JANTA SARVAJANIK KELVANI MANDAL,SURAT V. CIT(EXEMPTION), AHMEDABAD

ITA 277/SRT/2025

AI Insights

The case involves the Janta Sarvajanik Kelvani Mandal, a trust established in 1966, which applied for registration under sections 12AB and 80G of the Income-tax Act. The Commissioner of Income-tax (Exemption) rejected these applications, citing the use of incorrect section codes in the application forms. The trust appealed against these decisions, arguing that the errors were clerical and that they had provided all necessary documentation. The Tribunal found that the CIT(E) had not provided adequate opportunity for the trust to rectify the mistake and directed a reconsideration of the applications on their merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 633016 (ITAT-SURAT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Other Referred Cases: Alka Periwal Charitable Trust vs. CIT(E), Shree Swaminarayan Gadi Trust vs. CIT(E), Sarda Mission Sevashram vs. CIT(E), Rambha Charitable Trust vs. CIT(E), Shree Swaminarayan Gadi Trust Vadtal (SVG) vs. CIT(E), Dinshaw Daboo Charity Trust vs. CIT(E), Mandava Foundation vs. ITO(E), Parmeshwari Bai Memorial Trust vs. CIT(E)
• Laws Referred To: Income-tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JAIN
• Assessee Lawyers: DINESH RAMANI
• Keywords: Set aside; Opportunity of being heard; Charitable institution
• Section: 12AA; 12A; 80G

