AMRELI MODH VANIK COMMUNITY PROPERTY,AMRELI V. THE PR. CIT(EXEMPTION), AHMEDABAD, AHMEDABAD

ITA 360/RJT/2024

AI Insights

The case involves the Amreli Modh Vanik Community Property, a trust that sought registration under Section 12A of the Income-tax Act, 1961, which was initially denied by the Principal Commissioner of Income-tax (Exemption), Ahmedabad. The denial was based on the grounds that the trust's activities and expenditures did not align with its stated objectives, and the trust failed to provide sufficient documentary evidence to prove the genuineness of its activities. The Tribunal, however, noted that the trust was established before the Income Tax Act came into existence and thus should not be subjected to the provisions of Section 13(1)(b) of the Act, leading to the decision to allow the appeal for statistical purposes and remand the matter back to the CIT(E) for a detailed examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 781709 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2024-2025
• Appeal Filed On: 21-05-2024
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY PUNGLIA
• Assessee Lawyers: MEHUL RANPURA; LD
• Keywords: Opportunity of being heard; Corroborative evidences; Charitable institution; Non compliance
• Section: 12AA; 10B

Judgement Text

"आयकर अपीलȣय अͬधकरण, राजकोट Ûयायपीठ, राजकोट। IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकर अपील सं. / ITA No.360/RJT/2024 Ǔनधा[रण वष[ / Assessment Year: 2024-25 Amreli Modh Vanik Community Property Nr. Rajkamal Chowk, Amreli- 365 601 बनाम /Vs. Principal Commissioner of Income-tax(Exemption), Ahmedabad, Room No.609, 6th Floor, Ayakar Bhawan (Vejalpur), Nr. Sacin Tower 100 FT Road, Anandnagar Prahladnagar Road, Ahmedabad-3800 015 èथायीलेखासं /.जीआइआरसं . / PAN/GIR No.: AAGTA 8104 R (अपीलाथê/Appellant) : (ÿÂयथê/Respondent) Ǔनधा[ǐरती कȧ ओर से/Assessee by : Shri Mehul Ranpura, ld.AR राजèव कȧ ओर से/Revenue by : Shri Sanjay Punglia CIT-DR सुनवाई कȧ तारȣख /Date of Hearing : 31/07/2025 घोषणा कȧ तारȣख /Date of Pronouncement : 29/09/2025 आदेश / O R D E R Per, Dr. Arjun Lal Saini, Accountant Member: Captioned appeal filed by the assessee, is directed against the order passed by the Learned Principal Commissioner of Income-tax(Exemption), Ahmedabad [in short, ‘Ld.CIT(E)’] wherein Ld. CIT(E) has rejected the assessee’s application in Form 10AB under section 12A(1)(ac)(iii) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) and also cancelled the provisional registration Section 80G(5) of the Act. Printed from counselvise.com ITA No.360/RJT/2024 Amreli Modh Vanik Community Property 2 2. The assessee has raised the following grounds of appeal: “1. The grounds of appeal mentioned hereunder are without prejudice to one another. 2.The order passed by the learned Commissioner of Income-tax (Exemption), Ahmedabad [hereinafter referred to as the “CIT(E)”] u/s 12AA of the Income Tax Act, 1961 is bad in law and on facts. 3.The learned CIT(E) erred on facts as also in law rejecting the application for registration u/ 12AA of the Act alleging that (i) the appellant failed to prove the genuineness of its activities with documentary evidence (ii) the activities of trust are in consonance with the objects of the trust and (iii) other laws material for the purpose of achieving objects are complied with. The learned CIT(E) may kindly be directed to grant registration u/s 12AA of the Act. 3. Brief facts qua the issue are that the assessee-trust had filed the application for registration u/s 12AB of the Act. The Ld.CIT(E) after referring the provisions of Section 12A(1)(ac)(iii) and Rule 17A(1) of the Income-tax Rules, 1962 for registration purpose, issued a show cause notice to the assessee. In the show cause notice, the Ld. CIT(E) explained the provisions of Section 12AB(1) of the Act and stated assessee-trust was established for the purpose of a particular community and caste, that is, “Amreli modh Vanik Community” and the applicant was requested to submit certain details/documents vide notice dated 09.11.2023 and 08.12.2023. In response to the said notices, the applicant has submitted certain details/documents on 20.01.2024. On perusal of the details/documents received, it was noticed by ld.PCIT that the activities carried out by the applicant-trust and the expenditure reported in the annual audited accounts are not in consonance with each other and objects/objectives of trust. Further, on perusal of objects/objectives of the applicant/assessee, as stipulated in the PTR, it was observed that the objectives/ objects of the applicant/assessee are for the benefit of a private religious community or caste i.e. “Amreli modh Vanik Community”. The applicant vide its response dated 20.01.2024 has submitted part details before ld CIT(E ). In view of the above, a show cause notice was issued to