Case Law Details
Lothada-Piplana-Padavala Vs (CIT Exemption) (ITAT Rajkot)
The Income Tax Appellate Tribunal (ITAT), Rajkot Bench, has set aside orders from the Commissioner of Income Tax (Exemptions) [CIT(E)], Ahmedabad, concerning the rejection of applications for registration under Section 12AB and approval under Section 80G of the Income Tax Act, 1961. The Tribunal’s decision, issued on June 9, 2025, emphasizes the need for re-adjudication, citing the appellant’s advanced age and lack of familiarity with online tax compliance systems.
Appeals and Grounds for Reconsideration
The appeals, filed by an entity identified as Lothada-Piplana-Padavala, challenged the CIT(E)’s rejection of their application in Form 10AB for approval under Section 12AB on November 4, 2023, and a separate application in Form 10AB for approval under Section 80G(5)(iii) on November 24, 2023.
The primary grounds for appeal in both cases were that the CIT(E) erred in law and on facts by refusing to grant the respective registrations/approvals. As the core issue of rejection for both applications was similar, the Tribunal heard and consolidated both appeals for a combined order.
Condonation of Delay in Filing Appeals
Before addressing the merits, the Tribunal first dealt with the issue of delay in filing both appeals. ITA No. 239/Rjt/2024 was filed 109 days late, and ITA No. 240/Rjt/2024 was delayed by 89 days.
The assessee sought condonation of delay, stating in their application: “I am a senior citizen and less educated and completely unaware about online system of compliance and e-mail tracking and for which I relied upon the accountant who could not timely inform me and has left the job which has resulted into delay in filing appeal before your honors which may please be condoned.” The assessee further affirmed that the delay was “not willful or deliberate” and that the appeal documents were “bonafide.”
The Authorized Representative (AR) for the assessee reiterated these points, emphasizing the assessee’s complete dependence on an uncooperative accountant for online operations, which led to non-compliance with departmental notices. The AR pleaded for an opportunity to present the case before the CIT(E).
The Departmental Representative (DR) relied on the CIT(E)’s order but did not object to the assessee’s prayer for condonation of delay.
The ITAT, acknowledging the reasons provided, imposed a consolidated cost of Rs. 5,000 on the assessee, to be deposited with the Prime Minister’s Relief Fund within ten days. In the interest of justice, the Tribunal condoned the delay and proceeded to hear both appeals on their merits.
Rejection of Section 12AB Application
In ITA No. 239/Rjt/2024, the assessee had electronically filed Form 10AB under Section 12A(1)(ac)(iii) on May 8, 2023. The CIT(E) issued notices on September 30, 2023, and October 11, 2023, via the ITBA portal, requesting details and documents. However, the assessee failed to submit any response or seek adjournment.
Consequently, the CIT(E) rejected the application, citing the assessee’s failure to provide documentary evidence to establish:
- The genuineness of the activities of the trust or institution.
- That the activities were in consonance with the objects of the trust or institution.
- That other material laws for achieving the objects were complied with. Based on these failures, the provisional registration was also cancelled.
The assessee’s AR reiterated before the ITAT that the director of the appellant, being 68 years old, was a senior citizen, less educated, and unaware of online compliance systems, having relied entirely on an accountant who subsequently left the job.
The DR, conversely, argued that the assessee had exhibited a “non-co-operative attitude” by not submitting the required documents.
The ITAT, considering the circumstances and the assessee’s stated reasons for non-compliance, decided to restore the matter back to the file of the CIT(E). The Tribunal directed the CIT(E) for a de-novo adjudication of the application in Form 10AB under Section 12A(1)(ac)(iii). The assessee was also directed to submit all relevant documents and evidence as required by the CIT(E).
Rejection of Section 80G Application
Regarding ITA No. 240/Rjt/2024, which pertained to the rejection of the Section 80G application, the Tribunal noted that the facts and circumstances were similar to the Section 12AB appeal, with the assessee again failing to comply with the notices issued by the department.
Consistent with its decision for the Section 12AB appeal, the ITAT disposed of this appeal in similar terms, effectively remanding it back to the CIT(E) for fresh adjudication.
Overall Outcome
In a combined result, both appeals filed by the assessee in ITA No. 239/Rjt/2024 and 240/Rjt/2024 were allowed for statistical purposes, meaning the matters are sent back for fresh consideration rather than a final decision on the merits by the ITAT. This ruling underscores the Tribunal’s empathetic approach towards taxpayers facing genuine difficulties in navigating digital compliance requirements, particularly senior citizens. The order was pronounced in open court on June 9, 2025.
FULL TEXT OF THE ORDER OF ITAT RAJKOT
Captioned appeal filed by assessee, directed against order passed by Commissioner of Income Tax (E) Ahmedabad, on application in form 10AB u/s 12A (1) (ac) (iii) of the income-tax Act. wherein the application filed by the assessee for approval u/s 12AB of the income-tax Act. was rejected on 04-11-2023 and Application in Form 10AB under 80G (5) (iii) of the income-tax Act. was rejected on 24-11-2023 by Ld.CIT(E) Ahmedabad.
2. GROUNDS OF APPEALS, ITA NO. 239/Rjt/2024: –
1. The grounds of appeal mentioned hereunder are without prejudice to one another.
2. That the learned Commissioner of Income Tax (Exemptions), Ahmedabad has erred in law and on facts in refusing to grant registration u/s 12AB of the Income Tax Act,1961.
