Parevartan Educare Foundation vs ACIT Exemption Denial – Case Number ITA 1057/DEL/2022

Case Overview:

The case of Parevartan Educare Foundation vs. Assistant Commissioner of Income Tax (ACIT) Exemption Circle, Ghaziabad, marked by the case number ITA 1057/DEL/2022, revolves around the dispute concerning the denial of exemption claims by the assessee for the assessment year 2017-18. The appellant, Parevartan Educare Foundation, based in Ghaziabad, Uttar Pradesh, engaged in educational activities, filed an appeal against the order of the National Faceless Appeal Center (NFAC) dated 14/03/2022. This pivotal legal battle highlights the critical nature of adhering to procedural requirements under the Income Tax Act, 1961, and the ramifications of failing to meet these mandates.

The core contention of the appeal was the assessing officer’s decision to deny exemptions under sections 11 and 12 of the Income Tax Act, on the grounds of not filing Form 10B within the prescribed due date. The denial led to a significant addition of over Rs. 75 lakhs to the assessee’s income, previously declared as nil. The appellant contended that the delay in filing Form 10B had been condoned by the Commissioner of Income Tax (Exemption), Lucknow, a fact allegedly overlooked by the assessing authorities. As the dispute unfolded, it underscored the complexities and challenges entities face in navigating the bureaucratic intricacies of tax exemptions.

Legal Proceedings:

The legal journey of this case through the income tax appellate system sheds light on the procedural hurdles and the necessity for rigorous documentation. The first point of contention was the jurisdictional error and oversight in recognizing the condonation of the delay by CIT (Exemption), Lucknow. The appellant argued that their failure to present the order of condonation before the CIT(A) was due to not receiving any notice of hearing, either in physical form or through electronic means.

The tribunal, examining the merits of the case, noted the pivotal issue of procedural lapses and the absence of a fair hearing opportunity for the assessee. Recognizing the necessity for justice and procedural fairness, the tribunal afforded the appellant another chance to substantiate their claims, directing a de novo consideration by the CIT(A). This approach by the tribunal not only highlights the importance of due process in judicial proceedings but also emphasizes the significance of rectifying inadvertent errors in the pursuit of substantive justice.

Conclusion and Implications:

The tribunal’s decision to partly allow the appeal for statistical purposes, remanding the matter to the file of the CIT(A) for fresh examination, serves as a critical reminder of the legal maxim that justice not only needs to be done but seen to be done. This case delineates the fine balance between strict adherence to procedural statutes and the allowance for condonation in genuine cases of delay. For educational institutions and other entities seeking tax exemptions, this judgment underscores the imperative of timely compliance with statutory requirements and the potential for relief through judicial remedy.

While the tribunal’s decision opens a pathway for Parevartan Educare Foundation to re-argue their case, it also sets a precedent for similar disputes, highlighting the importance of procedural correctness and the safeguards within the legal system to correct genuine oversights. As such, this case not only addresses the immediate issue at hand but also contributes to the broader discourse on tax law and administrative fairness.

Parevartan Educare Foundation vs ACIT Exemption Denial – Case Number ITA 1057/DEL/2022