the applicant on 15.03.2024, which is reproduced below: Printed from counselvise.com ITA No.360/RJT/2024 Amreli Modh Vanik Community Property 3 “Please refer to the online application, in Form No.10AB, filed by you are the subsequent questionnaires dated 09.11.2023 and 08.12.2023 issued to you. In the aforesaid notice/letter certain details/information/clarifications were sought for and in response to the same, you have submitted certain details vide your reply dated 20.01.2024 and did not furnish following details/documents as under: 1. Details of top 5 items each, of donation received (giving name & address of donor, amount donated & mode of donation) and expenditure related to the specific object of the trust along with supporting evidence in preceding 3 years and current year. 2. Provide ledger account of all the Expenditure towards charitable and religious objects in preceding 3 years including current year (F.Y 2023-24) 2. Further on perusal of your point-wise reply dated 31.12.2023, you have submitted following details/reply in the first para as under: Activity report describing all the details is attached herewith for your ready reference. The trust is engaged into activities of organizing and running seminar for awareness and development of public in general for their economic growth, and providing them with basic necessities to become independent. However, on perusal of the PTR the object of the trust is “There is not trust for caste dinner”. Hence, from the above it is evident that the activities undertaken by you, which are charitable in nature, are not in accordance with the object of the trust. From the above, it is observed that the above referred object (as per PTR) appear to be charitable in nature and for the benefit of a particular religious community/caste i.e. “Amreli modh Vanik Community” and not for the benefit of public at large. Therefore, please clarify that as to how there is no contravention of provision of section 13(1)(b) of the Act. 3. Hence, you are requested to show cause as to why your application filed in Form 10AB u/s 12A(1)(ac)(iii) should not be rejected and also your provisional registration should not be cancelled for the reasons discussed in the notice. You are once again requested to submit the details/documents/clarification a sought above on or before 19.03.2024. 4. Further, you are requested to note that in case of non compliance/part compliance of said notice, the mater will be decided on the basis of facts/material available on record. “Please note that this is a final opportunity and no requests for adjournment will be entertained.” Printed from counselvise.com ITA No.360/RJT/2024 Amreli Modh Vanik Community Property 4 4. In response to the above notice issued by Ld. CIT(E), the assessee submitted its reply before Ld.CIT(E) which is placed at paper book page No. 13, however, Ld. CIT(E) did not consider assessee`s reply and mentioned in his order that assessee-trust has never submitted any reply, however, reply was filed by the assessee- trust along with documentary evidences. 5. Finally, the Ld. CIT(E) rejected assessee’s application stating that applicant has not furnished any details/explanation in response to the notice dated 15.03.2024 and on perusal of the audited accounts for F.Y 2021-22, it is observed that the applicant has incurred expenditure towards Religious activity i.e. Patotsav and Baldevji utsav of Rs.56,294/-. The ld.CIT(E ) also noted that object stipulated in the PTR is not clear and no other object is mentioned in said PTR, so genuineness of objects as well as activities could not be ascertained due to ambiguous object of the Trust. In view of the above, the assessee`s application in Form No.10AB u/s 12A(1)(ac)(iii) of the Act was rejected by ld.CIT( E). 6. Aggrieved by the order of Ld. CIT(E), the assessee is in appeal before us. 7. Shri Mehul Ranpura, Learned Counsel for the assessee, took us through object clause of the assessee-trust, which is mentioned in the application in Form-10AB, which is placed in paper book pages 13 and 14. During the proceedings before Ld.CIT(E), assessee submitted detailed reply, point-wise which are reproduced below: Sr. No. Particulars Remarks 1 Submit a detailed note on the nature of activities undertaken in last 3 years and proposed to be undertaken in future (Not more than 500 words). You can also attach necessary evidence in your support, if any. Activity report describing all the details is attached herewith for your ready reference. The trust is engaged into activities of organizing and running seminar for awareness and development of public in general for their economic growth, and providing them with basic necessities to become independent. 