POSITIVE YUVA NETWORK ASSOCIATION,JAIPUR V. CIT EXEMPTION, JAIPUR

ITA 999/JPR/2025

AI Insights

The case involves two appeals by the Positive Yuva Network Association against the orders of the CIT (Exemption), Jaipur, which denied the registration under section 12AB and the approval under section 80G of the Income Tax Act, 1961. The CIT (Exemption) had rejected the applications on various grounds including non-registration under the Rajasthan Public Trust Act, 1959, non-genuineness of activities, and benefits to interested persons. The Tribunal noted that the assessee was not provided adequate opportunity to be heard and allowed the appeals for statistical purposes, restoring the matter to the CIT (Exemption) for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 775676 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 03-07-2025
• Laws Referred To: Income Tax Act, 1961, Rajasthan Public Trust Act, 1959
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ALKA GAUTAM
• Assessee Lawyers: ANOOP BHATIA
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice; Charitable institution
• 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,”B” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa a Jh xxu Xkks;y ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI GAGAN GOYAL, AM vk;dj vihy la-@ITA No. 999 & 1000/JP/2025 U/S 12AB & 80G of the Act fu/kZkj.k o\"kZ@Assessment Year : 2025-26 Positive Yuva Network Association Plot No. 89, Shyam Sarowar Khori Near Ringh Road, Looniyawas, Luniyawas B.O. Jaipur – 302 031 cuke Vs. The CIT (Exemption) Jaipur LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAMAP 1025 H vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby : Shri Anoop Bhatia, CA jktLo dh vksjls@Revenue by: Mrs. Alka Gautam, CIT-DR lquokbZ dh rkjh[k@Date of Hearing : 14/08/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement: 08 /09/2025 vkns'k@ORDER PER: DR. S. SEETHALAKSHMI, J.M. Both these appeals have been filed by the assessee against two different orders of the Ld.CIT (Exemption), Jaipur dated 20-06-2025 passed under section 12AB and 80G of the Income Tax Act, 1961 respectively. The grounds of appeal raised by the assessee in the above mentioned appeals are as under:- Printed from counselvise.com 2 ITA NOS. 999 & 1000/JP/2025 POSITIVE YUVA NETWORK ASSOCIATION VS CIT (EXEMPTION), JAIPUR ITA NO. 999/JP/2025 U/S 12AB of I.T. Act, 1961 ‘’1. On the facts and circumstances of the case and in law, the ld. CIT (Exemption) has grossly erred in rejecting the final registration application filed u/s 12AB of the Income Tax Act, 1961. Such denial of registration is incorrect and invalid in law hence deserves to be quashed. 2. On the facts and circumstances of the case and in law, the ld. CIT (Exemption) has erred in denying registration on the basis of non-registration under Rajasthan Public Trust (RPT) Act, 1959. However, the trust is duly registered under the RPT Act. Hence denial of registration on this ground is completely illogical, unwarranted and against the principal of natural justice hence deserves to be rolled back. 3. On the facts and circumstances of the case and in law, the ld. CIT(Exemption) has further erred in rejecting the registration application on the ground of Non-Genuineness of Activities. However, the activities of the trust are completely genuine and explainable. Therefore, the denial of registration on this basis is completely irrational, illogical and against the law, hence deserves to be set aside. 4. On the facts and circumstances of the case and in law, the ld. CIT(Exemption) has erred in denying registration on the basis that trust is involved in benefit of interest person mentioned under section 13(3) and siphoning of funds which completely vague and baseless. The activities of the trust are solely for the charitable purpose hence denial of final registration on this ground is completely incorrect, unnecessary and unjustified hence deserves to be deleted. 5. On facts and in circumstances of the case and in law, the ld. CIT (Exemption) has further erred in cancelling the provisional registration earlier granted under section 12A of the Income Tax Act, 1961. Such cancellation being arbitrary in nature as well as unlawful hence deserves to be annulled.’’ ITA NO. 1000/JP/2025 U/S 80G of I.T. Act, 1961 ‘’1. On the facts and circumstances of the case and in law, the ld. CIT(Exemption) has grossly erred in rejecting the approval u/s 80G of the Income Tax Act, 1961. Such denial of approval is incorrect and invalid in law hence deserves to be quashed. Printed from counselvise.com 3 ITA NOS. 999 & 1000/JP/2025 POSITIVE YUVA NETWORK ASSOCIATION VS CIT (EXEMPTION), JAIPUR 2. On the facts and circumstances of the case and in law, the ld. CIT (Exemption) has erred in rejecting the approval under section 80G on the ground of non-registration under the Rajasthan Public Trust (RPT) Act, 1959. However the trust is duly registered under RPT Act. Therefore, denial of registration on this ground is inappropriate and unlawful hence deserves to be set aside. 3. On the facts and circumstances of the case and in law, the ld. CIT(Exemption) has erred in rejecting the approval on the ground of Non-Genuineness of Activities. However, the activities of the trust are completely genuine and explainable. Thus, the denial of approval on this basis is completely irrational, illogical and against the principle of natural justice, hence deserves to be rolled back. 4. On facts and in circumstances of the case and in law, the ld. CIT (Exemption) has further erred in denying approval on the basis that trust is involved in benefit of interest person mentioned under section 13(3) and siphoning of funds which completely vague and baseless. The activities of the trust are solely for the charitable purpose hence denial of approval on this ground is completely incorrect, unnecessary and unjustified hence deserves to be deleted. 