Back
2025 Supreme(Online)(ITAT) 5395
INCOME TAX APPELLATE TRIBUNAL (AHMEDABAD BENCH)
Makarand V. Mahadeokar, AM, Suchitra R. Kamble, JM
Aruna Kishor Foundation – Appellant
Versus
Commissioner of Income Tax (Exemption), Ahmedabad – Respondent
Income Tax Appeal No.293 and 294/Ahd/2025 | Income Tax Appeal No.323 and 324/Ahd/2025
For the Appellants/Petitioners: Shri A.K. Khandelwal
For the Respondents: Shri Durga Dutt
The court found that procedural errors by the CIT(E) unjustly denied a charitable organization the opportunity to seek registration and approval, emphasizing the importance of due process and substantive rights in administrative decisions.
Headnote:(A) Income-tax Act, 1961 - Sections 12AB and 80G - Rejection of applications for regular registration and approval - Commissioner of Income Tax (Exemption) rejected applications under section 12AB as non-maintainable, without adequate findings or opportunities - CIT(E) also rejected section 80G approval based on 12AB rejection, lacking independent adjudication - Applications considered as insufficiently examined and improperly dismissed without due process. (Paras 3, 4, 10, 14, 17)
(B) Delay in filing appeals - The Assessee’s delay in filing appeals excused due to bona fide belief based on a CBDT Circular, ruling that procedural rectifications were needed rather than outright rejection. The court upholds that procedural compliance should not thwart legitimate claims of a charitable organization. (Paras 2, 16)
Facts of the case:
The assessee, a registered charitable organization engaging in development work, faced rejection of registration under section 12AB and approval under section 80G, associated with procedural errors within the CIT(E) decisions.
Findings of Court:
The orders by the CIT were found to have procedural impropriety, and matters were restored to the CIT for fresh adjudication after providing the necessary opportunities to the appellant.
Issues: The appeal centered on the CIT(E)'s failure to provide adequate chances to the appellant for compliance with procedural norms, and whether the rejection orders were duly justified.
Ratio Decidendi: The court emphasized that a charitable organization should not be unduly penalized due to minor procedural lapses, and the rejection orders lacked adequate examination and justification.
Result: Appeals allowed for statistical purposes, other appeals dismissed as infructuous.
| Table of Content |
|---|
| 1. the need for adequate opportunities in legal proceedings and importance of independent adjudication. (Para 2 , 10 , 12 , 14) |
| 2. delays in procedural compliance justified due to a bona fide belief based on official circulars. (Para 3 , 4 , 11) |
| 3. failure to examine applications correctly based on procedural grounds can lead to unjust denials in charitable registrations. (Para 5 , 6 , 8 , 16) |
आदेश/ORDER
PER MAKARAND V.MAHADEOKAR, AM:
These four appeals filed by the assessee are directed against four orders passed by the learned Commissioner of Income Tax (Exemption), Ahmedabad [hereinafter referred to as “CIT(E)”] under section 12AB and section 80G of the Income-tax Act, 1961 [hereinafter “the Act”] rejecting applications made by the assessee in Form 10AB for regular registration. Two appeals arise out of the orders passed by the CIT(E). Since the issues involved are common and interrelated, all these appeals are disposed of by this consolidated order.
Condonation of delay
2. The registry noted the delay in filing appeal before us in case of ITA No. 323 and 324/Ahd/2025. Therefore, before proceeding to adjudicate the appeals on merits, it is pertinent to consider the applications filed by the assessee seeking condonation of delay in filing both the appeals before us. In ITA No. 323/Ahd/2025, the appeal has been filed against the rejection order dated 10.07.2024 passed by the learned Commissioner of Income Tax (Exemption), Ahmedabad, under section 12AB of the Act. The assessee was required to file the appeal within the statutory limitation period of 60 days. However, the present appeal has been filed with a delay of 156 days. Similarly, in ITA No. 324/Ahd/2025, which pertains to the rejection of approval under section 80G vide order dated 15.07.2024, the delay in filing the appeal is 151 days.
3. The explanation offered by the assessee, as supported by the affidavit sworn by Shri Diveyesh Trivedi, Director of the assessee, is that instead of pursuing the appellate remedy before the Tribunal, the assessee, under a bona fide belief based on CBDT Circular No. 07/2024 dated 25.04.2024, opted to file fresh applications for registration/approval within the extended timeline provided therein, i.e., up to 30.06.2024. It is the assessee’s submission that it genuinely believed the said Circular offered a remedial route and accordingly acted on the basis of legal advice and under a mistaken understanding of the correct procedural course. It was only upon receipt of the subsequent rejection orders dated 24.12.2024 and 25.12.2024, respectively, that the assessee came to realise that the fresh applications were not maintainable and that the proper and legally tenable course of action was to prefer an appeal against the original rejection orders passed in July 2024. Thereafter, the appeals were filed without further delay. The delay is thus explained to be occasioned due to a bona fide error and not attributable to any deliberate lapse or negligence. The assessee is a non-profit charitable organization working with limited legal and administrative resources for the welfare of the tribal and rural communities. It has been consistently stated that the action was taken in good faith and without any mala fide intent.
4. We have considered the contents of the affidavits, the chronology of events, and the reasons stated for the delay. In our considered view, the explanation tendered by the assessee constitutes sufficient cause within the meaning of section 253(5) of the Act, 1961. We find that the delay is neither contumacious nor deliberate, but rather a consequence of an erroneous interpretation of the Circular and the legal procedure. Accordingly, in the interest of substantial justice and considering the charitable nature of the assessee's activities, the delay of 156 days in ITA No. 323/Ahd/2025 and 151 days in ITA No. 324/Ahd/2025 is condoned.
Facts of the Case
5. The assessee is a company registered under section 8 of the Co
