The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) denied condoning the 1350-day delay in filing an appeal against the denial of registration under section 12AB of the Income Tax Act, 1961 due to the assessee’s failure to provide a reasonable cause, despite being aware of the registration denial and actively participating in assessment proceedings during the pandemic.
Betalish Dash Hummad Jain Chokhla Punch Sanchalit Keshavlal Maganlal,appellant-assessee,challenged the denial of registration under section 12AB of the Income Tax Act, 1961 (the Act) through an order dated 20.03.2020 issued by the Commissioner of Income Tax (Exemption)[CIT(E)].
A delay of 1350 days was noted in filing the appeal. The assessee explained that after applying for registration under section 12AA on 01/02/2019 and not receiving any communication, they assumed deemed approval and filed their income tax return on 30.09.2019. They later learned the application was rejected on 27.08.2019.
Know How to Investigate Books of Accounts and Other Documents, Click Here
After filing a new application on 02.10.2019, it was again rejected on 20.03.2020, during the COVID-19 outbreak. The assessee’s registration was finally approved under section 12AB on 27.05.2021. The delay in filing the appeal was partly due to the pandemic and a change in the managing committee in March 2023. The assessee requested the delay be condoned, as the trust’s activities were charitable and any further delay would severely impact its operations.
The assessee trust faced a delay of 1350 days in filing the appeal. Out of this, 700 days were excluded as per the Supreme Court’s COVID-19 guidelines. However, during the pandemic, the assessee participated in assessment proceedings in February and August 2021, and an assessment order dated 07-09-2021 denied the trust’s exemption under section 11 and taxed its income.
While the assessee filed a timely appeal against the assessment order on 16-10-2021, it did not challenge the CIT(E)’s order denying registration. When the Commissioner of Income Tax(Appeals)[CIT(A)] dismissed the appeal for non-prosecution in November 2023, the assessee filed the current appeal with a delay of 1350 days.
Know How to Investigate Books of Accounts and Other Documents, Click Here
The two member bench comprising Dr.BRR Kumar(Vice President) and T.R.Senthil Kumar(Judicial Member) found no “reasonable cause” for such a delay, particularly as the assessee had engaged in assessment proceedings and was aware of the denial of registration, which affected its claim for exemption.
The tribunal concluded that the appeal should have been filed within the statutory time limits. The reasons for the delay were rejected, and the appeal was dismissed.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
