ITAT Condones 164-Day Delay, Grants Assessee Another Chance for Registration u/s 12AB [Read Order]

The Income Tax Appellate Tribunal (ITAT) Jaipur Bench has condoned a 164-day delay in filing appeals and remanded the case back to the Commissioner of Income Tax (Exemption) CIT(E), Jaipur, allowing the assessee another opportunity to seek registration under Section 12AB of the Income Tax Act, 1961. The tribunal held that the delay was due to confusion regarding legal procedures and should not prevent the assessee from presenting its case.

Shri OP Dargar Foundation, a Section 8 company, which had applied for registration under Section 12AB and approval under Section 80G of the Income Tax Act, 1961. The CIT(E), Jaipur, rejected the applications and also canceled the provisional registration and approval, prompting the assessee to file four appeals before the ITAT Jaipur Bench. The appeals challenged the rejection of registration under Section 12AB and approval under Section 80G, as well as the cancellation of provisional registration and approval.

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The assessee filed the appeals 164 days late, citing confusion regarding changes in trust-related laws and uncertainty over whether to reapply or appeal. The assessee submitted that after seeking legal advice, it decided to appeal before the ITAT. The delay was attributed to uncertainty about the legal remedy, and the assessee requested condonation of the delay, submitting an affidavit in support of its claim.

During the hearing, the Departmental Representative (DR) objected to condonation, arguing that the appeals were filed beyond the allowed time limit. However, the ITAT accepted the assessee's explanation and held that since the delay was not deliberate and the assessee would not gain any undue benefit, it should be condoned. The tribunal cited the Supreme Court ruling in Collector, Land Acquisition v. Mst. Katiji & Others , which emphasized a liberal approach in condoning delays when a party is prevented by sufficient cause.

The CIT(E) had rejected the assessee’s application for registration under Section 12AB on three main grounds:

1. The application in Form 10AB was incomplete.
2. The assessee had not provided proof of registration under the Rajasthan Public Trust (RPT) Act, 1959.
3. The genuineness of the assessee’s charitable activities could not be verified due to non-compliance with notices.

The ITAT noted that the assessee had applied for registration under the RPT Act, and the matter was pending with the state authorities. The tribunal observed that failure to submit registration proof was a curable defect and should not be the sole ground for rejection. It also found that the assessee had not furnished the latest audited balance sheet, but this was due to procedural delays rather than a lack of compliance.

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The ruling was delivered by Suchitra Kamble (Judicial Member). The tribunal held that the assessee should be given another opportunity to present its case before the CIT(E). It directed the CIT(E) to reconsider the application after allowing the assessee a fair chance to submit the required documents and prove the genuineness of its activities.

The ITAT Jaipur Bench condoned the 164-day delay and sent the matter back to the CIT(E) for fresh adjudication. The tribunal ruled that procedural lapses should not prevent genuine applicants from obtaining registration under Section 12AB. It emphasized that charitable organizations must be given a fair opportunity to comply with legal requirements and justify their activities.

To Read the full text of the Order CLICK HERE

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