SWABHIMANI BRAHM SANGATHAN,AHMEDABAD V. THE CIT(EXEMPTION), AHMEDABAD

ITA 42/AHD/2025

AI Insights

The case involves Swabhimani Brahm Sangathan, a public charitable trust, which appealed against the decision of the CIT (Exemption), Ahmedabad, rejecting their application for final registration under Section 12AB of the Income Tax Act, 1961. The CIT (Exemption) had rejected the application due to non-compliance with notices requesting documents, which the assessee claimed were not effectively served. The Tribunal noted the procedural lapses in the service of notices and the denial of a fair hearing, leading to the setting aside of the CIT's order and remanding the case for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126846 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ADJOURNMENT APPLICATION FILED
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Principle of natural justice; Charitable institution; Procedural lapse; Grounds of appeal; Commissioner; Commissioner of Income Tax; Statistical purposes; Effective service of notice; Trustee; Exempt; Adjudication on merits; Department; Trustees; Bona fide
• Section: 22

Judgement Text

" आयकर अपीलीय अिधकरण, अहमदा बा द \u0012ा यपीठ “ए“, अहमदा बा द । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD सु\u0018ी सुिच\u001aा का \u001bले, \u0012ा ियक सद एवं \u0018ी मकरंद वसंत महा देवकर, लेखा सद क े सम\"। ] ] BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER आयकर अपील सं /ITA No.42/Ahd/2025 िनधा \u0010रण वष\u0010 /Assessment Year : -NA- Swabhimani Brahm Sangathan 307, Chitrarath Complex Gujarat University SO President Hotel Navrangpura, Ahmedabad - 380 009 बनाम/ v/s. The CIT (Exemption) Ahmedabad – 380 015 \u0014थायी लेखा सं./PAN: AAVTS 8521 P अपीलाथ%/ (Appellant) &' यथ%/ (Respondent) Assessee by : None Revenue by : Adjournment Application filed सुनवाई की तारीख/Date of Hearing : 21/04/2025 घोषणा की तारीख /Date of Pronouncement: 22/04/2025 आदेश/O R D E R PER MAKARAND V. MAHADEOKAR, AM: This appeal filed by the assessee is directed against the order dated 18.09.2023 passed by the Commissioner of Income Tax (Exemption), Ahmedabad [hereinafter referred to as \"CIT(Exemption)\"], rejecting the application for final registration under Section 12AB of the Income Tax Act, 1961 [hereinafter referred to as \"the Act\"]. ITA No.42/Ahd/2025 Swabhimani Brahm Sangathan vs. The CIT(E) 2 2. The registry has noted a delay of 403 days (410 days as stated by the assessee in its application) in filing the present appeal. The assessee has filed an application for condonation of delay accompanied by an Affidavit sworn by Shri Kamlesh Jani, Trustee of the assessee trust. It is explained that the delay occurred as the notices issued by the CIT(Exemption) were uploaded on the ITBA portal without any physical service or proper communication to the trustees, and the assessee was under a bona fide belief that its application was still under consideration. 3. Considering the reasons advanced and as detailed in the fats of the case, we are satisfied that the delay is neither deliberate nor intentional. Accordingly, the delay in filing the appeal is condoned, and the appeal is admitted for adjudication on merits. 4. The assessee is a public charitable trust registered with the Charity Commissioner, Gujarat on 08.06.2018, as mentioned in the affidavit. It was provisionally registered under Section 12AB of the Act and subsequently filed an application for final registration in Form 10AB on 06.03.2023. The CIT(Exemption) issued notices dated 18.07.2023, 19.08.2023, and 12.09.2023 calling for various documents and clarifications. The assessee contends that no effective service of these notices was made upon the trustees and that the notices were merely posted on the ITBA portal, without the assessee’s knowledge. Consequently, the assessee did not file a timely response. The CIT(Exemption), citing failure to furnish the required information, proceeded to reject the application for final registration and cancelled the provisional registration vide order dated 18.09.2023. ITA No.42/Ahd/2025 Swabhimani Brahm Sangathan vs. The CIT(E) 3 4. Aggrieved, the assessee has preferred the present appeal before us raising following grounds of appeal: 1. The learned CIT (Exemptions) has rejected the application for final registration vide order No. ITBA/EXM/F/EXM45/2023-24/1056209005(1) under Rule 2C/11AA/17A dated 18.09.2023 citing the reason that the appellant failed to furnish the documents required. 2. The learned CIT (Exemptions) had sent notices calling for various documents on 18.07.2023, 19.08.2023, and 12.09.2023, which were not delivered to the appellant but posted on the website, and therefore, the appellant was not aware of any of the above notices. 3. The appellant craves leave to add, amend, alter, edit, delete, modify, or change all or any of the grounds of appeal at the time of or before the hearing of the appeal. 5. When the matter was called for hearing, neither the Authorized Representative for the assessee nor the learned Departmental Representative for the Revenue was present. The learned Departmental Representative had filed an application seeking adjournment. However, considering the nature of the issue involved and upon perusal of the material available on record, we are of the considered opinion that the appeal can be disposed of on merits. Accordingly, we proceed to adjudicate the appeal ex-parte qua both parties, based on the material available on record and in accordance with law. 6. We have carefully perused the record including the order passed by the CIT(Exemption) and the grounds raised in the appeal. It is evident that the CIT(Exemption) rejected the assessee’s application for registration under Section 12AB on the ground that the assessee failed to comply with notices calling for requisite documents. The assessee, however, has consistently maintained that no effective service of notices was made and that the notices ITA No.42/Ahd/2025 Swabhimani Brahm Sangathan vs. The CIT(E) 4 were merely uploaded on the ITBA portal without actual communication to the trustees. 6.1. In our opinion, before rejecting an application under Section 12A/12AA, the Commissioner (Exemption) must afford a reasonable opportunity to the assessee and objectively satisfy himself about the genuineness of the trust's activities and its objects. Denial of registration merely for procedural lapses without granting an effective hearing violates principles of natural justice. 6.2. In the present case, the manner in which the notices were issued and the subsequent rejection without ensuring effective service indicates that the assessee was deprived of a reasonable opportunity of being heard. Therefore, the impugned order cannot be sustained. 6.3. In view of the above, in the interest of substantial justice, we deem it appropriate to set aside the impugned order dated 18.09.2023 passed by the CIT(Exemption), Ahmedabad and restore the matter to his file for deciding the application for registration under Section 12AB afresh, after granting due and reasonable opportunity of hearing to the assessee. 6.4. The assessee is also directed to promptly comply with all notices and co-operate with the proceedings without seeking unnecessary adjournments. ITA No.42/Ahd/2025 Swabhimani Brahm Sangathan vs. The CIT(E) 5 7. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 22 April, 2025 at Ahmedabad. Sd/- Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER (MAKARAND V. MAHADEOKAR) ACCOUNTANT MEMBER अहमदाबाद/Ahmedabad, िदनांक/Dated 22/04/2025 टी.सी.नायर, व.िन.स./T.C. NAIR, Sr. PS 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 , आयकर अपीलीय अिधकरण , राजोकट/DR,ITAT, Ahmedabad, 6. गाड\u0010 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) : 21.4.2025 2. Date on which the typed draft is placed before the Dictating Member. : 21.4.2025 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. : 22.4.2025 7. Date on which the file goes to the Bench Clerk. : 22.4.2025 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 : "