Judgement Text

" IN THE INCOME-TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE MS SUCHITRA RAGHUNATH KAMBLE, JUDICIAL MEMBER & SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA Nos.277 & 273/SRT/2025 Assessment Years: (2024-25) (Hybrid Hearing) Janta Sarvajanik Kelvani Mandal, Sarvodaya Nagar, Sardar Baug, Gujarat – 3946002 Vs. The CIT(Exemption), Ahmedabad èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AAATJ1758N (Appellant) (Respondent) Appellant by Shri Dinesh Ramani, CA Respondent by Shri Mukesh Jain, CIT-DR Date of Hearing 05/06/2025 Date of Pronouncement 11/06/2025 आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM: These two appeals emanate from the order dated 17.10.2024 and 13.12.2024 passed by the learned Commissioner of Income-tax (Exemption), Ahmedabad [in short “CIT(E)”], wherein the ld. CIT(E) rejected assessee’s application filed in Form No.10AB u/s 12A(1)(ac)(iii) of the Income-tax Act (in short ‘the Act’) and also cancelled the provisional registration granted earlier. As the application for registration u/s 12A(1)(ac)(iii) was rejected, application for approval u/s 80G(5)(iii) of the Act was also rejected. Since the assessee as well as the assessment year in these two appeals are same, with the consent of both parties, the appeals are clubbed and heard together and are decided by passing a common order for the sake of convenience and brevity. 2 ITA Nos.277 & 273/SRT/2025/AY.2024-25 Janta Sarvajanik Kelvani Mandal 2. The grounds of appeal raised by the assessee in ITA No.277/SRT/2025 are as follows: “(1) Learned C.I.T. (Exemption) has erred in law and on facts of the case in passing the impugned Order ex-parte. (2) Learned C.I.T. (Exemption) has erred in law and on the facts of the case in rejecting the permanent registration of the Appellant under Section 12AB of the Act. (3) Your Appellant reserve the right to add, delete, modify or revise any ground of appeal.” 3. The facts of the case in brief are that the assessee-trust filed an application for registration (renewal) under sub-clause (ii) of clause (ac) of sub-section (1) of section 12A the Act in Form no.10AB. The CIT(E) issued a notice on 13.09.2024. He has reproduced the provision of section 12A(1)(ac)(ii) of the Act and observed that the applicant was not holding any valid registration u/s 12A/12AB of the Act; instead it was holding a provisional registration. As the applicant was not holding any valid regular registration either in Form 10AC or Form 10AD, the applicant was supposed to file an application u/s 12A(1)(ac)(iii) instead of u/s 12A(1)(ac)(ii) of the Act. The CIT(E) has no power and facilities to amend the ‘section code’ opted by the applicant while filing Form 10AB. Hence, the application was treated as non-maintainable and rejected without merit. 4. Aggrieved by the order of CIT(E), the assessee filed appeal before the Tribunal. The learned Authorized Representative (ld. AR) filed a paper book containing 33 pages, which includes submission, registration u/s 12AA and 80G, application for registration u/s 12AA in Form 10AB. He submitted that 3 ITA Nos.277 & 273/SRT/2025/AY.2024-25 Janta Sarvajanik Kelvani Mandal the assessee-trust was established in 1966 to run educational institution in Bardoli Taluka, Surat. He submitted that assessee-trust had provided e-mail Id, i.e., ‘[e-mail]’ in Form 10AB; but the ld. CIT(E) sent notice to wrong e-mail Id, due to which assessee did not file reply. He also submitted that appellant-trust filed application inadvertently under wrong section codes. There was clerical error in section code from drop down box. Since the notice issued by ld. CIT(E) was not received by the assessee-trust, no reply or request to correct section code was made. Since the assessee- trust has furnished all the required documents and information necessary for the registration, the ld. CIT(E) holds no negative opinion except for wrong selection of section code. The ld. AR relied upon various decisions of Tribunals in cases of (i) Alka Periwal Charitable Trust vs. CIT(E), 2021 Taxpub(DT) 3817 (Surat – Trib.), (ii) Shree Swaminarayan Gadi Trust vs. CIT(E), (2024) 207 ITD 666 (Surat – Trib.), (iii) Sarda Mission Sevashram vs. CIT(E), in ITA No.994/Kol/2023, dated 31.01.2024. Therefore, ld. AR requested that the order of ld. CIT(E) may be set aside in the interests of justice and the ld. CIT(E) may be directed to decide the application of the assessee on merit after removal of the defects. 5. On the other hand, the learned Commissioner of Income-tax - Departmental Representative (ld. CIT-DR) for the revenue relied on the order of CIT(E). He would, however, have no objection, if the matter is remitted back to the file of the CIT(E) for fresh order. 4 ITA Nos.277 & 273/SRT/2025/AY.2024-25 Janta Sarvajanik Kelvani Mandal 6. We have heard both the parties and perused the materials available on record. There is no dispute that the assessee had applied for registration under new provisions of section 12AB of the Act. The CIT(E) issued only one notice on 13.09.2024. The assessee failed to furnish requisite details / documents. The CIT(E) found that the assessee has made the application under incorrect section code. Therefore, he rejected the application. He has not issued any show cause notice or clarification regarding the mistakes in the applications filed by the appellant. The ld. AR submitted that assessee- trust was not familiar with exemption provisions and entered into the incorrect section codes while filing the application. We find that it was an inadvertent mistake and the assessee was not given any opportunity to explain or cure such defects by the CIT(E). The ld. AR has explained the facts and prayed for correction in the application. In our view, the mistake in filing the entry was not fatal and could be considered under the appropriate sub- clause or clause of sections 12AB of the Act. Otherwise, the assessee has provided all the details and information while applying for registration u/s 12AB of the Act. Being first appellate authority, the plea of assessee for correction in Form is accepted and the order of CIT(E) is set aside. He is directed to allow the assessee to rectify or amend the relevant clause/sub- clause of section 12AB of the Act. Considering the fact that the application of assessee was not considered on merit, we deem it appropriate to direct the CIT(E) to treat the application of assessee on merit and pass the order in 5 ITA Nos.277 & 273/SRT/2025/AY.2024-25 Janta Sarvajanik Kelvani Mandal accordance with law. Under similar circumstances, the Co-ordinate Benches of ITAT and Hon’ble Orissa High Court in the following cases have set aside the matter to the file of CIT(E) to decide the issue on merit; viz., (i) Rambha Charitable Trust vs. CIT(E), in ITA No. 5111/Mum/2024, (ii) Shree Swaminarayan Gadi Trust Vadtal (SVG), in ITA No.369 & 370/Srt/2024, (iii) Dinshaw Daboo Charity Trust vs. CIT(E), (iv) Mandava Foundation vs. ITO(E) and (v) Parmeshwari Bai Memorial Trust vs. CIT(E), 161 taxmann.com 311 (Orissa). Before passing the order, the CIT(E) shall grant reasonable and adequate opportunity of hearing to the assessee. The assessee is also directed to furnish complete details and make all compliances before CIT(E) by not seeking adjournment without any valid reasons. In the result, the grounds of appeal raised by the assessee are allowed for statistical purpose. 7. In the result, appeals filed by the assessee are allowed for statistical purposes. ITA No.273/SRT/2025 (AY:2024-25): 8. The grounds of appeal raised by the assessee are as follows: “(1) Learned CIT(Exemption) has erred in law and on the facts of the case in rejecting the permanent registration of the Appellant under section 80G of the Act. (2) Your Appellant reserve the right to add, delete, modify or revise any ground of appeal.” 9. It is seen that the ld. CIT(E) has issued only one notice of hearing, i.e., on 18.09.2024 and proceeded to dismiss the appeals on the ground that the assessee failed to prove that it holds a valid registration u/s 12A/12AB of the 6 ITA Nos.277 & 273/SRT/2025/AY.2024-25 Janta Sarvajanik Kelvani Mandal Act in ITA No.277/SRT/2025 (supra). We have already set aside the order of ld. CIT(E) wherein he rejected the application of registration of trust, in our order in ITA No.277/SRT/2024 cited supra. Consequently, these orders of ld. CIT(E) are also set aside and remitted to the file of CIT(E) for passing fresh order after granting reasonable and sufficient opportunity of being heard to the appellant, after deciding the application for registration referred above. For statistical purposes, the appeal of the assessee is treated as allowed. 10. In the result, appeal of the assessee is allowed for statistical purposes. 11. In the combined result, appeals filed by the assessee in ITA Nos.277 & 273/SRT/2025 are allowed for statistical purposes. Orders are pronounced under the provisions of Rule 34 of ITAT Rules, 1963 on 11/06/2025. Sd/- Sd/- (SUCHITRA R. KAMBLE) (BIJAYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat Ǒदनांक/ Date: 11/06/2025 SAMANTA Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat "