ITAT Condones Delay Caused Due to a Bona Fide Belief of Charitable Trust

The Income Tax Appellate Tribunal (ITAT), Chandigarh, gave relief to a Charitable Trust, which was unaware of the rejection order of CIT(E) regarding the Registration under Section 12AB of the Income Tax Act, 1961.

The assessee, Ell Aar Memorial Educational Trust, was in a bona fide belief that it had a valid registration under section 12AB, but in reality, it did not have one. The Trust applied to get a Final Registration under Section 12AB of the Income Tax Act, 1961. The CIT(E) issued several notices to the assessee regarding the registration on the e-filing portal. However, the assessee was unaware and failed to respond to them as no intimation was given via email. Due to this non-compliance, an ex parte order was issued by the CIT(E).

The assessee came to know about the rejection order when the assessment proceedings for AY 2023-24 mentioned that the trust did not have registration under section 12AB. The assessee filed an appeal before the ITAT, but it was delayed by 111 days because the Trust’s counsel could not give proper advice.

The Tribunal observed that the reason for the delay was sufficient and there was no deliberate intention to disregard the statutory notices. Holding that the substantial justice should prevail over technicalities, the Tribunal condoned the delay.

The assessee argued that the notices were only uploaded on the e-filing portal and were not issued in the manner prescribed under section 282 of the Income Tax Act, 1961. The Trust also contended that its registration application was rejected without giving an opportunity for a hearing, which violates the principle of natural justice.

The Tribunal noted that the application was rejected only because of the non-compliance by the assessee. The Tribunal remits the matter to the CIT(E) for fresh adjudication after giving a proper opportunity for hearing.