Case Law Details
Bai Ruxmani Vs CIT (ITAT Ahmedabad)
In the case of Bai Ruxmani v. CIT (ITAT Ahmedabad), the Income Tax Appellate Tribunal (ITAT) remanded the case back to the Commissioner of Income Tax (Exemption) (CIT(E)) for re-examination. The appeal was filed against an order dated September 18, 2023, under Section 12A(1)(ac) of the Income Tax Act, which had rejected the approval for the assessee’s charitable trust application. The issue arose from the fact that the notice for the hearing, issued on September 12, 2023, gave the assessee only two working days to appear, which was considered insufficient and against the principles of natural justice. The assessee had argued that the short notice hindered their ability to respond properly.
The ITAT reviewed the appeal and found that the time given to the assessee to comply was inadequate. Acknowledging the argument on the insufficient hearing notice, the ITAT pointed out that the notice should have provided more time, in line with the binding Circular from the Central Board of Direct Taxes (CBDT) dated November 19, 2020, which mandates a 15-day notice. In response, the ITAT decided to remand the case back to the CIT(E) for a fresh hearing, providing the assessee with a fair opportunity. The CIT(E) was directed to pass a new order within 50 days of receiving the remand order, ensuring proper notice and compliance with the law. The delay in filing the appeal was condoned, as the assessee reasonably explained the cause.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
Present appeal has been filed by the assessee against order passed by the ld. Commissioner of Income Tax (Exemption), Ahmedabad [hereinafter referred to as “Ld.CIT(“E”] dated 18.9.2023 passed under section 12(A)(1)(ac) of the Income Tax Act, 1961 [hereinafter referred to as “the Act” for short].
2. Adjournment application filed by the assessee is hereby rejected.
3. At the outset, it is noticed that the Registry has notified that the appeal of the assessee is time barred by 90 days. To explain the delay, the assessee has filed an application for condonation of delay supported by an affidavit pleading interalia that Shri Vijay Babnsilal Patwa, Managing Trustee, who was looking after the accounts and other related matters died on 29th January, 2023 and his email.id to which the notices were being sent, was not traceable; that the passing of the impugned order by the ld.CIT(E) came to the notice of the assessee only later on, and therefore, the impugned delay of 90 days has occurred. It is therefore prayed that as the delay not being intentional, deliberate and beyond the control of the assessee, and the assessee is being a charitable institution, the delay of 90 days in filing appeal before the Tribunal may be condoned.
4. We have gone through the contents of the application for condonation of delay in filing appeal before the Tribunal. The assessee-trust has reasonably explained the reason for the delay in filing present appeal before the Tribunal. We are of the view that no prejudice will be caused to the Revenue if the delay is condoned and the matter is taken up for adjudication on merit.
5. In the appeal, the assessee has taken the following grounds:
The Comm. of Income-tax (H) has erred both in law and in facts in passing Order dated 18-9-2023 rejecting/cancellation of approval U/S.12A in respect of Form No.lOAB filed by your Appellant on the above Order is after giving short notice of I learing and not following binding Circular Central Board of Direct Taxes dated 19-11-2020 whereby Notice of 15 days is required to be given. In this case particularly the last Notice which was dated 12-9-2023 fixing the Hearing on 15-9-2023 was only giving two working days which is against principle of natural justice and therefore the order under Appeal be set aside as held in case of Chaitanya Goshala Trust vs. CIT reported in (2024) 109 1TR (Trib)(S.N.) 54 (Pune)
6. As the facts reveal from the order of the ld.CIT(E) that the assessee is a public charitable trust duly registered under the Bombay Public Charitable Trust Act, 1950 w.e.f 27.5.2021. With reference to the application filed by the assessee in form No.10AB, the ld.CIT(E) issued notices to the assessee to file submissions vide notices dated 22.7.2023 and 22.8.2023. Another notice has been issued on 12.9.2023 fixing the hearing on 15.9.2023. Since the assessee did not appear for hearing, the ld.CIT(E) passed the order rejecting the application of the assessee on 18.9.2023.
7. Before us, the assessee has taken a ground that the assessee has got only two days’ working day to appear before the ld. Commissioner which is very less and was against the principles of natural justice.
8. We have gone through the entire record placed before us, and we find that the time given to the assessee by the notice dated 12.9.2023 to appear on 15.9.2023 was too less for compliance. The ld.DR fairly accepted the proposition that no prejudice will be caused to the Revenue if the assessee is given an opportunity of hearing before the ld.CIT(E). Hence, the matter is remanded back to the file of the ld.CIT(E) to re-examine the issue and pass a fresh order within a period of 50 days from the date of receipt of this order, after giving due opportunity of hearing to the assessee in accordance with law.
9. In the result, the appeal of the assessee is allowed for statistical purpose.
Copy of this order be given to the assessee. The Registry is directed to dispatch as per procedure.
Order pronounced in the Court on 5TH November, 2024 at Ahmedabad.
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