12AB rejection remanded and delay condoned due to counsel’s difficulty and lack of effective notice
Issue
Condonation of Delay: Whether a delay of 111 days in filing an appeal can be condoned when caused by the previous counsel’s personal difficulty (mother’s chemotherapy) and the assessee’s lack of knowledge of the order.
Natural Justice: Whether an ex-parte rejection of Section 12AB registration is valid when notices were merely uploaded to the e-filing portal without effective service or email intimation.
Facts
Registration Application: The Appellant (Ell Aar Memorial Educational Trust) filed Form 10AB on 12.07.2022 for final registration under Section 12AB.
Unanswered Notices: The CIT(Exemptions) issued notices/questionnaires on the e-filing portal in September and November 2022. The Trust did not respond, alleging they received no email intimations and were unaware of the notices.
Ex-Parte Rejection: Consequently, the CIT(E) passed an ex-parte order on 09.01.2023 rejecting the registration due to non-compliance.
Discovery of Order: The Trust claimed they only discovered the rejection during assessment proceedings for AY 2023-24 (Assessment Order passed on 25.02.2025).
Reason for Delay: The appeal was filed with a delay of 111 days. The Trust attributed this to:
A bona fide belief that they were registered.
Lack of proper guidance from their previous counsel, whose mother was undergoing chemotherapy during the relevant period.
New counsel was engaged only in August 2025.
Decision
Delay Condoned: The Tribunal accepted the reasons furnished (counsel’s family medical emergency and lack of knowledge) as “reasonable and sufficient cause.”
Justice over Technicality: Citing the spirit of Section 253(5), the bench held that substantial justice should prevail over technical defects, and admitted the appeal.
Violation of Natural Justice: The Tribunal observed that the application was rejected solely for non-compliance with portal notices, without an effective hearing.
Matter Remanded: Applying the principle of audi alteram partem, the Tribunal set aside the CIT(E)’s order and restored the matter to the CIT(E) for fresh adjudication.
Direction: The CIT(E) was directed to decide the matter strictly in accordance with the law after providing a proper opportunity for the assessee to be heard and submit documents.
Key Takeaways
Humanitarian Grounds for Delay: Tribunals often take a lenient view on limitation periods when the delay is caused by genuine human difficulties, such as the serious illness of a counsel or their immediate family.
Portal Upload vs. Effective Service: While the portal is the primary mode of communication, the Tribunal recognized that deciding a matter ex-parte solely because an assessee missed a portal notice (without email triggers) violates the principles of natural justice.
Merit-Based Adjudication: In matters affecting the charitable status of a trust (Section 12AB), appellate authorities prefer the case to be decided on its merits rather than being dismissed on technical non-compliance.
THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH
Ell Aar Memorial Educational Trust
VS
CIT(Exemption)
Chandigarh
Source :- 1764566270-9Gbyek-1-TO