2021 (4) TMI 340 - AT - Income Tax

Exemption u/s 11 - denying sec. 12AA registration to the assessee - charitable activity u/s 2(15) - failure on assessee's part in removing all defects - HELD THAT - We thus restore the instant issue back to him to be adjudicated afresh within three effective opportunities of hearing it is made clear that the assessee or its Authorised Representative shall appear before CIT(E) on or before 30.07.2021 with all relevant evidences; at his own risk and responsibility.

Summary

Issues:
1. Delay of 784 days in filing appeals for A.Y. 2016-17 before the CIT(Exemptions), Hyderabad.
2. Denial of sec. 12AA registration to the assessee by the CIT(E).
3. Failure on the assessee's part to rectify defects in the registration application.
4. Restoration of the issue of sec. 12AA registration back to the CIT(E) for fresh adjudication.

Issue 1: Delay in Filing Appeals
The appellant filed an affidavit requesting condonation of the 784-day delay in filing the appeals, citing inadvertence and administrative issues due to the office's relocation. The appellant's counsel argued that the delay was unintentional and sought condonation to prevent irreparable loss. The Tribunal, considering the Supreme Court's stance on substantial justice, condoned the delay, emphasizing that technicalities should not impede the cause of justice.

Issue 2: Denial of sec. 12AA Registration
The CIT(E) denied sec. 12AA registration to the assessee due to unresolved objections regarding the dissolution clause and incomplete documentation. The appellant expressed willingness to rectify the deficiencies and highlighted the charitable nature of offering scholarships to needy students under sec. 2(15) of the Act. The Revenue supported the CIT(E)'s decision based on the objections raised.

Issue 3: Failure to Rectify Defects
The Tribunal noted the CIT(E)'s primary reason for denying sec. 12AA registration was the assessee's failure to address all defects in the application. Consequently, the Tribunal remanded the issue back to the CIT(E) for fresh adjudication. The assessee was instructed to appear before the CIT(E) with all relevant evidence within a specified timeframe for further review.

Issue 4: Restoration of Registration Issue
In light of the above, the Tribunal allowed the assessee's former appeal related to sec. 12AA registration and the consequential appeal involving sec. 80G proceedings for statistical purposes. Both appeals were permitted to proceed, and a copy of the order was directed to be placed in the respective case files. The decision was pronounced in Open Court on 29/03/2021 by the presiding judge, S. S. Godara, JM.

This detailed analysis covers the key issues addressed in the judgment, providing a comprehensive overview of the Tribunal's decision and the reasons behind it.