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2024 Supreme(Online)(ITAT) 357
INCOME TAX APPELLATE TRIBUNAL (INDORE BENCH)
SHRI VIJAY PAL RAO, JM, SHRI B.M. BIYANI, AM
Aarambh Foundation – Appellant
Versus
CIT-(Exemption) Bhopal – Respondent
ITA No. 90/Ind/2023
For the Appellants/Petitioners: Shri Kunal Agrawal AR
For the Respondents: Shri Ashish Porwal, Sr. DR
A trust's nominal fee for services does not constitute a commercial activity if it is aimed at achieving charitable purposes, allowing for exemption under tax laws.
Headnote:(A) Income Tax Act, 1961 - Section 12AB - Registration - Appeal against rejection of application for registration of a charitable trust - Delay in filing appeal condoned as bona fide mistake and not malafide - The CIT(E) concluded the activities were commercial based on nominal charges, but the nature of activities deemed charitable under Section 2(15) - Therefore, appeal allowed. (Paras 3, 5, 7.1)
(B) Charitable Activities - The definition of charitable purposes to include relief of the poor, education, and preservation of environment - Activities must not be primarily commercial - The assessee’s activities fall within legitimate charitable scope. (Paras 7.2, 7.4)
(C) Condonation of Delay - Substantial justice over technical rules for delay in appeal filing - Explanation for delay accepted. (Paras 4, 6)
| Table of Content |
|---|
| 1. introduction and filing of appeal against registration rejection. (Para 1 , 2) |
| 2. discussion on delay in filing appeal and condonation. (Para 3 , 4) |
| 3. activities of the assessee and their classification as charitable. (Para 5) |
| 4. court’s observations and comparison with previous judgments. (Para 6 , 7) |
| 5. final decision to allow the appeal. (Para 8) |
ORDER
Per Vijay Pal Rao, JM:
This appeal by the Assessee is directed against the order dated 20.10.2022 of Commissioner of Income Tax (Exemption), passed u/s 12AB of the Act whereby the application of the assesse for registration u/s 12AB was rejected.
2. There is a delay of 93 days in filing the present appeal. The assessee has filed an application for condonation of delay which is supported by the affidavit of the assessee. Ld.AR of the assesse has submitted that due to inadvertence the assessee after receiving impugned order kept the same in almirah and forgot to discuss the same with the counsel for filing the appeal. Later on when the assesse has again checked the E-mail and noticed the same order it was realized that the appeal against the impugned order is yet to be filed and accordingly the assessee took immediate steps for filing the appeal. Thus, Ld. AR has submitted that it is bona fide mistake on the part of the assesse for not taking steps within the period of limitation for filing the appeal. He has contended that the assessee has not got any benefit or achieved any purpose due to the delay in filing the present appeal. Hence Ld. AR has submitted that in the interest of justice the delay in filing the appeal may be condoned and appeal of the assessee be heard and adjudicated on merits.
3. On the other hand, ld. DR has raised no serious objection against the contention of delay and left the matter to the wisdom of the bench.
4. Having considered rival submissions and careful perusal of the contents of the application for condonation of delay as well as affidavit filed by the assessee we find that the assessee has explained the cause of delay as inadvertence and bonafide mistake for not filing the appeal in time and therefore, the conduct of the assessee is found to be honest in explaining the cause of delay. Further this is an appeal against rejection of application for registration u/s 12AB of the Act and there is no possibility of taking any advantage or achieving any hidden purpose by filing the appeal belatedly. Thus, the explanation of the assessee for delay is found to be bona fide and not to cover any ulterior purpose or an attempt to save the limitation in under head way. The assesse has fairly explained the reasons and has not acted in malafide therefore a liberal construction of sufficient cause is required to be made. It is settled proposition on the point that whenever substantial justice and technical considerations are opposed to each other, cause of substantial justice has to be preferred by taking a justice oriented approach while deciding the matter of condonation of delay. Accordingly in the facts and circumstances of the case we are satisfied that the assesse has explained a reasonable and sufficient cause for not filing the appeal within the period of limitation and hence, the delay of 93 days in filing the appeal is condoned. The assessee has raised following grounds of appeal:
“1. The Ld. CIT grossly erred in issuing order rejecting application for registration under section 12AB of the Act.
2. The Ld. CIT grossly erred on facts and also in law by considering charitable activities as commercial activities and rejecting application for registration under section 12AB of the Act.
3. The Ld. CIT grossly erred on facts and also in law for not considering submission filed, law and information/documents already on record and rejecting application for registration under section 12AB of the Act.”
5. Ld. AR of the assesse has submitted that the assessee society has been constituted to carry on the charitable objects like Animal Welfare including medi
