DIVYA JYOTI DRISHTIHIN KALYAN SAMITI,JAIPUR V. CIT EXEMPTION, JAIPUR, JAIPUR

ITA 139/JPR/2025

AI Insights

The case involves two appeals by Divya Jyoti Drishtihin Kalyan Samiti against the orders of the CIT (Exemption), Jaipur, which rejected the applications for registration under section 12AB and for exemption under section 80G of the Income Tax Act, 1961. The Tribunal noted that the CIT (Exemption) had rejected the applications primarily due to the assessee's failure to provide necessary documentation and registration under the Rajasthan Public Trust Act, 1959. The Tribunal found that the CIT (Exemption) had not adequately considered the principles of natural justice in rejecting the applications without sufficient opportunity for the assessee to respond or rectify the deficiencies.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314528 (ITAT-JAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: misc
• Other Referred Cases: New Noble Education Society Civil Appeal No. 3795 of 2014
• Laws Referred To: Income Tax Act, 1961, Rajasthan Public Trust Act, 1959
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANITA RINES H
• Assessee Lawyers: R.S. POONIA
• Keywords: Opportunity of being heard; Principle of natural justice; Competent authority
• Section: 12A; 80G

Judgement Text

"vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBkSM+ deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No.139 & 140/JPR/2025 u/s 12AB and 80G of the Act Divya JyotiDrishtihin Kalyan Samiti C/o R.S. Poonia, Siwad Area, Krishna Marg Bapu Nagar, Jaipur 302 015 cuke Vs. The CIT-Exemption, Jaipur. LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.:AACAD 4663 R vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby :Shri R.S. Poonia, CA jktLo dh vksjls@Revenue by: Mrs. Anita Rinesh, JCIT-DR lquokbZ dh rkjh[k@Date of Hearing : 21/04/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement: 05 /05/2025 vkns'k@ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM These are two appeals filed by the assessee against two different orders of the Ld.CIT (Exemption), Jaipur both dated 30-11-2024 passed under section 12AB and 80G of the Income Tax Act, 1961 respectively. The grounds of appeal raised by the assessee in both the appeals are as under:- 2 ITA NOS. 139 & 140/JPR/ 2025 DIVYA JYOTI DRISHTIHIN KALYAN SAMITI VS CIT (E), JAIPUR ITA No. 139/JPR/2025 U/s 12AB of I.T. Act, 1961 1. That the order passed by Ld. Commissioner of Income Tax, Exemption, Jaipur by rejecting application u/s. 12AB (1)(b) of the I.T. Act, 1961 is wrong, unwarranted and bad in law. Kindly direct to register the same. 2. That the Ld. CIT (Exemption), Jaipur has erred in law and in facts of the case by neither recording the independent satisfaction for rejection of provisional registration and nor issued Show Cause Notice for rejection of provisional registration u/s. 12A of the I.T. Act 1961 which is wrong, unwarranted and bad in Law. Kindly restore the same. 3. That the Ld. CIT (Exemption), Jaipur has erred in law and in facts of the case in rejecting the provisional registration u/s. 12A without issuing separate DIN of the rejection order, which is against the circular & notification issued by the CBDT. So, the same is wrong, unwarranted and bad in Law. Kindly restore the same. 4. That the order passed by Ld. Commissioner of Income Tax (Exemption), Jaipur by rejecting provisional registration u/s. 12Aof the I.T. Act, 1961 is wrong, unwarranted and bad in law. Kindly direct to register the same. ITA No. 140/JPR/2025 U/s 80G of I.T. Act, 1961 1. That under the facts and in the circumstances of the case Ld. Commissioner of Income Tax, Exemption, Jaipur rejected the application u/s. 80G(5) (iii) of the I.T. Act, 1961 which is wrong, unwarranted and bad in law. Kindly direct to register the same. 2. That the Ld. CIT (Exemption), Jaipur has erred in law and in facts of the case by neither recording the independent satisfaction for rejection of provisional approval and nor issued Show Cause Notice for rejection of provisional approval u/s. 80G of the I.T. Act 1961 which is wrong, unwarranted and bad in Law. Kindly restore the same. 3. That the Ld. CIT (Exemption), Jaipur has erred in law and in facts of the case in rejecting the provisional approval u/s. 80G without issuing separate DIN of the rejection order, which is against the circular & notification issued by the CBDT. So, the same is wrong, unwarranted and bad in Law. Kindly restore