Benefits of Exemption of Income Tax to Charitable Organization cannot be Deprived due to Technical Lapses: ITAT Condones Delay of 1098 Days [Read Order]

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) held that a charitable organization should not be deprived of the benefit of exemption available to it under Section 11 of the Income Tax Act, 1961 merely on the technical lapses and thus ordered for de-novo adjudication.

The assessee, Bhutakia Bhimasar Jain SwetamberMurtipujakSnagh, was denied the benefit of Exemption under Section 11 of the Income Tax Act in the assessment framed under Section143(3) of the Income Tax Act by the Assessing Officer, on account of non-availability of registration for the A.Y. 2018-19.

Aggrieved by the order, the assessee filed an appeal before the CIT(A), which rejected the application for grant of approval of registration under Section 12AA of the Income Tax Act on the ground that the applicant failed to file documentary evidences to satisfy about the genuineness of activities.

The assessee filed an appeal before the ITAT by a delay of 1098 days and submitted that the assessee is located in remote area where the advice from the tax practitioner was not available and beside that the trustees of the assessee were not aware of English language.

The Authorised Representative contended that the case of the assessee on merit is quite strong in its favour as the registration application for the subsequent year registration under Section 12AA of the Income Tax Act and such a meritorious case should not be dismissed on account of technical lapses.

The Departmental Representative contended that the application for registration under Section 12AA of the Income Tax Act, was rejected on account of non-submission of the relevant documents by the CIT(A) and further opposed for the condonation of delay as there was in-ordinate delay in filing the appeal by the assessee.

The Two Bench members comprising of Waseem Ahmed, Accountant Member and T.R. Senthil Kumar, Judicial Member observed that there was an inordinate delay in filing the appeal by the assessee but considering the merit of the case the delay is condoned.

Further, the Bench noted that the income of the assessee should not be over assessed even there is a mistake on the part of the assessee. As such the legitimate deduction/ exemption for which the assessee is entitled should be allowed while determining the taxable income.

Thus, the assessee being a charitable organization should not be deprived of the benefit of exemption available to it under Section 11 of the Income Tax Act, merely on the technical lapses, and hence, the Tribunal has set aside the order of CIT(A) in rejecting the registration application made under Section 12AA of the Income Tax Act and ordered for a new adjudication.

To Read the full text of the Order CLICK HERE

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