MANGALORE CITY EDUCATIONAL & CHARITABLE TRUST,MANGALURU V. COMMISSIONER OF INCOME TAX(EXEMPTIONS)BANGALORE, COMMISSIONER OF INCOME TAX(EXEMPTIONS)BANGALORE

ITA 304/BANG/2025

AI Insights

The case involves the Mangalore City Educational & Charitable Trust, which appealed against the order of the CIT (Exemptions) that cancelled its registration under section 12AB of the Income Tax Act, 1961. The Trust had initially received provisional registration to provide educational relief and operate a medical and nursing college. However, the CIT (Exemptions) cancelled the registration due to the Trust's failure to respond to notices and provide necessary documents during the application for final registration. The Trust contested this decision, arguing that it had indeed submitted the required documents online, which the CIT (Exemptions) failed to consider. The Tribunal found merit in the Trust's argument and remanded the case for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 669523 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: E. SHRIDHAR
• Assessee Lawyers: SRIRAM V RAO
• Keywords: Opportunity of being heard; Charitable institution
• Section: 12A

Judgement Text

"ITA No.304/Bang/2025 Mangalore City Educational & Charitable Trust, Ullal IN THE INCOME TAX APPELLATE TRIBUNAL “B’’ BENCH: BANGALORE BEFORE SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA No.304/Bang/2025 Assessment Year : NA Mangalore City Educational & Charitable Trust No.1553, Mangaluru Dakshina Kannada Ullal SO Karnataka 575 020 PAN NO : AAHTM1259L Vs. CIT (Exemptions) Bangalore APPELLANT RESPONDENT Appellant by : Sri Sriram V Rao, A.R. Respondent by : Sri E. Shridhar, D.R. Date of Hearing : 22.04.2025 Date of Pronouncement : 24.06.2025 O R D E R PER KESHAV DUBEY, JUDICIAL MEMBER: This appeal at the instance of the assessee is directed against the order of the ld. CIT (Exemptions) dated 26.12.2024 vide DIN & Notice No. ITBA/EXM/F/EXM45/2024-25/107159728(1) cancelling the registration u/s 12AB of the Income Tax Act, 1961 (in short “The Act”). 2. The assessee has raised the following grounds of appeal: ITA No.304/Bang/2025 Mangalore City Educational & Charitable Trust, Ullal Page 2 of 5 3. Brief facts of the case are that the assessee being a public charitable trust had obtained the provisional registration under sub clause (vi) of clause (ac) of sub-section (1) of Section 12A of the Act on 27.5.2021 vide provisional registration no. AAHTM1259LE20206 effective from AY 2021-22 to AY 2023-24 with the main objective of providing educational relief and with the intention to carry out medical and nursing college. It is submitted that the assessee trust had obtained a property for this purpose on a long term lease of 33 years and also obtained the affiliation from Rajiv Gandhi University of Health Science, Karnataka vide their Notification dated 20.9.2024 to run Aaliyah College of Nursing. The assessee trust had applied for the final registration on 29.6.2024 in form no.10AB before the ld. CIT(A) Bangalore. The assessee was accordingly granted opportunity of being heard vide notices dated 4.10.2024, 23.10.2024 and 29.10.2024 wherein the assessee was required to appear along with ITA No.304/Bang/2025 Mangalore City Educational & Charitable Trust, Ullal Page 3 of 5 documents/details. However, The ld. CIT(E) observed that the assessee had neither responded to any of the notices issued nor appeared and submit all the necessary documents/details as required for registration u/s 12AB of the Act and accordingly, held that as the assessee is required to submit necessary documents to prove the genuineness of the activities of the trust and also the compliance of such requirements of any other law as are material for the purpose of achieving its objects, and hence application in form 10AB dated 29.6.2024 filed for registration u/s 12AB of the Act was rejected and the registration was also cancelled. 4. Aggrieved by the order of ld. CIT(Exemptions) dated 26.12.2024, the assessee has filed the present appeal before this Tribunal. The assessee has also filed a paper book comprising 115 pages containing therein copy of written submission, acknowledgement of online submission dated 7.11.2024, copy of submissions made on 7.11.2024 as well as letter of authorization. 5. Before us, the ld. A.R. of the assessee vehemently submitted that in response to notice dated 29.10.2024, the assessee trust in fact filed the online submission on 7.11.2024 bearing acknowledgement no.682963391071124 by uploading assessee’s written submissions along with the copy of 12AB registration, trust deed, lease agreement, trustee details, notes on activities as well as financial statements. However, the ld. CIT (Exemptions) without considering the same has been pleased to pass an order on 26.12.2024 i.e. almost after one & half month. Further the ld. A.R. of the assessee vehemently submitted that the allegation as made by the ld. CIT(Exemptions) that assessee had not filed any submission by way of furnishing documents/details as required for registration u/s 12AB of the Act is not correct. Lastly, ld. A.R. submitted that ITA No.304/Bang/2025 Mangalore City Educational & Charitable Trust, Ullal Page 4 of 5 even before passing the ex-parte order, ld. CIT(Exemptions) failed to issue show cause notice granting opportunity of being heard. 6. Ld. D.R. on the other hand, supported the order of the authorities below. 7. We have heard the rival submissions and perused the materials available on record. On going through the page 3-4 of the paper book filed before us, we take a note of the fact that the assessee has in fact filed a written submission along with the copy of provisional registration certificate u/s 12AB of the Act, copy of trust deed, copy of audited financial statement, list of trustees, copy of lease agreement for taking premises to run the college, copy of affiliation received from Rajiv Gandhi University of Health Sciences, Karnataka, College activity photos, etc. on 7.11.2024 bearing acknowledgement no. 682963391071124. However, the ld. CIT(Exemptions) while passing order on 26.12.2024 i.e. after one & half months has observed that assessee trust have not made any submission against the notices issued. In our opinion, the ld. CIT(Exemptions) without considering the submission as made by the assessee trust on 7.11.2024 has passed an order by cancelling the registration of the assessee. Before us, ld. A.R. of the assessee requested to remand the issue back to the file of ld. CIT(Exemptions) with a direction to decide the case on merits and pass an order after providing a reasonable opportunity of being heard. This being so, in the interest of justice and fair play and as requested by the ld. A.R. of the assessee, we deem it fit and proper to remit the entire issue in dispute to the file of ld. CIT (Exemptions) to decide afresh in accordance with law. Needless to say, a reasonable opportunity of being heard must be granted to the assessee. The assessee is also directed to produce/submit all the necessary details/documents /records/financials/reports in support of its claim or as may be ITA No.304/Bang/2025 Mangalore City Educational & Charitable Trust, Ullal Page 5 of 5 required by the ld. CIT (Exemptions) for granting the registration. It is ordered accordingly. 8. In the result, appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 24th June, 2025 Sd/- (Laxmi Prasad Sahu) Accountant Member Sd/- (Keshav Dubey) Judicial Member Bangalore, Dated 24th June, 2025. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order Asst. Registrar, ITAT, Bangalore. "