2024 (7) TMI 492 - AT - Income Tax

Delay in filing of the present appeal by 840 days - Rejection of registration application U/s 12AA - assessee trust was under the incorrect impression that once registration had been granted u/s 12AA of the Act, upon filing of the second application on the same set of facts, the benefit of exemption was available to the assessee trust for the impugned assessment year as well and secondly, it was submitted that the assessee has been genuinely carrying out charitable activities, which is evident from the fact that on filing of second application for grant of registration, the CIT(Exemptions) had granted registration under Section 12AA of the Act to the assessee trust on the same set of facts HELD THAT - The delay in filing of the present appeal has been caused due to bona fide mistake on part of the assessee trust and also on account of the fact that consultants of the assessee never advised the assessee to file appeal against the first order of rejection. Accordingly, looking into the instant facts, the delay in filing of the present appeal is hereby condoned. Registration u/s 12AA of the Act on filing of second application - As the fact that upon filing of second application for grant of registration u/s 12AA of the Act, the assessee trust was granted registration u/s 12AA of the Act, on same set of facts points to the fact that that the assessee trust has a genuine case on merits, and that the assessee has been able to establish that it is carrying on genuine charitable activities. Accordingly, in the interest of justice, looking into the instant facts, the matter is being restored to the file of CIT(Exemptions) to consider the application of the assessee trust afresh, in accordance with law. Appeal of the assessee is allowed for statistical purposes.

Issues:
1. Delay in filing the appeal by the Assessee.
2. Rejection of registration application under Section 12AA of the Income Tax Act, 1961.
3. Grounds of appeal by the Assessee.
4. Condonation of delay in filing the appeal.
5. Merits of the case and restoration of the matter to the file of CIT(Exemptions).

Analysis:
1. Delay in filing the appeal: The appeal filed by the Assessee was time-barred by 840 days. The Assessee explained that the delay was due to the belief that the registration granted under Section 12AA of the Act on the second application would apply for the impugned Assessment Year 2019-20 as well. The delay was also attributed to the Assessee not being advised by consultants to appeal against the initial rejection order. The Tribunal, considering the bona fide reasons and the genuine charitable activities of the Assessee, condoned the delay in filing the appeal.

2. Rejection of registration application: The Assessee had applied for registration under Section 12AA of the Act, which was initially rejected by the CIT(Exemptions) without considering the details filed by the Assessee trust. However, on a subsequent application, the registration was granted on the same set of facts. The Tribunal observed that the Assessee had a genuine case on merits as evidenced by the subsequent approval of registration. Therefore, the matter was restored to the file of CIT(Exemptions) for fresh consideration in accordance with the law.

3. Grounds of appeal: The Assessee raised various grounds of appeal related to the rejection of the registration application under Section 12AA of the Act. The Assessee contended that the rejection was in violation of natural justice and erred in law and on facts. The Tribunal considered these grounds and found merit in the Assessee's arguments, leading to the allowance of the appeal for statistical purposes.

4. Condonation of delay: The Tribunal, after considering the explanations provided by the Assessee regarding the delay in filing the appeal, concluded that the delay was due to bona fide reasons and mistakes. The Tribunal, in the interest of justice, decided to condone the delay and proceed with the appeal on its merits.

5. Merits of the case and restoration: The Tribunal, after reviewing the facts and circumstances of the case, found that the Assessee had a genuine case on merits, especially considering the subsequent approval of registration under Section 12AA of the Act. Therefore, the matter was remanded to the file of CIT(Exemptions) for a fresh consideration of the application, ensuring compliance with the legal provisions.

In conclusion, the Tribunal allowed the appeal of the Assessee for statistical purposes, condoning the delay in filing the appeal and directing a reevaluation of the registration application under Section 12AA of the Income Tax Act, 1961.

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