Educational trust's 4-year delayed appeal condoned despite CIT denying sections 12A and 80G registration for alleged profitable business operations

ITAT Ahmedabad condoned a 4-year delay in filing appeal against denial of registration under sections 12A and 80G, citing the assessee's operation in a remote village with limited resources and no mala fide intention. The CIT had denied registration to an educational trust, claiming it was primarily running a profitable business through collection of meal, hostel, and admission fees. ITAT restored the matter to CIT for de-novo consideration, noting the trust's residential boarding model and provisional registration granted for subsequent years. The exemption under section 11 was also restored to the Assessing Officer for reconsideration following the registration determination.

---

---

Issues Involved:
1. Non-granting of registration under Section 12A of the Act.
2. Non-grant of registration under Section 80G of the Act.
3. Quantum addition made by the Assessing Officer on account of denial of exemption under Section 11 of the Act.

Issue-wise Detailed Analysis:

1. Non-granting of registration under Section 12A of the Act:
- The assessee's appeal (ITA No. 2311/Ahd/2017) pertains to the denial of registration under Section 12AA of the Act. The appeal was time-barred by approximately 4 1/2 years. The delay was attributed to the accountant's failure to inform the assessee about the denial of registration.
- The Tribunal observed that the assessee is a Trust operating educational activities in a remote village with only a part-time accountant. The Supreme Court's ruling in Collector Land Acquisition, Anantnag vs. MST Katiji emphasized that procedural rules should not hinder substantial justice.
- The Tribunal condoned the delay, noting no mala fide intention in the late filing. The assessee's appeal was allowed for statistical purposes and remanded to the CIT for de-novo consideration after giving due opportunity of hearing.

2. Non-grant of registration under Section 80G of the Act:
- The assessee's appeal (ITA No. 2310/Ahd/2017) pertains to the denial of registration under Section 80G of the Act. The delay in filing the appeal was condoned.
- The CIT had dismissed the application for registration under Section 80G on the ground that the trust was not registered under Section 12A, a prerequisite for Section 80G registration.
- The Tribunal restored the matter to the CIT for de-novo consideration in light of the remand of the Section 12A registration issue.

3. Quantum addition made by the Assessing Officer on account of denial of exemption under Section 11 of the Act:
- The assessee's appeal (ITA No. 2349/Ahd/2017) pertains to the disallowance of Rs. 33,84,990/- claimed under Section 11 of the Act. The CIT(A) had confirmed the disallowance due to the assessee's inability to provide details of registration under Section 12A/12AA.
- The Tribunal restored the issue to the Assessing Officer for appropriate orders based on the outcome of the Section 12A registration proceedings.

Combined Result:
- All appeals filed by the assessee are allowed for statistical purposes. The matters are remanded to the respective authorities for de-novo consideration and appropriate orders in accordance with the law after giving due opportunity of hearing.

Pronouncement:
- This Order pronounced in Open Court on 20/05/2024.

---