Facts of the Case

The assessee, Shishu Niketan Trust, Jamshedpur, filed an appeal against the order dated 20.12.2024 passed by the Commissioner of Income Tax (Exemption), Patna denying recognition under Section 80G of the Income-tax Act, 1961. The denial was based on delay in submitting compliance to notices issued by the CIT (Exemption). The assessee subsequently complied with the notices, though belatedly, and approached the Tribunal seeking restoration of the matter for fresh consideration.

Issues Involved

Whether denial of recognition under Section 80G solely on account of belated compliance was justified, whether the assessee deserved an opportunity to substantiate its claim, and whether the matter required restoration for fresh adjudication in the interest of justice.

Petitioner’s Arguments

The assessee submitted that the delay in compliance with notices issued by the CIT (Exemption) was not intentional. It was contended that the assessee had since complied with the requirements and prayed that the matter be restored to the file of the CIT (Exemption) to enable proper adjudication of its application for recognition under Section 80G.

Respondent’s Arguments

The Revenue did not raise any serious objection to the request made by the assessee for restoration of the matter.

Court Order / Findings

The ITAT Ranchi observed that the assessee had complied with the notices issued by the CIT (Exemption), albeit belatedly. Considering the nature of the issue and in the interest of justice, the Tribunal held that the matter deserved to be restored to the file of the CIT (Exemption) for fresh adjudication after granting the assessee adequate opportunity to substantiate its claim for recognition under Section 80G. The Tribunal also noted that there was a delay of 22 days in filing the appeal, which was condoned after considering the reasons furnished by the assessee.

Important Clarification

The Tribunal clarified that applications for recognition under Section 80G should not be rejected solely on technical grounds such as delay in compliance, particularly where the assessee demonstrates willingness to comply and substantiate its eligibility. Principles of natural justice require that a reasonable opportunity be afforded before denying statutory benefits.

Final Outcome

The appeal filed by the assessee was partly allowed for statistical purposes. The delay in filing the appeal was condoned, and the matter was restored to the file of the Commissioner of Income Tax (Exemption), Patna for fresh adjudication in accordance with law after granting adequate opportunity of hearing to the assessee.

Link to Download Order- https://www.mytaxexpert.co.in/uploads/1769080635_SHISHUNIKETANTRUSTJAMSHEDPURVS.COMMISSIONEROFINCOMETAXEXEMPTIONPATNAPATNA.pdf

 

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