Assessee gets fresh hearing opportunity after section 80G approval rejection despite late application filing

ITAT Jaipur allowed the appeal for statistical purposes regarding rejection of section 80G approval. The assessee's application was filed outside the prescribed six-month period before provisional approval expiry. However, considering CBDT Circular 07/2024 dated 25.04.2024 providing relaxation, inadequate opportunity of hearing (only two notices issued), and the fact that section 12AB registration was granted recognizing trust activities, the matter was remanded to CIT(E) for fresh examination with adequate hearing opportunity.

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Issues Involved:
1. Condonation of delay in filing the appeal.
2. Rejection of approval under Section 80G of the Income Tax Act, 1961.

Issue-wise Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:

The assessee filed an appeal with a delay of 197 days. The reasons for the delay included inadvertent mistakes by the principal trustee, where the appeal documents were misplaced among other papers. The assessee submitted an affidavit explaining the delay and requested condonation. The Revenue objected, arguing that the reasons lacked merit and the appeal should be dismissed. However, the Tribunal noted that courts should adopt a pragmatic approach to advance substantial justice. Considering the affidavits and the decision of the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji and Others, the delay was condoned as the assessee was prevented by sufficient cause.

2. Rejection of Approval under Section 80G of the Income Tax Act, 1961:

The assessee's application for approval under Section 80G was rejected by the Commissioner of Income Tax (Exemption) [CIT(E)] due to non-compliance with document submission and doubts about the genuineness of activities. The assessee failed to submit bank statements and audited financial accounts despite multiple notices. The CIT(E) concluded that the genuineness of the assessee's activities could not be determined, leading to the rejection.

The assessee argued that the rejection was unlawful and against natural justice principles, noting that registration under Section 12AB had been granted, indicating genuine activities. The assessee also cited a recent CBDT advisory (Circular No. 07/2024) extending the due date for filing Form No. 10AB, which should apply to their case.

The Tribunal acknowledged the new CBDT circular and found merit in the assessee's argument that the rejection was contradictory given the granted registration under Section 12AB. The Tribunal noted that the assessee was not given sufficient opportunities to comply and decided that the matter required fresh examination by the CIT(E). The Tribunal restored the issue to the CIT(E) for a fresh decision, ensuring the assessee is given adequate opportunity to present relevant documents.

Conclusion:

The appeal was allowed for statistical purposes, with the matter remanded to the CIT(E) for a fresh examination in light of the CBDT circular and ensuring compliance with natural justice principles. The Tribunal clarified that this decision does not reflect on the merits of the dispute, which the CIT(E) should adjudicate independently.

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