Vashista Charitable Trust vs CIT(Exemption)

PER MANISH AGARWAL, AM :

The captioned appeal is filed by the assessee against the order of the ld. Commissioner of Income Tax (Exemption), Delhi [“Ld. CIT(E)”] dated 10.09.2022 rejecting the approval/registration sought u/s 12A(1)(ac)(iii) of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’).

It is observed that the appeal was filed delayed by 1060 days. Before us, an application for condonation of delay was filed duly supported by an affidavit. In the said petition, it is stated that management of the appellant society was not informed about any communication of the order from the office of ld. CIT(E). Further during the relevant period, the functioning of the appellant trust was severely affected due to serious differences and disputes among the family members and trustees belonging to the Vashista Group of businesses. These disputes created deep divisions and lack of co-ordination among the trustees, resulting in serious administrative difficulties and virtual paralysis in the management of the Trust’s affairs. Further, the main trustee of the appellant trust was suffering from cancer and was undergoing prolonged treatment, due to which he was unable to actively participate in or oversee the Trust’s operations. His illness further aggravated the lack of effective communication and decision-making within the Trust. It is thus, submitted that the delay was neither intentional nor willful and the circumstances are beyond the control of the assessee society thus it is requested to condone the delay.

Per contra, Ld. Sr. DR opposed the request of the assessee for condonation of delay in filing the appeal by the assessee society.

Having considered the arguments of both the parties, we find that there is a reasonable and sufficient cause with the assessee in filing the appeal delayed by 1060 days. It must be remembered that in every case of delay, there can be some lapses on the part of the litigant concerned however, that alone is not enough to turn down the plea of assessee and to shut the doors against it. When the explanation does not smack of mala fide or it is not put forth as a part of dilatory strategy, the Courts must give utmost consideration to such litigant and its right of hearing of appeal on merit ought not to be rejected. In the instant case there were disputes between the trustees and further the main trustee was undergone medical treatment of cancer. Considering the overall facts and circumstances of the case and in the larger interest of justice, delay in filling the appeal is hereby condoned and appeal of the assessee is taken for adjudication on merits.

It is observed that Ld. CIT(E) has denied the registration u/s 12A(1)(ac)(iii) as the assessee has failed to file the requisite details in support of genuineness of the activities carried by it and the charitable objects coupled with the commencement of such activities etc. thus, the Ld. CIT(E) has rejected the application filed by the assessee. Since the requisite details were not filed, ld. CIT(E) was not in the position to verify the genuineness of charitable activities carried out by the assessee society. Under these circumstances of the case, in the interest of natural justice, the matter is remanded to the file of Ld. CIT(E) for fresh adjudication in accordance with law after providing reasonable opportunities to the assessee. The Assessee society is directed to file all the requisite details before the Ld. CIT(E) in order to establish genuineness of its activity viz a viz charitable objects. With these directions, appeal of the assessee is allowed for statistical purposes.

In the result, appeal of the assessee is allowed for statistical purposes.