2024 (3) TMI 142 - AT - Income Tax

Section 80G registration denied without section 12AB approval; appeal delay condoned for substantial justice

Sunil Tibrewal Foundation Versus CIT (Exemptions), Pune

The ITAT Mumbai condoned a 128-day delay in filing appeal, applying the principle that procedural rules serve justice and substantial justice should ... Condonation of delay - present appeal is delayed by 128 days - HELD THAT:- It is well established that rules of procedure are handmaid of justice. When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. In the present case, the assessee did not stand to benefit from the late filing of the appeal. Thus having perused the application, we are of the considered view that there exists sufficient cause for not filing the present appeal within the limitation period and therefore, we condone the delay in filing the appeal by the assessee. Registration u/s 80G denied - assessee is neither registered under section 12AB read with section 12A(1)(ac)(i)/section 12A(1)(ac)(iii) of the Act nor approved under section 10(23C) read with clause (i)/(iii) of the first proviso to the said section and thus the case is not covered under the exclusion as provided vide proviso to clause (i) of section 80G(5) - HELD THAT:- As relying on assessee own case [2024 (3) TMI 61 - ITAT MUMBAI] We deem it appropriate to restore the assessee’s application seeking approval under section 80G of the Act also to the file of the learned CIT(E) with a direction to consider the same afresh after the decision in respect of assessee’s application for approval under section 12AB of the Act. Needless to mention no order shall be passed without affording reasonable opportunity of being heard to the assessee. Issues involved:The judgment deals with the challenge against an order passed under section 80G(5) of the Income Tax Act, 1961 by the Commissioner of Income Tax (Exemptions), Pune. The main issues include the delay in filing the appeal, denial of registration under section 80G of the Act, and the restoration of the application for approval under section 80G.Delay in filing the appeal:The appellant filed an appeal challenging the order dated 29/03/2023 under section 80G(5) of the Act, delayed by 128 days. The reasons for the delay were explained, including the inadvertent selection of an incorrect code during the application process. The appellant sought condonation of the delay, citing the new regime's limitations in reapplying for approval under section 80G. The Tribunal, considering the parameters for granting condonation, found sufficient cause for the delay and thus condoned the delay.Denial of registration under section 80G:The appellant, a trust registered under the Maharashtra Public Trust Act, 1950, was denied registration under section 80G of the Act. The denial was based on the grounds that the appellant was neither registered under specific sections nor approved under relevant clauses, thus not meeting the conditions of section 80G(5)(i) of the Act. During the hearing, the appellant presented a previous order from a coordinate bench, which highlighted discrepancies in the communication of show cause notices. The Tribunal, in line with the previous decision, set aside the impugned order and directed the Commissioner to reconsider the appellant's application for approval under section 80G after deciding on the application for approval under section 12AB of the Act.Restoration of the application for approval under section 80G:Based on the findings of the coordinate bench in a previous case involving the appellant, the Tribunal deemed it appropriate to restore the appellant's application for approval under section 80G to the file of the Commissioner. The direction was to consider the application afresh after deciding on the application for approval under section 12AB of the Act. The impugned order was set aside, and the grounds raised by the appellant were allowed for statistical purposes.In conclusion, the Tribunal addressed the issues of delay in filing the appeal and denial of registration under section 80G of the Act. The judgment highlighted the importance of procedural rules in the administration of justice and granted relief to the appellant based on the specific circumstances and previous decisions.