2 State the date of commencement of your activities along with evidence, if any The trust is registered on 17/03/1963, and since then the trust is carrying on charitable activities according to the PTR. Printed from counselvise.com ITA No.360/RJT/2024 Amreli Modh Vanik Community Property 5 3 Self-certified copy of trust deed/Memorandum & Articles of Association(MoA/AoA) in English, if original trust deed is not in English. The PTR is itself in English which is attached herewith for your ready reference. 4 Please furnish audit reports of last 3 years (F.Ys 2019- 20, 2020-21 & 2021-22) and provisional accounts of current year, if not already attached with Form-10AB filed by you. Audit reports of last 3 years are already attached with the application (AY 20-21, 21-22 & 22-23). Also audit report for AY 2023-24 attached herewith. 4A Furnish copy of Form No.9A, 10, 10B wherever applicable during last 3 years. Necessary documents have been filed in the Income Tax Portal 4B Furnish details of top 5 items each, of donation received (giving name & address of donor, amount donated & mode of donation) and expenditure related to the specific object of the trust along with supporting evidence in preceding 3 yeas and current year. Details of donation received to carry out objectives as per the deed is attached herewith. 5 Submit copy of all Form No.10AC issued to you. Copy of Form 10AC issued is attached herewith. 5A Has any registration been granted to you prior to 01.04.2021, if yes furnish copy of registration certificate issued. No. prior to 0104.2021 there were no registrations granted. 5B Has any certificate for registration granted to you earlier been withdrawn/cancelled. If yes furnish details. No. The registration was never granted earlier to 01.04.2021 5C Is there any modification of the objects in Trust deed after 01.04.2021/date of registration, whichever is later, if yes furnish details. No. There are no modification in the objects of the trust. 6 Specify the clause in Trust deed/MoA regarding irrevocability//distribution of funds/assets in the case of dissolution. In case there is no such clause explain why your application should not be rejected All provisions of the Bombay Public Trust Act 1950 will be applicable, and also separate undertaking of the same is attached herewith for your ready reference. 7 Furnish statements f all bank accounts held by you along with bank book for the last two years Copy of bank accounts is attached herewith for your ready reference 8 Have you made any violations of conditions specified under section 12AB(4) explanation, clause(a) to clause(e), 13(1) clause(a) to (c), 1st proviso to section 2(15) or any action has been taken in your case by the Department for any default under these provisions or any action has been taken for any other law in force. If yes, furnish necessary details. No. No such violation of any kind has been made. 9 Has any demand been raised by the Department in your case in preceding 3 years, if yes, furnish the copy of order. No. There are no such instances. 10 State as to whether the objects are for any particular caste, creed and religious community. Provisions of section 13(1)((b) will not be applicable due to the reasons and brief notes mentioned in Annexure A mentioned at the end of this reply. 11 Submit proof of identity of the main/managing Trustees/Directors/President/Secretary of the Trust/Society/Non Profit Company (as the case may be). Proof of all trustee’s and managing trustee is already submitted along with the application. The same is also attached herewith for your ready reference. 12 Has any action has been taken against any the member/office bearer/trustee/beneficial owner/directors of entity for anti national activity/terrorist activities. If yes, furnish details. There are no such instances w.r.t. antinational activities/terrorist activities against trust or any of the trustees are noticed. Hence no such action has ever been taken against any member/office bearer/beneficial owner/trustee 13 Provide ledger account of all the expenditure towards charitable and religious objects in preceding 3 years including current year The ledger of the same is attached herewith for your ready reference. 14 Please furnish lease agreement or any other document evidencing the existence of the trust at above stated address. The property is duly registered in the PTR submitted and light bill for the same is also attached herewith for your ready reference. 15 Furnish provide address of immovable properties held by you. 241, Bus Stand Chowk, Talu9ka-Village-District Amreli (cop of light bill is attached herewith for your ready reference. 