a fresh opportunity to the assessee to furnish all requisite documents in support of its application, and to pass a reasoned order in accordance with law after affording due opportunit hearing. 3.5 The grounds raised allowed for statistical purposes. 4. In the result, both the appeals are allowed for statistical purposes. Order pronounced in the open Court on Sd/ (RAJ KUMAR CHAUHAN JUDICIAL MEMBER Mumbai; Dated: 05/06/2025 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Shrijal Welfare Foundation ITA Nos. 2824 opportunity to the assessee to furnish all requisite documents in support of its application, and to pass a reasoned order in accordance with law after affording due opportunit raised in both the appeals are accordingly allowed for statistical purposes. In the result, both the appeals are allowed for statistical nounced in the open Court on 05/0 Sd/- Sd/ (RAJ KUMAR CHAUHAN) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Shrijal Welfare Foundation 6 ITA Nos. 2824 & 2825/MUM/2025 opportunity to the assessee to furnish all requisite documents in support of its application, and to pass a reasoned order in accordance with law after affording due opportunity of in both the appeals are accordingly In the result, both the appeals are allowed for statistical /06/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai "