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Judgment
Per Raj Kumar Chauhan, Judicial Member:
The appeals are directed against the order of the Ld. CIT(E), Delhi, dated 29.11 .2024, wherein the application for registration u/s 12A(1)(ac)(iii) o f the Act, filed by the applicant on 31.05.2024 in ITA Nos. 2515 & 2516/Del/2026, respectively alo ngwith request to the approval u/s 80G of the Act has been rejected in the absence o f reg istratio n u/s 12AB of the Act.
The asse ssee has filed an affidavit seeking condonation of delay of 403 da ys in filing both appeals. The contents of the affidavit are reproduced as under:
We have considered the co ntents of the affidavit seeking condonation of delay and the sub missio ns made by the ld. AR. We find that the assessee has satisfactorily explained the reasons for the delay. In view o f the principles laid down by the Hon'ble Supreme Court in Collector, Land Ac quisition vs. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC), wherein it has been held that a liberal approach should be adopted while considering applicatio ns for condonation of delay to do substantial justice, we are satisfied that the assessee has shown sufficient cause. Accord ingly, the delay of 403 days in filing both the appeals are condoned in the larg er interest of justice, and the appeal is admitted for adjudication o n merits.
By this common order, we propose to decide the ITA Nos. 2515 & 2516/Del/2026 as the appellant is the same and facts are similar and accordingly in order to avoid repetition, bo th the appeals are taken up toge ther for disposal.
Aggrieved by the impugned ord er, the assessee is in appeal and has raised fo llowing grounds as under:
ITA N o. 2515/Del/2026:
“1 . That on t he fac ts and in law , the lear ned CIT (Exempti ons ) err ed in r ej ecti ng t he application for registrati on under sec tio n 12A(1 )(ac)(ii) / 12AB of the Inc ome-tax Act, 1961, witho ut p roperly appreciati ng t he docume nts already placed on r ecord and without conducti ng a fair and obj ec tive exami nati on of the material submitt ed.
2.That the learned CIT (Exemptions ) grossly erred in co ncludi ng that the appellant did not furnish requisite informati on, wher eas all rel evant documents, explanati ons , fi nancial records , activity details, affidavits and s uppor ti ng papers had been filed on dated 25-06 -2024 and 30-09-2024 Physically.
3.That t he rej ec tion of appli cati on sol ely on alleged "non-c ompliance" is bad i n law as the lear ned CIT (Exempti ons ) failed t o consider t he pri ncipl e that registrati on cannot be de nied for proc edural or technical laps es where required submission has already bei ng submitted withi n time and when the genui neness of activities and c haritable obj ects stands established.
4.That the learned C IT (Exemptio ns) violated pri nciples of natural j ustice that our submissions dated 25-06-2024 and 30-09-2024 was not co nsider ed.
5.That t he fi ndi ng that t he tr ust "failed to prove genui neness of activities " is c ontrary to r ecord, as doc umentary evidence such as fi nancial statements , activity det ai ls, ba nk stat ements, af fidavits and other supp orti ng proofs were already available with the depart ment.”
ITA N o. 2516/Del/2026:
“1 . That on t he fac ts and in law , the lear ned CIT (Exempti ons ) err ed in r ej ecti ng t he application for registrati on under section 80G(5 )(ii i) o f the Income -tax Act, 1961,without properly appreciati ng the doc uments already plac ed on record and without co nducti ng a fair and obj ective examinati on of the mate rial submit ted.
2.That the learned CIT (Exemptions ) grossly erred in co ncludi ng that the appellant did not furnish requisite informati on, wher eas all rel evant documents, explanati ons , fi nancial records , activity details, affidavits and s uppor ti ng papers had been filed on dated 25-06 -2024 and 30-09-2024 Physically.
3.That t he rej ec tion of appli cati on sol ely on alleged "non-c ompliance" is bad i n law as the lear ned CIT (Exempti ons ) failed t o consider t he pri ncipl e that registrati on cannot be de nied for proc edural or technical laps es where required submission has already bei ng submitted withi n time and when the genui neness of activities and c haritable obj ects stands established.
4.That the learned C IT (Exemptio ns) violated pri nciples of natural j ustice that our submissions dated 25-06-2024 and 30-09-2024 was not co nsider ed.
5.That t he fi ndi ng that t he tr ust "failed to prove genui neness of activities " is c ontrary to r ecord, as doc umentary evidence such as fi nancial statements , activity det ai ls, ba nk stat ements, af fidavits and other supp orti ng proofs were already available with the depart ment.
At the very outset, the ld . AR fo r the assessee submitted that CIT(E) has wrongly rejected the provisio nal approval, dismissing the application for registratio n u/s 12 A(1)(ac)(iii) of the Act and application for grant of approval u/s 80G(5) benefit on the ground s which are beyond the scope of Section 12AB and 80G of the Act respectively in as much as the activities carried on by the assessee are genuine and the assessee has undisputedly co mplied with all other laws which are material for achieving the objects, and thus the imp ugned order is beyond jurisdiction and bad in law. It is further submitted that ld . CIT(E) rejected the registration without issuance of any prior show cause notice confronting the applicant with reasons for proposed rejection o f registration, which is no t only violative of the provisio ns o f the Act but also the princip les of natural justice. It is further submitted that the application for registration was reje cted without affording adequate opportunity of being heard and without judiciously considering the submissions / documents furnished by the applicant. It was further submitted that since principle of natural justice has not been followed while p assing the impugned orders by the Ld. CIT(E), therefore, it is requeste d that one more opportunity may kindly be provided to the assessee, in order to canvass its case before the ld. C IT(E) by furnishing the requisite docume nts/evidences, if any.
On the other hand, the ld. DR stated that since the assessee has failed to satisfy the genuineness of the activities carried out, he nce, the ld. CIT(E) has rightly rejected the application filed in Form 10AB for grant of registratio n u/s. 12A(1)(ac)(iii) and also no t granted the approval u/s. 80G(5)(iii) of the Act. In view of above, it is requested that both the appeals of the assessee, may be dismissed according ly.
We have peruse d the impug ned orders of the Ld. C IT(E), however, for the sake of clarity the extract of the same are reproduced as under:-
“The applicant is a Trus t and date of Incorporati o n is 22.12.2022. T he appli cant has filed a n application dated 31.05.2024 in Form 10AB for registration u/s12A(1)(ac)(iii) of the Income Tax Act, 1961. As per col umn No 3 of t he Form 10AB the applicant is carrying out ac tivities whi ch are of R eligi ous cum c haritable nat ure The applicant was issued a questio nnaire dated 10.06.2024 with a request t o furnish certai n det ails / doc uments / clari fi cations i n s upport of its claim of appr oval u/s 12A. The cas e was fi xed for complia nce on 25.06.2024. The applicant did not file any reply and again notice dat ed 13.09.2024 issued for c ompli ance on or before 30.09.2024but no r eply received fro m t he applicant.
2.Thereafter, a fi nal opportunity was granted by issuing the notice dated09.10.2024 and in r espo nse of this notice, t he applicant filed its reply on 17.10.2024.
3.Based o n doc uments submi tted by applicant, t he followi ng discrepanci es are noted :
i)The applicant has not pr ovided confirmati on f rom the donors fr om whom t he donations were accepted.
ii) Applicant has failed to provide any document to subst antial its claim f or char itable activities like phot ographs /bills etc.
iii) Applicant did not submit a ny detail o f benefici aries who got benefits from the chari ta ble ac tivities of the trust .
iv) Assessee has sub mitted receipts of donati on given by it to other trusts but did not provi de the trust dee ds/objec tives of suc h tr usts. In a bsence of trust dee d/objectives of those recipient tr us ts , these donations cannot be prov ed as c haritable activity.
v)On perusal of Income & Expenditur e Account for F.Y. 2023-24, it is notic ed t hat Rs . 15,72,500/- ar e claimed as e xpenditure under the head ‘Social Activities’, however, no fur the r details of suc h activities ar e pr ovided.
As per discussion above the a pplicant has failed t o prove tha t activitie s for charitable purpo se, as menti oned in section 2 (15) of IT Act , are act ually bei ng undertaken by it.
5.In li ght of the above, t he applicatio n filed in Form 10AB for grant o f r egistrati on u/s 12A(1 )(ac )(iii) is hereby reject ed.
6.Since, the a pplication filed i n Form 10AB see ki ng appr oval u/s 12A is reject ed, t he provisi onal registrat ion granted vi de order dat ed 01.04.2023 havi ng Uni que Registration Number AB FTS9969JE20221 issued for t he perio d fr om A.Y. 2 023-24 to A.Y. 2025-26 is al so cancelled.”
From the above, it is evident that CIT(E) has rejected the application for registration and requisite appr oval in the absence of donor confirmations, evidence such as photographs/bills in support of charitable activities, details of beneficiaries, details of recipient tr usts and supporting particulars relating to expenditure under the head “ Social Activities”. We are of the considered opinion that applicant need to be given one more effective opportunity to submit tho se documents in the larger interest of justice. Hence, the impugned orders are set aside and matter is restored to the file of the ld. CIT(E) for deciding afr esh. The assesse e/applicant is also directed to make the necessary submissions/detailed material before the Ld. CIT(E) in order to canvass its case appropriate ly before the Ld. CITE(E).
In the result, both the appeals of the assessee are allowed for statistical purposes in above terms.