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2022 (4) TMI 683 - AT - Income TaxExemption u/s 11 - rejection of approval u/s 12AA(1)(b)(ii) - assessee has not furnished the requisite details in response to the query raised through email - HELD THAT - Admittedly, the assessing after making the application for the registration under section 12AA of the Act should be vigilant enough to pursue the same. As such the job of the assessee does not come to an end on making the application for registration, rather after making the application, the job of the assessee begins to satisfy the learned CIT exemption in order to get the registration under section 12AA of the Act which is possible after making necessary compliances to the enquiries raised by the learned CIT exemption. Admittedly the assessee is carrying out charitable activities which is evident from the fact that the learned CIT exemption on a later date has granted registration under section 12AA to the assessee which is effective from the assessment year 2020-21 - assessee shall not be eligible for the benefit of exemption under section 11 of the Act for the assessment year 2019-20 for the reason that the registration application was rejected by the learned CIT exemption due to procedural lapse i.e. non-compliance of the notice issued by the learned CIT exemption. To our understanding, the assessee should not suffer merely on account of non-compliance particularly in a situation when its activities are genuine. Accordingly, in the interest of justice and fair play, we set aside the issue to the file of the learned CIT exemption for fresh adjudication - Appeal filed by the assessee is allowed for statistical purposes.
Issues involved:
1. Condonation of delay in filing the appeal before ITAT. 2. Rejection of approval under section 12AA(1)(b)(ii) of the Income Tax Act, 1961. 3. Granting registration under section 12AA of the Act. Issue 1: Condonation of Delay in Filing the Appeal Before ITAT: The appeal was filed 838 days late due to the assessee's belief that the registration application filed in 2019 would be validated from 2018. The assessee, facing health issues and procedural lapses, sought condonation of the delay. The ITAT considered the delay in light of the principles of substantial justice and technicality. Referring to legal precedents, the ITAT emphasized advancing substantial justice and noted the absence of deliberate delay by the assessee. The ITAT, following a pragmatic approach, condoned the delay of 838 days, emphasizing the importance of substantial justice over technical defects. Issue 2: Rejection of Approval Under Section 12AA(1)(b)(ii) of the Income Tax Act, 1961: The assessee's appeal was against the rejection of approval under section 12AA(1)(b)(ii) by the CIT(E). The CIT(E) rejected the original application due to non-compliance with queries. The subsequent application was granted registration effective from the assessment year 2020-21. The ITAT observed that the assessee's charitable activities were genuine, and non-compliance should not deprive the assessee of benefits. In the interest of justice, the ITAT set aside the issue to the CIT(E) for fresh adjudication, allowing the appeal for statistical purposes. Issue 3: Granting Registration Under Section 12AA of the Act: The assessee contended that the trust's charitable activities were beyond doubt, and registration under section 12AA was granted subsequently. The ITAT emphasized the need for vigilance post-application to satisfy the CIT(E)'s requirements. Acknowledging the genuine activities of the assessee, the ITAT set aside the issue for fresh adjudication by the CIT(E) to ensure fair play and justice. Consequently, the appeal was allowed for statistical purposes. In conclusion, the ITAT, while condoning the delay in filing the appeal, emphasized substantial justice over technicality. The rejection of approval under section 12AA(1)(b)(ii) was set aside for fresh adjudication due to the genuine charitable activities of the assessee. The judgment underscores the importance of compliance and vigilance post-application to secure registration benefits under the Income Tax Act.
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