3. Your Honor’s appellant craves leave to add, to amend, alter, or withdraw any or more grounds of appeal on or before the hearing of appeal.
GROUNDS OF APPEALS, ITA NO. 240/Rjt/2024: –
1. The grounds of appeal mentioned hereunder are without prejudice to one another.
2. That the learned Commissioner of Income Tax (Exemptions), Ahmedabad has erred in law and on facts in refusing to grant approval u/s 80G of the Income Tax Act,1961.
3. Your Honor’s appellant craves leave to add, to amend, alter, or withdraw any or more grounds of appeal on or before the hearing of appeal.
Since these two appeals filed by the same assessee are directed against the separate order passed by Ld. CIT (E) for different applications. Since the issue of rejection of application are same there for these two appeals have been heard together and consolidated order is being passed for the convenience and brevity.
First we will adjudicate ITA NO. 239/Rjt/2024.
Since both the appeals are filed on 19/04/2024. ITA No. 239/Rjt/2024 late by 109 days and ITA No. 240/Rjt/2024 late by 89 days respectively, That the reason for condonation of delay is same. The relevant para of the application is :
Para No. 5:
“I am a senior citizen and less educated and completely unaware about online system of compliance and e-mail tracking and for which I relied upon the accountant who could not timely inform me and has left the job which has resulted into delay in filing appeal before your honors which may please be condoned.”
Para No. 6:
“That the delay was not willful or deliberate and that the appeal documents are Bonafide. The substantial merits of the case justify condonation of delay.”
The AR submitted that the assessee is senior citizen less educated and completely unaware about the online system of compliance and completely depend on the accountant for computer operation. That the accountants has non co-operated with the assessee. Hence the assessee could not reply to the notices issued by the department and prayed for an opportunity to be given to explain the case before Ld. CIT(E) The delay was not willful or deliberate and that the appeal documents are Bonafide. Substantial merits of the case justify condonation of the delay.”
(i) On the contrary DR submitted and relied on the order of Ld. CIT(E) However Ld. DR has not objected to the prayer of the assessee.
We have heard both the parties and perused all the material available on records. We note that the assessee could not established sufficient course for condonation of delay in filing the appeals. However, we impose a consolidated cost of Rs. 5000/- on the assessee and the same has to be deposited with Prime Minister Relief Fund within 10 days from today. In the interest of justice, we condone the delay in filing of the present appeals and both the appeals are heard on merit.
The brief facts of the case in that ITA no. 239/Rjt/2024 the application was filed electronically on 08/05/2023 in form no. 12AB within the meaning of section 12A(1)(ac)(iii) income-tax of the Act 1961.
The notices was issued to the assessee on 30/09/2023 & 11/10/2023 sent throw ITBA portal to furnish certain details/documents. The assessee has neither filed any submission nor sought any adjournment in this case in the absence of requisite detail, a present case decided on the basis of material available on records. The Ld. CIT(E) rejected the application of the assessee stating that
10. “The applicant/assessee has failed to file documentary evidences to enable me to satisfy about:
i. Genuineness of the activities of the trust or institution.
ii. That the activities of trust or institution are in consonance with the objects of the trust or institution.
iii. That other laws material for the purpose of achieving objects are complied with.
11. In view of the above, the present application filed in Form No. 10AB u/s 12A (1) (ac)(iii) of the Act is rejected and provisional registration is also cancelled.”
Feeling aggrieved by the order of Ld. CIT(E) the assessee has filed an appeal before us.
(i) LD. AR of the assessee filed written submission:
“The director of the appellant is 68 years of age, a senior citizen and less educated and completely unaware about online systems of compliance and e-mail tracking and for which I relied upon the accountant who could not timely inform me and has left the job.
(ii) On the contrary Ld. DR submitted that assessee has not submitted the documents before the authority, the assessee trusts a non-co-operative attitude in compliance with the notice issued by the department.
We have heard both the parties and perused all the material available on records. We note that the Ld.CIT(E) has issued notices on 30/09/2023, 11/10/2023 asking for document in support of the appeal of registration the Act in order to know about the geniuses of the activities of the trust and also to verify the activities are in consonance with the object of the trust and it was also to ensur that purpose of achieving objects are complied with, but the assessee failed to comply with terms of the notice. That the assessee submitted before us. The reasons for non-compliance was that the assessee was compleately unaware about the online system of non-compliance. The Ld. AR of the assessee assured us about compliance to the notices issued by the Ld. CIT(E) considering the facts and circumstance of the case and in the interest of the justice. We restore the matter back with the file of the Ld. CIT(E) for De-novo adjudication of the application in form 10AB section 12A(1)(ac)(iii) of the income-tax Act. Assessee was directed to submitted the relevant document and evidence as required by Ld. CIT(E) if any.
Now coming to ITA No. 240/RJT/2024.
Since the facts circumstance of the case similar and the assessee failed to comply with the terms of notice.
The ITA No. 240/Rjt/2024 is disposed of in the above terms.
In combined result the appeal filed by the assessee in ITA No. 239/Rjt/2024 &240/Rjt/2024 are allowed for statical purpose.
Order pronounced in the open court on 09/06/2025.
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