the same. 4. That the order passed by Ld. Commissioner of Income Tax (Exemption), Jaipur by rejecting provisional approval u/s. 80G of the I.T. Act, 1961 is wrong, unwarranted and bad in law. Kindly direct to register the same. 3 ITA NOS. 139 & 140/JPR/ 2025 DIVYA JYOTI DRISHTIHIN KALYAN SAMITI VS CIT (E), JAIPUR 2.1 Apropos to the ground so raised by the assessee in ITA No. 139/JPR/2025, the ld. CIT(E) rejected the assessee’s claim of registration u/s 12AB of the Act by observing as under:- ‘’2.5. Assessee vide letter dated 03.09.2024 was given a show cause to submit documents/explanation by 18.09.2024, the relevant portion of which is reproduced as under- \"Whether the institution is registered under Rajasthan Public Trust Act, 1959, if not please give explanation that why same should not be considered violation of section 12AB(1)(b)(i)(B) of the Income Tax Act read with sec 17 of the Rajasthan Public Trust Act, 1959 and decision of Hon'ble Apex Court in the case of New Noble Education Society Civil Appeal No. 3795 of 2014 dated 19 10 2022 and why the application should not be rejected\" Further, two more opportunities were also provided vide letters dated 18.10.2024 & 04.11 2024. However, assessee has failed to prove that assessee is registered under RPT Act, 1959 as discussed above. In light of above discussion and in the absence of registration under Rajasthan Public Trust Act, 1959, assessee is not eligible for registration u/s 12AB. 03. Non-Genuineness of Activities & Non-compliance:- 3.1. It is important to mention here that while examining the claim of the assessee u/s 12AB of I.T. Act, the Commissioner of Income-tax has been empowered to call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and may also make such inquiries as he may deem necessary in this behalf. Under such powers vested in CIT (E), the applicant was asked to file various details like:-  Details settlors/trustees/members; 4 ITA NOS. 139 & 140/JPR/ 2025 DIVYA JYOTI DRISHTIHIN KALYAN SAMITI VS CIT (E), JAIPUR  List of donors, subscription, fees received/Proof of donations received and nature of receipts,  Application of income/utilization of funds,  Copy of final/annual accounts:  Bills and vouchers of expenses, ledger accounts, bank account statement,  Proof of activities carried out,  Details whether any part of income benefitted to persons covered u/s 13(1)(c)  Details of Social handle  Digital footprint, 3.2. However, the applicant has failed to comply with the letters/notices, despite of 3 opportunities given. The above details were sought from the applicant to determine the actual purpose/nature of expenditures made and to determine whether the impugned charitable activity had actually been done by the trust or not. Such type of verification is necessary to keep a check and balance on the actual working of the trust. Since, the applicant didn't furnish sought details, the justification of impugned activity could not be derived and it is not known whether the applicant is genuinely carrying out charitable activity as per its objects. Hence, the applicant has failed to justify the genuineness of activities and thus falls out of the scope of registration u/s 12AB of the Act. 04. The assessee has failed to furnish requisite details/documents/activities/evidences etc, in support of its claim in form No. 10AB. In view of above discussion assessee's claim of registration section 12AB is liable to be rejected and thus being rejected on following grounds: - 5 ITA NOS. 139 & 140/JPR/ 2025 DIVYA JYOTI DRISHTIHIN KALYAN SAMITI VS CIT (E), JAIPUR  Registration under RPT Act, 1959.  Non-Genuineness of Activities & Non-compliance 05. Further 12AB (1)(b)(ii) (B) of the Income Tax Act, 1961 also state that if CIT is not satisfied has to pass order rejecting such application and also cancelling its earlier registration. Thus, it is clarified that applicant's provisional registration under clause (vi) of clause (ac) of sub-section (1) of section 12A of the Income Tax Act, 1961 dated 27.05.2021 is also being cancelled. Further assessee has failed to give proper justification for regularization of provisional registration, thus with this order provisional registration is also cancelled.’’ 