BARFANI SEWA MANDAL,KAITHAL V. COMMISSIONER OF INCOME TAX, EXEMPTIONS , CHANDIGARH, CHANDIGARH

ITA 580/CHANDI/2025

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The case involves Barfani Sewa Mandal, a charitable trust, appealing against the decision of the Commissioner of Income Tax (Exemptions), Chandigarh, which rejected their application for approval under section 12A of the Income Tax Act. The rejection was primarily due to the application being filed under an incorrect clause. The tribunal considered precedents where similar mistakes did not warrant rejection of applications and found that the provisions of section 12AB are benevolent and remedial, thus minor procedural mistakes should not deprive a genuine charitable institution of registration.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 785923 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 21-04-2025
• Other Referred Cases: Imame Rabbani Foundation vs CIT(E), Annanya Education & Charitable Trust vs CIT(E), Shri Swaminarayan Gadi Trust vs CIT(E)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANAV BANSAL; CIR
• Assessee Lawyers: TEJMOHAN SINGH
• Keywords: Charitable institution
• Section: 12A

Judgement Text

"आयकर अपीलȣय अͬधकरण, चÖडीगढ़ Ûयायपीठ, चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, ‘A’, CHANDIGARH BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER & SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 580/CHD/2025 Ǔनधा[रण वष[ / Assessment Year : 2025-26 Barfani Sewa Mandal, C/o Tejmohan Singh, Advocate, 527, Sector 10-D Chandigarh बनाम Vs. The CIT, Exemptions, Chandigarh èथायी लेखा सं./ PAN NO: AAAAB9543J अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent ( PHYSICAL HEARING ) Ǔनधा[ǐरती कȧ ओर से/Assessee by : Sh. Tej Mohan Singh, Advocate राजèव कȧ ओर से/ Revenue by : Sh. Manav Bansal, CIR DR सुनवाई कȧ तारȣख/Date of Hearing : 28.10.2025 उदघोषणा कȧ तारȣख/Date of Pronouncement : 29.10.2025 आदेश/Order Per Laliet Kumar, AM: Appeal in this case has been filed by the assessee against the order dated 12.03.2025 passed by the Ld. Commissioner of Income Tax (Exemptions) [‘CIT(E)’ for A.Y. 2017-18. 2. Grounds of appeal are as under: 1. That the Ld. Commissioner of Income Tax (Exemptions) has erred in law rejecting the Printed from counselvise.com 580-Chd-2025 Barfani Sewa Mandal, Kaithal 2 approval sought under section 12A of the Act holding it to be not maintainable which is arbitrary and unjustified. 2. That the Ld. Commissioner of Income Tax (Exemptions) has erred in law as well as on facts in rejecting the approval sought under section 12A of the Act only on the basis that the application was not filed within the time limit prescribed in respect of application filed under clause (iii) of clause (ac) of sub section (1) of section 12A as the trust had commenced activities on 02.07.1996 which is arbitrary & unjustified. 3. That the Ld. Commissioner of Income Tax (Exemptions) has failed to consider the tenor of Circular 7 dated 25.04.2024 wherein CBDT has in order to mitigate genuine hardships extended the due dates and as such the application for registration ought to have been considered on merits. 4. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 5. That the order of the Ld. Commissioner of Income Tax is erroneous, arbitrary, opposed to law and facts of the case and is, thus, untenable. 3. During the proceedings before us, ld. Counsel for the Assessee submitted that the Ld. CIT(E) Chandigarh Printed from counselvise.com 580-Chd-2025 Barfani Sewa Mandal, Kaithal 3 rejected the application filed by the Assessee in Form 10AB of the Income Tax Act, 1961 (in short 'the Act') on 11.9.2024 merely on the ground that it had been filed under wrong clause - section 12A(1)(ac)(iii) instead of correct clause - section 12A(i)(ac(iv) of the Act. 4. Per contra, Ld. DR relied on the order of the Ld. CIT(A). 5. During rebuttal, the ld. Counsel for the Assessee brought out on record different orders passed by the Coordinate Chandigarh Bench of the ITAT and other authorities on this issue and argued that it has been held in various orders that merely by mentioned wrong sub section of section 12AB should not be sole criteria for rejection an application. 6. We have considered the findings given by the Ld. CIT(E) in her order and we have also considered the arguments and facts brought on record by the ld. Counsel for the Assessee. We find that the Coordinate Bench Chandigarh of ITAT has already decided the ratio in the Printed from counselvise.com 580-Chd-2025 Barfani Sewa Mandal, Kaithal 4 case of ‘Imame Rabbani Foundation vs CIT( E)’, wherein’ it has been clearly that that rejection of an application u/s 12AB solely for quoting an incorrect sub clause in form 10AB is unjustified. The provision of section 12AB are benevolent and remedial, minor procedural mistakes cannot deprive a genuine charitable institution of registration. 7. We have also considered following case laws on this issue brought on record by the ld. Counsel for the Assessee. 1. Annanya Education & Charitable Trust vs CIT(E), [2025] 177 taxmann.com 98 (Ahd.-Trib) 2. Shri Swaminarayan Gadi Trust vs CIT(E) 162 Taxman.com 772 (Surat-Trib,) 8. Keeping in view the aforesaid case laws of the ‘Imame Rabbabni Foundation vs CIT(E)’, Annanya Education & Charitable Trust vs CIT(E) and Shri Swaminarayan Gadi Trust vs CIT(E) (supra), Assessee’s appeal on this issue is remanded back to the file of the Ld. CIT(E) for issuing order afresh after giving due and adequate opportunity of Printed from counselvise.com 580-Chd-2025 Barfani Sewa Mandal, Kaithal 5 being heard to the Assessee as per law. The Assessee is also directed to present his case before the Ld. CIT(A) as and when called for and will not contribute in unnecessary delay in the hearing of the appeal. 9. In the result, the appeal of the Assessee stands allowed for statistical purposes. Order pronounced on 29.10.2025. Sd/- Sd/- ( KRINWANT SAHAY) ( LALIET KUMAR) Accountant Member Judicial Member “आर.क े.” आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the order forwarded to : 1. अपीलाथȸ/ The Appellant 2. Ĥ×यथȸ/ The Respondent 3. आयकर आयुÈत/ CIT 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH 5. गाड[ फाईल/ Guard File सहायक पंजीकार/ Assistant Registrar Printed from counselvise.com "