5. On the facts and circumstances of the case and in law, the ld. CIT (Exemption) has further erred in cancelling the provisional approval granted earlier under section 80G of the Income Tax Act, 1961. Such cancellation provisional registration being arbitrary in nature as well as unlawful hence deserves to be deleted’’ 2.1 Apropos to the grounds so raised by the assessee in ITA No. 999/JP/2025, the ld. CIT(E) rejected the assessee’s claim of registration u/s 12AB of the Act by observing as under:- ‘’05. In view of above discussion applicant’s application u/s 12AB is liable to be rejected and thus being rejected on following grounds:-  Non registration under Rajasthan Public Trust Act, 1959.  Non-genuineness of the activities. Printed from counselvise.com 4 ITA NOS. 999 & 1000/JP/2025 POSITIVE YUVA NETWORK ASSOCIATION VS CIT (EXEMPTION), JAIPUR  Benefit of interested person and siphoning off funds. 04. Further 12AB (1)(b)(i) (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 05.02.2024 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 lapsed and cancelled.’’ 2.2 Apropos to the ground so raised by the assessee in ITA No. 1000/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 Act, 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/EXM45/2025-26/1077248670(1) dated 20- 06-2025 the application of the applicant regarding approval u/s12AB was rejected. Also during the present proceedings, the applicant has failed to furnish any replies, thus genuineness of activities and al the above issues remains same. Thus genuineness of the activities and all the issues remain same. Thus the claim of the applicant u/s 80G is liable to be rejected on this issue on following grounds:-  Non Registration under Rajasthan Public Trust Act, 1959.  Non Genuineness of activities.  Benefit to interested persons and siphoning off funds. Printed from counselvise.com 5 ITA NOS. 999 & 1000/JP/2025 POSITIVE YUVA NETWORK ASSOCIATION VS CIT (EXEMPTION), JAIPUR In view of above discussion, the application in Form No.10AB seeking exemption u/s 80G 03. In view of above discussion, assessee’s claim of approval u/s 80G is liable to be rejected and thus being rejected on following grounds:- Approval u/s 80G cannot be granted without registration u/s 12AB. 04. Further 2nd proviso to 80G(5) also state that if CIT is not has to pass order rejecting such application and also cancelling its earlier approval. Thus, it is clarified that applicant provisional approval under clause (iv) of first proviso to sub- section (5) of section 80G of the Income Tax Act. 1961 dated 31.01.2024 is also being cancelled. Further 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 the above appeals mainly submitted that the assessee was not provided adequate opportunity of being heard by the ld. CIT(E) and thus the asssessee should be provided one more opportunity to contest the case before the ld. CIT(E) and adduced the documents/ details as desired by him. . Further, the ld.AR of the assessee has filed the certificate issued by the Office of Assistant Commissioner (Pratham), Devsthan Vibhag, Jaipur Khand, Jaipur on 20-06-2025 under RPT Act, 1959. Conclusively, the ld AR of the assessee prayed that the assessee trust may be provided one more opportunity to the contest the case before the ld CIT(E) and restore the appeals to the file of ld CIT(E) for afresh adjudication. Printed from counselvise.com 6 ITA NOS. 999 & 1000/JP/2025 POSITIVE YUVA NETWORK ASSOCIATION VS CIT (EXEMPTION), JAIPUR 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 the ld. CIT(E) has rejected the assessee’s claim of registration u/s 12AB of the Act. It is also noticed that the ld.CIT(E) has cancelled the provisional registration of the assessee for the reason that the assessee trust had failed to give proper justification for regularization of provisional registration. The prayer of the ld.AR of the assessee is that the assessee may be provided one more chance to adduce the desired documents before the ld. CIT(E) to resolve the issue in question and the assessee trust has been granted the Registration by the Office of Assistant Commissioner (Pratham), Devsthan Vibhag, Jaipur Khand, Jaipur on 20-06-2025 under RPT Act, 1959. 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 and other documents required by him then the application of the assessee trust for registration u/s 12AB of the Act be decided afresh in accordance with law. The assessee trust is also directed to produce the complete Form 10AB and produce the documents relating to the genuineness of the activities etc. before the ld CIT(E) Printed from counselvise.com 7 ITA NOS. 999 & 1000/JP/2025 POSITIVE YUVA NETWORK ASSOCIATION VS CIT (EXEMPTION), JAIPUR 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. 3.0 In the result, the appeals of the assessee are allowed for statistical purposes. Order pronounced in the open court on 08/09/2025 Sd/- Sd/- ¼xxu Xkks;y ½ ¼ Mk0 ,l- lhrky{eh ½ (Gagan Goyal) (Dr. S. Seethalakshmi) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 08 /09/2025 *Mishra vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Positive Yuva Network Association, Jaipur 2. izR;FkhZ@ The Respondent- The CIT(E), Jaipur 3. vk;dj vk;qDr@ The ld CIT 4. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 5. xkMZ QkbZy@ Guard File (ITA Nos. 999 & 1000/JP/2025) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar Printed from counselvise.com "