JIVAN SADHNA TRUST,KHEDA V. THE CIT(EXEMPTION), AHMEDABAD

ITA 138/AHD/2025

AI Insights

The case involves Jivan Sadhna Trust, which appealed against the decision of the Commissioner of Income Tax (Exemption), Ahmedabad, rejecting their application for registration under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961. The CIT(E) had rejected the application on grounds that the trust's activities were commercial in nature and not aligned with its objectives, as it did not provide sufficient evidence of running educational institutions. The trust argued that their activities, including agricultural training for self-employment, were educational and thus eligible for registration. The tribunal acknowledged the trust's educational activities and directed the CIT(E) to reconsider the application with the new evidence.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705885 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RIGNESH DAS
• Assessee Lawyers: CHETAN SHAH
• Keywords: Set aside; Principle of natural justice

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH, AHMEDABAD BEFORE SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER ITA No.138/Ahd/2025 Jivan Sadhna Trust, AT PO Bamangam, TA. Matar, Dist. Kheda – 388 180. (Gujarat) [PAN – AACTJ 7635 E] Vs. Commissioner of Income Tax (Exemption), Room No.609, New Aayakar Bhavan, (Vejalpur), Near Sachin Tower, 100 Foot Road, Anandnagar – Prahladnagar Road, Ahmedabad – 380 015. (Appellant) (Respondent) Assessee by Shri Chetan Shah, AR Revenue by Shri Rignesh Das, CIT(DR) Date of Hearing 26.06.2025 Date of Pronouncement 04.07.2025 O R D E R PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER: This appeal is filed by the Assessee against the order of the Commissioner of Income Tax (Exemption), Ahmedabad (in short ‘the CIT(E)’) dated 24.12.2024 in the proceedings under Section 12A(1)(ac) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) 2. The brief facts of the case are that the assessee is a Trust and filed an application in Form 10AB on 27.06.2024 for registration of the Trust under Section 12A(1)(ac)(iii) of the Act. The Ld. CIT(E) has issued a letter on 04.09.2024 calling for certain details which were provided vide reply ITA No.138/Ahd/2025 Jivan Sadhna Trust vs. CIT (E) Page 2 of 5 dated 02.10.2024. Thereafter, certain explanation was sought by the Ld. CIT(E) in respect of agricultural income, water irrigation income, flour mill income disclosed by the assessee. The assessee had explained that these incomes were generated as part of training of the students for the self-employment. The Ld. CIT(E) held that the activities of the assessee were commercial in nature and not in accordance with the objectives of the Trust. Further, that the assessee did not submit any documentary evidence to establish that it was running Educational Institutions imparting training to its students for self-employment. Therefore, the Ld. CIT(E) had rejected the application for registration under Section 12A(1)(ac)(iii) of the Act and also cancelled the provisional registration granted earlier. 3. Aggrieved with the order of the Ld. CIT(E), the assessee has filed the present appeal before us. 4. The following grounds have been taken in this appeal: - 1. Rejection Order passed by the Ld. Commissioner of Income Tax (Exemption) Ahmedabad is bad in Law and against the natural justice. 2. The Ld. Commissioner of Income Tax (Exemption) Ahmedabad has eared in Law and on facts, in rejecting the application in form 10AB u/s. 12AB of the Income Tax Act, 1961. 3. The Ld. Commissioner of Income Tax (Exemption) Ahmedabad has not considered the activities of the Trust, which is part of the educational activities. 4. The Ld. Commissioner of Income Tax (Exemption) Ahmedabad has rejected the application without issuing the show cause notice, which is against the natural justice. 5. Your appellant craves, leave to add, alter, & or to emend modify substitute all or any ground of appeal before final hearing if necessity so arise.” 5. Shri Chetan Shah, the Ld. AR of the assessee submitted that the assessee trust was established in the year 1977 with the object of imparting education to poor and backward class students. According to ITA No.138/Ahd/2025 Jivan Sadhna Trust vs. CIT (E) Page 3 of 5 the policies of the Gujarat Government, the assessee trust had started various Uttar Buniyadi Vidyalay (North Basic School), Ashramshala, Chatralay and Schools. All this Institutions were providing education and education related facilities to the poor and backward class students. He explained that for the students of class 8 to 12 of Uttar Buniyadi Vidyalay, agricultural practical training was made mandatory for which a minimum 15 acres of land was made compulsory criteria. It was submitted that Uttar Buniyadi Vidyalay was started to provide the practical training of agriculture, horticulture, agriculture tools, self-employment training along with the education, which was being provided so that the students can become self-reliant. To impart the practical training of the agriculture, the Government has given the agriculture land of 15 acres on lease to the Trust. The Ld. AR submitted that in the process of imparting agricultural training to the students, the assessee trust had generated agricultural income, water irrigation and flour mill income which was duly accounted for in the books of account of the trust. He further submitted that all the schools and Chatralay being run by the trust were duly approved and, therefore, rejection of registration by the Ld. CIT(E) was not proper. He, therefore, requested that another opportunity may be allowed to the assessee to submit relevant documents to explain the activities of the trust before the Ld. CIT(E) 6. Per contra, Shri Rignesh Das, Ld. CIT(DR) had not objection, if the matter was set aside to the file of Ld. CIT(E) for this purpose. 7. We have considered the submissions of the assessee. The Ld. CIT(E) has acknowledged in the order that three Chatralay being run by the assessee trust were duly approved. The rejection of registration by the Ld. CIT(E) was for the reason that the assessee did not submit documentary evidences to establish that it was running educational ITA No.138/Ahd/2025 Jivan Sadhna Trust vs. CIT (E) Page 4 of 5 institutions imparting training to students for self-employment. The agricultural activities were, therefore, treated as commercial in nature. From the evidences brought on record in the paper-book filed by the assessee, it is found that nine institutions being run by the assessee trust were duly approved. The assessee has brought on record an order of Collector of Kheda at Nadiad whereby lease of land was renewed for fifteen years upto 31.07.2026. As per this order, about 500 children of Scheduled Castes, Scheduled Tribes and Bakshi Panch from standard 1 to 12 were receiving free agricultural education in the organisation. Further, that rain-fed agriculture training is given in monsoon and direct training is given on millet, tur, diwel etc. and the income derived out of agricultural yield is recorded in the books of account of the organization. It, prima facie, appears that the agricultural activities being carried out by the trust was part of educational program for imparting training to students in agricultural education. However, as these facts were not brought on record before the Ld. CIT(E) and not considered by him, we deem it proper to set aside the matter to the file of Ld. CIT(E) with a direction to allow another opportunity to the assessee to submit the documentary evidences and other details as required by him and to explain the activities being carried out by the assessee trust. The assessee is also directed to respond to the notices of Ld. CIT(E) and produce the details/documents as required by him. 8. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on this 4th July, 2025. Sd/- Sd/- (T.R. SENTHIL KUMAR) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member ITA No.138/Ahd/2025 Jivan Sadhna Trust vs. CIT (E) Page 5 of 5 Ahmedabad, the 4th July, 2025 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPYE C Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad 1. Date of taking dictation 01.07.2025 2. Date on which the typed draft is placed before the Dictating Member 02.07.2025 3. Date on which the approved draft comes to the Sr. P.S./P.S. 03.07.2025 4. Date on which the approved draft is placed before other Member 03.07.2025 5. Date on which the fair order is placed before the Dictating Member for pronouncement 04.07.2025 6. Date on which the file goes to the Bench Clerk 04.07.2025 7. Date on which the file goes to the Head Clerk 8. Date on which the file goes to the Assistant Registrar for signature on the order 9. Date of despatch of the Order "