ROTARY CLUB OF GANDEVI,NAVSARI V. COMMISSIONER OF INCOME-TAX (EXEMPTIONS), AHMEDABAD

ITA 589/SRT/2024

AI Insights

The case involves the Rotary Club of Gandevi appealing against the decision of the Commissioner of Income Tax (Exemptions), Ahmedabad, which rejected their application for registration under Section 12AB of the Income Tax Act, 1961. The primary grounds for rejection were the incorrect citation of the provision under which they applied and the assertion that the Trust was set up for the welfare of its members only. The Tribunal found that the assessee was not given a fair opportunity to respond adequately to the show cause notice, leading to the decision to remand the case back to the CIT(E) for a fresh consideration.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 470563 (ITAT-SURAT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2023-2024
• Other Referred Cases: Dinshaw Daboo Charity Trust Vs CIT(E), Sunni Muslim Jamat Aamena Madressa Ebdatgah Waqf Committee Vs. CIT(E)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 12A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No. 589/Srt/2024 (Assessment Year: N/A) (Physical hearing) Rotary Club of Gandevi, Dhamdacha, Dena Bank, Amalsad, Navsari-396310. PAN No. AACTR 0998 J Vs. C.I.T(Exemptions), Ahmedabad Appellant/ assessee Respondent/ revenue Assessee represented by Shri Darshit J. Naik, CA Department represented by Shri Ravi Kant Gupta, CIT-DR Date of Institution of Appeal 20/05/2024 Date of hearing 17/12/2024 Date of pronouncement 21/01/2025 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of learned Commissioner of Income Tax (Exemptions), Ahmedabad (in short, the ld. CIT(E)) dated 29/03/2024 in rejecting the application for registration of Trust under Section 12AB of the Income Tax Act, 1961 (in short, the Act). Following grounds of appeal have been raised by the assessee: “1. The learned Commissioner of Income Tax erred in rejecting the application for registration under Section 12A made by the Appellant. 2. The learned Commissioner of Income Tax erred in not treating the application filed as an application u/s 12A(1)(ac)(i) despite specific requests of the Appellant. 3. The learned Commissioner erred in holding that the Appellant is formed for the welfare of its members, which is contrary to the facts. 4. Having regard to the facts and circumstances of the case and the provisions of law, the appellant submits the Commissioner of Income tax be directed to grant the Certificate u/s 12A to the appellant. ITA No. 589/Srt/2024 Rotary Club of Gandevi Vs CIT(E) 2 The Appellant craves leave to add, to alter or amend the above grounds of appeal as and when advised.” 2. Rival submissions of both the parties have been heard and record perused. At the outset of hearing, the learned Authorised Representative (ld. AR) of the assessee submits that the application of assessee was rejected in a mechanical way. The assessee was not given fair and reasonable opportunity. In response to show cause notice dated 26/02/2024, the assessee asked for adjournment vide application dated 29/02/2024. No fresh notice was served upon the assessee. The ld. CIT(A) basically rejected the application of assessee for registration of assessee- trust under section12AB on two grounds firstly, that the assessee filed application under Section 12A(1)(ac)(iii) instead of Section 12A(1)(ac)(i) and secondly the Trust is set up for welfare of its member only. So far as wrong limb is concerned, the ld AR of the assessee submits that while filing application on ITBA portal, the applicant/ assessee inadvertently mentioned incorrect sub-clause of sub- Section (1) of Section 12A. On such issues, this Bench has taken a view that mentioning of wrong limb is not fatal in Dinshaw Daboo Charity Trust Vs CIT(E) in ITA No. 47/Srt/2024 order dated 20/03/2024. And on secondly ground of rejection that the Trust is set up for welfare of its member only, the ld. AR of the assessee submits that objects as a whole has to be seen and not in isolation of particular clauses of their objects as held by this Bench in the case of Sunni Muslim Jamat Aamena Madressa Ebdatgah Waqf Committee Vs. CIT(E) in ITA No. 705/Srt/2023 order dated 26/03/2024. The ld. AR of the assesse further reiterated that he was not allowed reasonable opportunity, therefore, the matter may be restored back to the file of ld. ITA No. 589/Srt/2024 Rotary Club of Gandevi Vs CIT(E) 3 CIT(E) to consider the matter afresh with the liberty to assessee to file its submission. 3. On the other hand, the learned Commissioner of Income Tax-Departmental Representative (ld. CIT-DR) for the revenue submits that the assessee was given sufficient opportunity as has been mentioned in the order itself. The ld. CIT(E) has passed a very reasonable and detail order. 4. We have considered the rival submissions of both the parties and have gone through the orders of the lower authorities carefully. we have also deliberated on the case laws relied by ld AR of the assessee. We find that the assessee in response to the show cause notice dated 26.02.2024 sought adjournment for fifteen days by filing application dated 29/02/2024. No fresh notice was served upon the assessee but the ld. CIT(E) rejected the application vide his order dated 29.03.2024. On careful perusal of order, we find that the ld. CIT(E) while rejecting the application of assessee confined his finding mainly on two issues firstly, that the assessee has mentioned wrong provision and secondly the Trust is set up for welfare of its members only. Considering the fact that the ld. CIT(E) has passed order in absence of proper explanation from assessee, therefore, we deem it appropriate to restore the matter back to the file of ld. CIT(E) to reconsider the application of assessee afresh and in accordance with law. Needless to direct that before passing the order on merit, the ld. CIT(E) shall grant reasonable opportunity of hearing to the assessee. The assessee is also directed to be more vigilant in future and in making proper compliance and not to make any default in responding the ITA No. 589/Srt/2024 Rotary Club of Gandevi Vs CIT(E) 4 notices issued by the ld. CIT(E). With this direction, the grounds of appeal raised by the assessee are allowed for statistical purposes. 5. In the result, this appeal of assessee is allowed for statistical purposes only. Order pronounced in the open court on 21st January, 2025. Sd/- Sd/- (BIJAYANANDA PRUSETH) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 21/01/2025 *Ranjan Copy to: 1. Assessee – 2. Revenue - 3. CIT 4. DR 5. Guard File By order Sr. Private Secretary, ITAT, Surat "