Visaji Saamnath Deshpande Public Trust Vs CIT (Exemption) (ITAT Pune)
Pune ITAT Upholds Rejection of Section 12A Registration and Cancellation of Provisional 12AB Registration—Trust’s Failure to Respond to CIT(E)’s Notices Proves Fatal
The Pune ITAT upheld the CIT(E)’s order rejecting the trust’s application for regular registration under Section 12A and simultaneously cancelling its existing provisional registration under Section 12AB, since the trust failed to respond to notices and did not place any material even before the Tribunal to justify interference with the CIT(E)’s findings.
The assessee had filed Form 10AB on 20.09.2023 seeking registration under Section 12A(1)(ac). For examining the genuineness of the trust’s activities and compliance with other laws material to achieving its objects, the CIT(E) issued notices seeking information and clarification. After examining the material initially submitted, certain discrepancies were noticed and a specific show-cause notice was issued asking why the application should not be rejected and why the provisional registration should not be cancelled.
Despite the specific show-cause notice, the trust did not furnish any explanation or avail the opportunity of hearing. The CIT(E) therefore concluded that he was unable to arrive at a satisfactory finding regarding the genuineness of the activities or compliance with applicable laws. Consequently, the application for registration was rejected and the provisional registration originally granted on 24.09.2021 was cancelled.
The non-compliance continued even before the ITAT. No one appeared on behalf of the trust on the date of hearing, no adjournment application was filed, and the order sheet showed that there had been no appearance on earlier occasions either. The Tribunal therefore proceeded to decide the appeal on the basis of the material available on record.
The ITAT observed that the CIT(E) had rejected registration because of the assessee’s failure to comply with the notices. Since nothing whatsoever was brought before the Tribunal to enable it to take a view contrary to that of the CIT(E), the Tribunal found no reason to interfere and upheld the rejection of registration as well as cancellation of provisional registration. The appeal was accordingly dismissed.
Interestingly, there was a substantial 644-day delay in filing the appeal before the ITAT, explained on the ground that the CIT(E)’s order had not been received on the assessee’s email. The Tribunal nevertheless adopted a liberal, justice-oriented approach and condoned the entire 644-day delay, relying upon the Supreme Court decisions in Collector, Land Acquisition v. Mst. Katiji, Inder Singh v. State of Madhya Pradesh and Vidya Shankar Jaiswal v. ITO.
Cases Discussed:
- Vidya Shankar Jaiswal vs. ITO (Supreme Court),Special Leave Petition (Civil) Nos.26310-26311/2024 order dated 31.01.2025
- Inder Singh Vs. The State of Madhya Pradesh (Supreme Court),2025 LiveLaw (SC) 339
- Collector, Land Acquisition vs. Mst. Katiji & Ors. (Supreme Court),167 ITR 471 (SC)
FULL TEXT OF THE ORDER OF ITAT PUNE
This appeal filed by the assessee is directed against the order dated 04.03.2024 of the Ld. CIT(Exemption), Pune rejecting the application for grant of registration u/s 12A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
2. None appeared for and / or on behalf of the assessee when the matter was called for hearing on 30.07.2026. No application seeking adjournment of the case has been filed. A perusal of the order sheet entries shows that on previous occasions also, no one was appearing. Under these circumstances, we deem it proper to decide this appeal on the basis of material available on record and after hearing the Ld. DR.
3. There is a delay of 644 days in filing of the appeal before the Tribunal for which the assessee has filed a condonation application along with an affidavit explaining the reasons for such delay which is on account of non-receipt of the order in the e-mail ID of the assessee.
4. We find the Hon’ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. reported in 167 ITR 471 (SC) has held that when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties.
5. We find the Hon’ble Supreme Court in the case of Inder Singh Vs. The State of Madhya Pradesh reported in 2025 LiveLaw (SC) 339 has held as under:
“14. There can be no quarrel on the settled principle of law that delay cannot be condoned without sufficient cause, but a major aspect which has to be kept in mind is that, if in a particular case, the merits have to be examined, it should not be scuttled merely on the basis of limitation.”
6. We find recently the Hon’ble Supreme Court in the case of Vidya Shankar Jaiswal vs. ITO vide Special Leave Petition (Civil) Nos.26310-26311/2024 order dated 31.01.2025 has held that a justice oriented and liberal approach ought to be adopted while considering the aspect of condoning the delay involved in filing of the appeal.
7. Considering the totality of the facts of the case and in the light of the decisions of Hon’ble Supreme Court cited (supra), the delay in filing of the appeal is condoned and the appeal is admitted for adjudication.
8. Facts of the case, in brief, are that the assessee filed an application in Form No.10AB on 20.09.2023 for registration of the trust under section 12A(1)(ac) of the Act. With a view to verify the genuineness of the activities of the assessee and compliance to requirements of any other law for the time being in force by the trust/institution as are material for the purpose of achieving its objects, a notice was issued through ITBA portal on 05.12.2023 requesting the assessee to upload certain information / clarification. The assessee was also requested to submit the compliance by 20.12.2023. On verification of the details submitted by the assessee in response to the said notice and the documents submitted along with the application, various discrepancies were noticed. The assessee was requested to show cause as to why the application for registration u/s 12A should not be rejected and why the provisional registration granted earlier u/s 12AB should not be cancelled. Further, the assessee was specifically informed that in the event of failure to comply by the due date, the application shall be liable to be rejected and the registration shall also be liable to be cancelled.
9. However, the assessee did not make any submission. The Ld. CIT(E) therefore, rejected the application for grant of registration u/s 12A of the Act and also cancelled the provisional registration granted earlier u/s 12AB by observing as under:
“2.3 The assessee was requested to show cause as to why the application should not be rejected and why the registration granted under section 12AB of the Income Tax Act, 1961 should not be cancelled. The assessee was also given opportunity of being heard vide the said notice. The assessee was specifically informed that in the event of failure to comply by the due date, the application shall be liable to be rejected and the registration shall also be liable to be cancelled. The compliance to the said notice was due on 01/03/2024. The notice was duly served on the assessee through e-portal and email. However, the assessee neither submitted explanation to the show cause notice till date nor availed the opportunity of being heard.
3. Since, the assessee has not furnished any explanation to the discrepancies communicated to it, it is presumed that the assessee has nothing to say in the matter.
4. Considering the above facts discussed in the show notice and discrepancies noticed and also that the assessee has not complied with the provisions of section 12AB(1)(b)(i) of the Income Tax Act, 1961 as well as the provisions of Rule 17A(2) of Income Tax Rules, 1962 in spite giving sufficient opportunities, the undersigned is unable to draw any satisfactory conclusion about the genuineness of activities of the assessee and compliance of requirements of any other law for the time being in force by the assessee as are material for the purpose of achieving its objects.
5. In view of the above, the application filed by the assessee is hereby rejected and the provisional registration granted on 24/09/2021 under section 12AB read with section 12A(1)(ac) (vi) of the Income Tax Act, 1961 is hereby cancelled.”
10. Aggrieved with such order of Ld. CIT(E), the assessee is in appeal before the Tribunal.
11. We have heard the Ld. DR and perused the record. We find the Ld. CIT(E) rejected the application filed by the assessee for grant of approval u/s 12A of the Act on the ground that the assessee has not complied with the notices issued by the Ld. CIT(E). Further, since nothing has been brought to our notice, to take a contrary view than the view taken by the Ld. CIT(E), therefore, we uphold the order of the Ld. CIT(E).
12. In the result, the appeal filed by the assessee is dismissed.
Order pronounced in the open Court on 10thAugust, 2026.