16 Furnish undertakings in given pro forma as per Annexure-1. Undertaking for sections 11(5), 11 AND 12, 2(15), and the fact that all provisions of The Bombay Public Trust Act and the Income Tax Act applies to the Trust is attached herewith. Printed from counselvise.com ITA No.360/RJT/2024 Amreli Modh Vanik Community Property 6 17 In case, trust/institution runs any Education Institute/hospital/old age home/orphanage/centre for disabled/centre for women & children etc. the furnish permission/approval from concerned authorities for running the same. No applicable. 8. The Ld. Counsel further submitted that trust under consideration was registered on 19.05.1952 with Charity Commissioner Bombay vide entry in PTR No.2791/52 dated 30.05.1953. Therefore, Ld. Counsel contended that since the trust was created before 01.04.1961, when the Income Tax Act, 1961 came into existence and assessee-trust was created prior to the Income Tax Act, 1961 therefore, the provision of Section 13(1)(b) of the Act, is not applicable to the assessee-trust. For that Ld. Counsel took us through the page-16 of paper book wherein registration certificate issued by Charity Commissioner Bombay is placed in the paper book pages 18, 19 and 22. The Ld. Counsel also submitted the undertaking made by the trustee, which is placed in the paper book. The Ld. Counsel also submitted the activities done by the assessee-trust is placed at pages 112, 132 of the paper book. The Ld. Counsel also submitted that based on the same objects and activities, the trust registration was granted earlier by the Ld.CIT(E), to the assessee-trust. 9. On the other hand, Ld. CIT-DR for the Revenue submitted that assessee has failed to prove the genuineness of the objects and activities. The activities caried on by the assessee are not in consonance with the objects of the trust. The objects of the trust has not been fled before Ld. CIT(E). Therefore issue should be remitted back to the file of Ld.CIT(E) to examine these facts. 10. In rejoinder, Ld. Counsel submitted that in PTR the objects are mentioned and the PTR was submitted before Ld.CIT(E). Therefore, registration should be granted. Printed from counselvise.com ITA No.360/RJT/2024 Amreli Modh Vanik Community Property 7 11. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld PCIT and other materials brought on record. We note that application for registration of trust was made on 19.04.1952 by Mohanla Odhavji Parikh to Deputy Charity Commissioner-Ahmedabad region in prescribed format in Schedule 2G, as prescribed under the provisions of The Bombay Public Trust Act, 1950. We note that as per prescribed procedure u/s 19 of The Bombay Public Trust Act, 1950, inquiry No.2791/52 on 30.05.1952, was initiated by Deputy Charity Commissioner, the mention of which can be seen in PTR Schedule 2G. On dated 17.03.1963, he passed an order of registration of the trust vide Registration No.A/4/Amreli. On dated 19.04.1952, application to the Deputy Charity Commissioner, details of property which was held under trust is also given, that is, the trust was having trust property as on date of application of the trust, and therefore the trust is already established before making the application, only the registration was on 17.03.1963. We note u/s 13(1)(b) of the Act, income of a charitable trust or institution created or established on or after 01.04.1962, for the benefit of any particular religious community or caste, other than scheduled castes, backward classes, scheduled tribes or women and children, is not entitled for exemption. As the bar u/s 13(1)(b) is applicable only to those charitable trusts and organisations which have been created on or after 01.04.1962, therefore the trust which were in existence on 01.04.1962 will not lose exemption by invoking provisions of section 13(1)(b) of the Act. Therefore, we direct the learned CIT(E ) to examine the PTR, objects of the trust and other documents and evidences, and grant the registration as per the provisions of the Act. It is needless to say that the assessee will be at liberty to adduce any evidences as deemed relevant before the Ld.CIT(E ) at the time of proceedings before him, in consequence to this Printed from counselvise.com ITA No.360/RJT/2024 Amreli Modh Vanik Community Property 8 order and the ld CIT(E ) shall allow the assessee adequate opportunity of being heard and to make relevant submissions, and then pass a speaking order which is fair and judicious. 12. In the result, the appeal of the assessee is allowed for statistical purposes. Order is pronounced in the open court on 29/09 /2025 Sd/- Sd/- (DINESH MOHAN SINHA) JUDICIAL MEMBER (DR. ARJUN LAL SAINI) ACCOUNTANT MEMBER राजकोट /Rajkot िदनांक/ Date: 29/09/2025 Dkp Outsourcing Sr.P.S आदेश कì ÿितिलिप अúेिषत/ Copy of the order forwarded to :  अपीलाथê/ The Assessee  ÿÂयथê/ The Respondent  आयकर आयुĉ/ CIT  आयकर आयुĉ(अपील)/ The CIT(A)/(NFAC), Delhi.  िवभागीय ÿितिनिध, आयकर अपीलीय आिधकरण, राजकोट/ DR, ITAT, RAJKOT  गाडªफाईल/ Guard File By order/आदेशसे , /T Assistant Registrar/Sr. PS/PS ITAT, Rajkot Printed from counselvise.com "