KRISHNAVI CHARITABLE TRUST,DELHI V. CIT(EXEMPTION), DELHI, DELHI

ITA 2789/DEL/2024

AI Insights

The case involves Krishnavi Charitable Trust appealing against the decision of the CIT (E), which rejected their application for registration under section 12A(1)(ac)(ii) and 12A(1)(ac)(iii) of the Income Tax Act, 1961. The CIT (E) had raised objections regarding the trust deed, specifically the absence of an irrevocable clause and a dissolution clause, and the presence of a special clause that needed removal. The Tribunal noted that the assessee had addressed these objections by pointing out the relevant clauses in the trust deed and initiating the removal of the special clause. The Tribunal decided to allow the appeal for statistical purposes and remand the case back to the CIT (E) for a fresh decision on the specific issue of the special clause, emphasizing the need for a fair hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 470705 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OM PARKASH
• Assessee Lawyers: PAWAN CHHIKARA
• Keywords: Opportunity of being heard; Principle of natural justice; Charitable institution
• Section: 20

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘C’ BENCH, NEW DELHI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER, AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 2789/DEL/2024 [A.Y ] Krishnavi Charitable Trust Vs. The C.I.T. Shop No. 4, T/F, Sector - B [Exemptions] Pocket - 7, Vasant Arcade New Delhi Vasant Kunj, Delhi PAN: AAFTK 1848 M (Applicant) (Respondent) Assessee By : Shri Pawan Chhikara, CA Department By : Shri Om Parkash, Sr. DR Date of Hearing : 28.01.2025 Date of Pronouncement : 07.02.2025 ORDER PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:- This appeal by the assessee is preferred against the order of the ld. CIT(E), Delhi dated 27.03.2024. 2 2. The grounds raised by the assessee read as under: “1. The Ld. CIT(E), has committed gross injustice to the appellant by and passed the order rejecting the application for registration filed by the assesse trust u/s 12A(1)(ac)(iii) of the Income Tax Act, 1961 which is bad both in the eye of law and on the and facts of the case. 2. On the facts and circumstance of the case, the Ld CIT(E) has erred both on facts and in law in passing the order ex parte despite the facts that non- compliance of the notices was on account of the reasons beyond the control of the assesse 3. On the facts and circumstances of the case, the Ld CIT (E) has erred on both on facts and in law in passing the order rejecting the application for registration u/s [2A(1)(ac)(ii) of the Income Tax Act without providing the opportunity of being heard in violation of the principle of natural justice. 4. On the facts and circumstances of the case, the order passed by the Id. CIT(E) are in violation of the statutory conditions of the act and the procedure prescribed under the law and as such the same is bad in law and liable to be quashed. 5. On the facts and circumstances of the case, the Ld. CIT (E) has erred both on facts and in law in rejecting the application for registration u/s 12A(1)(ac)(ii) of the Income Tax act despite the fact that the assesse filed the application with in the prescribed time limit and fulfilled all the conditions as provided under the Income Tax act and thus. eligible for registration 3 6. On the facts and circumstances of the case, the Id CIT(E) erred in rejecting the application for registration u/s 12A(1)(ac) (iii) of the Income Tax act, 1961 despite the fact that there is no adverse findings regarding the aims, objects and genuineness of the activities of the trust and hence application for registration cannot be rejected.” 3. The ld. counsel for the assessee has filed an application for condonation of delay. 4. We have perused the application and find that there is a delay of only 5 days. For the reasons stated in the affidavit filed by the assessee, we condone the delay. 5. We have heard the rival submissions and have perused the relevant material on record. We find that the CIT, Exemption for registration u/s 12AB of the Income-tax Act, 1961 [the Act, for short] has raised certain objections for rejecting the Registration. They are as follows:: 1) no- existence of irrevocable clause in the Deed Of Trust. The ld AR explained that the irrevocable clause is available at Page no. 4 of the trust deed at point no. 4. 4 2) non-existence of dissolution clause in the Trust Deed. The ld AR pointed out that the dissolution clause is clearly written at pg no. 19 of the trust deed at sub point no. xiv of point no. 9. 3) Existence of special clause at page no. 21 of the Trust Deed. The ld AR submitted that the process for removal of this clause has already been started through supplementary deed and is likely to be removed within 20 days and the same shall be submitted before the CIT (Exemption) during the proceedings in relation to the registration. 6. Per contra, the ld. DR relied upon the orders of the ld. CIT(E). 7. In view of the above factual position, we find that the Lease deed submitted by the assessee before the CIT(E) clearly shows that the objections raised by the ld. CIT(E) has been met. We also find that the special clause is required to be omitted, the process of which the assessee has already undertaken. We, therefore, find merit in the grounds raised by the assessee and allow the same subject to the condition that the assessee modifies the trust deed by omitting the Special Clause at Page 21 of the Trust. 5 8. The assessee has raised another ground stating that the ld. CIT(E) has decided the appeal ex parte. We have already adjudicated the appeal and we are of the considered opinion that, in the interest of justice and fair play, we deem it fit to restore the appeal to the file of the CIT (E) for fresh adjudication on the issue of removal of the special clause. The CIT(E) is directed to decide the issue of special clause afresh after affording reasonable and sufficient opportunity of being heard to the assessee. The assessee is directed to avail the opportunity and present its case. 9. In the result, the appeal of the assessee in ITA No. 2789/DEL/2024 is allowed for statistical purposes. The order is pronounced in the open court on 07.02.2025. Sd/- Sd/- [CHALLA NAGENDRA PRASAD] [NAVEEN CHANDRA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 07th FEBRUARY, 2025. VL/ 6 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) Asst. Registrar, 5. DR ITAT, New Delhi Sl No. PARTICULARS DATES 1. Date of dictation of Tribunal Order… 28.01.2025 2. Date on which the typed draft Tribunal Order is placed before the Dictation Member .02.2025 3. Date on which the fair Tribunal Order is placed before the Dictating Member for pronouncement 4. Date on which the approved draft Tribunal Order comes to the Sr. P.S./P.S. 5. Date on which the fair Tribunal Order is placed before the Dictating Member for pronouncement 6. Date on which the signed order comes back to the Sr. P.S./P.S 7. Date on which the final Tribunal Order is uploaded by the Sr. P.S./P.S. on official website 8. Date on which the file goes to the Bench Clerk alongwith Tribunal Order 9. Date of killing off the disposed of files on the judiSIS portal of ITAT by the Bench Clerks 10. Date on which the file goes to the Supervisor (Judicial 11. The date on which the file goes to the Assistant Registrar for endorsement of the order 12. Date of Despatch of the Order "