2020 (9) TMI 728 - AT - Income Tax

Condonation of delay - delay of 158 days - HELD THAT - On perusal of the discharge summary and medical prescription by doctors, there is no doubt that the settler and managing trustee was suffering from serious illness and could not pay attention to the issue of filing appeals of the assessee trust on time. On the issue as why the other trustee(s) did not file those appeals, the Ld. Counsel submitted that the impugned order was served through email address of the son of Sh. Naresh Kumar Gupta, and thus other Trustees were not aware of the Income-Tax proceedings of the trust. In our opinion, the illness of settler and managing trustee and the impugned order being not in the reach of other trustees, is a reasonable cause for delay in filing the appeals. By making the delay, the assessee trust does not get benefit in any manner. The delay is not deliberate and there is not any kind of malafide on the part of the assessee trust. In view of the facts and circumstances and in the interest of the substantial justice, we condoned the delay in filing these appeals and the parties were asked to argue on the merit of the appeals. Exemption u/s 11 - trust for registration u/s 12AA and exemption u/s 80G rejected - assessee failed to justify genuineness of its activities - CIT(E) asked the assessee to file certain documents, inter alia documents of the ownership of plot of land and its arrangement of transfer etc., but the assessee failed to submit said documents - HELD THAT - Before us, assessee has produced all the documents, which were requested by the Ld CIT(E). These documents are available on page 1 to 10 of the paper-book. Counsel accordingly requested for restoring the matter back to the file of the Ld. CIT(E). DR, on the other hand, submitted that the opportunity provided by the Ld. CIT (E) were not availed by the assessee and therefore if the assessee is allowed to go back to the Ld CIT(E), the assessee should be directed to file all the documents and co-operate before the Ld. CIT(E) in disposal of the proceedings . In view of the documents produced before us as additional evidence, we feel it appropriate to set aside the order of the Ld. CIT (E) and restore the issue of registration under section 12AA and exemption under section 80G, back to the file of the Ld CIT(E) for deciding afresh with the direction to the assessee to produce all the documents required for examination of conditions for granting of registration under section 12AA and exemption under section 80G of the Act. Accordingly, the grounds raised in both the appeals are allowed for statistical purposes.

Summary

Issues Involved:
1. Rejection of the application for registration under section 12AA of the Income Tax Act, 1961.
2. Rejection of the application for exemption under section 80G of the Income Tax Act, 1961.
3. Condonation of delay in filing the appeals.

Issue-wise Detailed Analysis:

1. Rejection of the Application for Registration under Section 12AA:
The assessee's application for registration under section 12AA was rejected by the Learned Commissioner of Income-Tax (Exemption) [Ld. CIT(E)] on the grounds that the assessee failed to justify the genuineness of its activities. The Ld. CIT(E) requested certain documents, including ownership documents of a plot of land and its arrangement of transfer, which the assessee failed to submit. Consequently, the registration under section 12AA was denied. The Tribunal noted that the Ld. Counsel for the assessee provided these documents during the appeal and requested the matter to be restored to the Ld. CIT(E) for reconsideration.

2. Rejection of the Application for Exemption under Section 80G:
The rejection of the application for exemption under section 80G was consequential to the rejection of the registration under section 12AA. Since the registration under section 12AA was not granted due to the failure to submit required documents, the exemption under section 80G was also denied. The Tribunal decided to restore the issue back to the Ld. CIT(E) for fresh consideration along with the registration under section 12AA.

3. Condonation of Delay in Filing the Appeals:
The appeals were filed with a delay of 158 days. The delay was attributed to the serious illness of Sh. Naresh Kumar Gupta, the Settler/Managing Trustee, who was hospitalized and advised bed rest. The Ld. Counsel provided medical documents to support the claim. The Department Representative (DR) opposed the condonation, arguing that other trustees could have filed the appeal. However, the Tribunal found the illness of the settler and the lack of awareness of other trustees about the proceedings to be a reasonable cause for the delay. The Tribunal condoned the delay, emphasizing that the delay was not deliberate or mala fide.

Conclusion:
The Tribunal condoned the delay in filing the appeals and restored the issues of registration under section 12AA and exemption under section 80G back to the Ld. CIT(E) for fresh consideration. The assessee was directed to produce all necessary documents before the Ld. CIT(E) for the examination of conditions for granting registration and exemption. The appeals were allowed for statistical purposes, ensuring that the matter would be reconsidered on its merits.