2.2 Apropos to the ground so raised by the assessee in ITA No. 140/JP/2025, the ld. CIT(E) rejected the assessee’s claim of exemption u/s 80G of the Act by observing as under:- 02. Approval u/s 80G cannot be granted without registration u/s 12AB. 2.1 As per rule 11AA of the Income Tax Rules, 1962, the registration u/s 12A/12AB or notification u/s 10(23C) is a precondition for granting approval u/s 80G of the I.T. Act, 1961. Vide this office order No. ITBA/EXM/F/EXM43/2024- 25/1070781825(1) dated 30-11-2014. In view of the above discussion, the application in Form No. 10AB seeking exemption u/s 80G is liable to be rejected. 03. Further 2nd Proviso to 80G(5) also states that if CIT is not satisfied has to pass order rejecting such application and also cancelling its earlier registration. Thus, it is clarified that applicant’s provisional approval under clause (iv) of first proviso to Sub-Section (5) of Section 80G of the Income Tax Act, 1961 dated 09-07-2021 is also being cancelled. Further, 6 ITA NOS. 139 & 140/JPR/ 2025 DIVYA JYOTI DRISHTIHIN KALYAN SAMITI VS CIT (E), JAIPUR assessee has failed to give proper justification for regularization of provisional approval, thus with this order provisional approval is also lapsed and cancelled.’’ 2.3 During the course of hearing, the ld. AR of the assessee in both the appeals mainly submitted that the assessee was not provided adequate opportunity of being heard by the ld. CIT(E) and thus both the orders should be quashed being against the principles of natural justice. Further, the ld. AR of the assessee stated at Bar that the assessee trust is in the process of applying the registration under RPT Act, 1959 before the competent authority and it is likely to get the same and also the same would be produced as and when granted. It is submitted by the ld. AR of the assessee that without verifying the details, documents, evidences, the ld. CIT(E) has in a routine manner rejected the approval of registration of trust u/s 12AB of the Act. However, the ld. ARof the assessee prayed that this issue may kindly be restored to the file of the ld.CIT(A) for afresh adjudication and the details so required / desired by the ld. CIT(E) shall be adduced before the ld. CIT(E) 2.4. Per contra, the ld. DR relied on the orders of the ld. CIT(E). 2.5 After hearing both parties and perusing the materials available on record, we noticed that an application for registration u/s 12AB of the Act was rejected by the ld CIT(E) on the ground that the assessee is not 7 ITA NOS. 139 & 140/JPR/ 2025 DIVYA JYOTI DRISHTIHIN KALYAN SAMITI VS CIT (E), JAIPUR registered under RPT Act, 1959 and in this regard, the ld. AR of the assessee stated at Bar that the assessee trust is in the process of applying the same before the competent authority and it is likely to get the same. Therefore, in these circumstances, we restore the matter back to the file of the ld. CIT(E) with the direction that as and when the assessee trust produces the copy of the Registration under RPT Act, 1959 then the application of the assessee trust for registration u/s 12AB of the Act be decided afresh in accordance with law. The assessee is also required to submit the documents relating to genuineness of the activities and also Registration Certificate from Devsthan Vibhag, Ajmer under Rajasthan Public Trust Act, 1959 with a view to resolving the dispute in question. 2.6 Since we have restored the appeal of the assessee with regard to the registration u/s 12AB of the Act to the file of the ld. CIT(E) for afresh adjudication, therefore, the outcome of appeal of the assessee u/s 80G of the Act is consequential in nature. 2.7 Before parting, we may make it clear that our decision to restore the matter back (supra) to the file of the ld. CIT(E) shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the ld. CIT(E) independently in accordance with law. 8 ITA NOS. 139 & 140/JPR/ 2025 DIVYA JYOTI DRISHTIHIN KALYAN SAMITI VS CIT (E), JAIPUR 3.0 In the result, both the appeals of the assessee are allowed for statistical purposes. Order pronounced in the open court on 05/05/2025. Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼jkBksM deys'k t;UrHkkbZ ½ (DR. S. SEETHALAKSHMI) (Rathod Kamlesh Jayantbhai) U;kf;dlnL;@Judicial Member ys[kklnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 05/05/2025 *Mishra vkns'k dh izfrfyfivxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Divya Jyoti Drishtihin Kalyan Samiti, Sikar 2. izR;FkhZ@ The Respondent- CIT(E), Jaipur. 3. vk;djvk;qDr@ The ld CIT 4. foHkkxh; izfrfuf/k] vk;djvihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 5. xkMZQkbZy@ Guard File ITA No. 139 & 140/JPR/2025) vkns'kkuqlkj@ By order, lgk;diathdkj@Asstt. Registrar "