2023 (9) TMI 843 - HC - Income Tax

Application u/s 12AA and 80G rejected - reason for rejecting the application was that it had been submitted physically, and not electronically - argument advanced on behalf of petitioner/assessee is that at the point in time when the subject application was filed the prescribed form was not available in electronic mode - HELD THAT - We are unable to persuade ourselves to accept Revenue submission for the reason that until 05.03.2018 and thereafter, the Petitioner/assessee s application was firstly entertained and processed, and then documents in support of the application were sought, which were supplied by the petitioner-assessee. It was only in September, 2018 that the impugned communication was issued to the petitioner/assessee. Also on the date when the petitioner/assessee had filed the subject application physically, the prescribed form i.e., Form 10 A, was not available in electronic mode. The petitioner/assessee, in any case, till that date could not have taken recourse to electronic mode. Thus, for the foregoing reasons, we are inclined to allow the writ petition.

Summary

Issues involved: Impugning rejection of application under section 12AA and 80G of the Income Tax Act, 1961 for being physically filed.

Summary:
The writ petition challenged the rejection of the petitioner/assessee's application under section 12AA and 80G of the Income Tax Act, 1961, which was physically filed. The impugned order cited physical submission as the principal reason for rejection. However, it was noted that the application was initially entertained and processed by the respondents/revenue even though it was filed physically. The petitioner/assessee had submitted the required documents as per the communication from the office of the Commissioner of Income Tax. Subsequent letters in support of the application were also filed. The record showed that the petitioner/assessee was not informed until the impugned order in September 2018 that physical filing was not acceptable due to the unavailability of the prescribed form in electronic mode at the time of filing. The Court found that the petitioner/assessee had acted in good faith and had promptly provided the necessary documents when requested. The Court held that the rejection based solely on the physical filing was unjust as electronic filing was not an option when the application was submitted. Consequently, the Court allowed the writ petition, set aside the impugned letter, and directed the respondent/revenue to pass consequential orders on the application's merits.

The judgment emphasized that the petitioner/assessee had complied with the process in good faith, submitting documents promptly upon request. It was highlighted that the prescribed form was not available in electronic mode when the application was filed, making electronic filing impossible at that time. The Court rejected the argument that the petitioner/assessee should have proactively moved the application electronically, as the application had been processed without issue until the rejection. The Court concluded that the rejection based solely on the physical filing was unwarranted, given the circumstances of the case. The writ petition was allowed, and the impugned letter was set aside, with directions for the respondent/revenue to reconsider the application on its merits.