SARTHAK MEMORIAL CHARITABLE TRUST,JAIPUR V. CIT EXEMPTION, JAIPUR, JAIPUR

ITA 1209/JPR/2024

AI Insights

The case involves four appeals filed by the Sarthak Memorial Charitable Trust against the orders of the CIT (Exemption), Jaipur, which had rejected the trust's applications for registration under section 12AB and for approval under section 80G of the Income Tax Act, 1961. The appeals were initially filed with a delay of 23 days, which the tribunal dismissed as having no sufficient cause. However, on merit, the tribunal found that the CIT (Exemption) had not provided adequate opportunity for the trust to be heard, leading to the decision to restore the matter for fresh consideration.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 46105 (ITAT-JAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2025
• 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: BHANWAR SINGH RATNU
• Assessee Lawyers: RAJAT CHOUDHARYM
• Keywords: Condonation of delay; Reasonable cause; Principle of natural justice; Competent authority; Charitable institution; Non compliance
• Section: 12AA; 12A; 80G

Judgement Text

"1 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 Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 1208 & 1209/JP/2024 U/S 12AB of the Act And vk;dj vihy la-@ITA No. 1210 & 1211/JP/2024 U/S 80G of the Act Sarthak Memorial Charitable Trust 28, Burmij Colony Jaipur -302 004 cuke Vs. The CIT (Exemption) Jaipur LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: ABFTS 8006 G vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby : Shri Rajat Choudharym Advocate jktLo dh vksjls@Revenue by: Shri Bhanwar Singh Ratnu, CIT-DR lquokbZ dh rkjh[k@Date of Hearing : 06/03/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement: 12 /03/2025 vkns'k@ORDER PER: DR. S. SEETHALAKSHMI, J.M. These are four appeals filed by the assessee against two different orders of the Ld.CIT (Exemption), Jaipur dated 04-07-2024 passed under section 12AA 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:- 2 ITA NOS.1208 TO 1211/JP/2024 SARTHAK MEMORIAL CHARITABLE TRUST, JAIPUR VS CIT (E), JAIPUR ITA NO. 1208/JP/2024 U/S 12AB of I.T. Act, 1961 ‘’ That the order passed by the ld. CIT(E),Jaipur by rejecting application u/s 12AB(1)(b) of the I.T. Act, 1961 is wrong, unwarranted and bad in law. Kindly direct to register the same. ITA NO. 1209/JP/2024 U/S 12AB of I.T. Act, 1961 1. That the ld. CIT(E), Jaipur has erred in law and in facts of the case by neither recording the independent satisfaction for rejection of provisional registration and nor issued show cause notice for rejection of provisional registration u/s 12A of the Act which is wrong, unwarranted and bad in law. Kindly restore the same. 2. That the ld. CIT(E), Jaipur has erred in law and in facts of the case in rejecting the provisional registration u/s 12A without issuing separate DIN of the rejection order, which is against the circular and notification issued by the CBDT. So, the same is wrong, unwarranted and bad in law. Kindly restore the same. 3. That the order passed by ld CIT(E), Jaipur by rejecting provisional registration u/s 12A of the Act is wrong, unwarranted and bad in law. Kindly restore the same. ITA NO. 1210/JP/2024 U/S 80G of I.T. Act, 1961 1. That the order passed by ld. CIT(E), Jaipur by rejecting application u/s 80G(5)(iii) of the Act is wrong, unwarranted ad bad in law. Kindly direct to register the appellant ITA NO. 1211/JP/2024 U/S 80G of I.T. Act, 1961 1. That the ld. CIT(E), Jaipur has erred in law and in facts of the case by neither recording the independent satisfaction for rejection of 3 ITA NOS.1208 TO 1211/JP/2024 SARTHAK MEMORIAL CHARITABLE TRUST, JAIPUR VS CIT (E), JAIPUR provisional approval and nor issued show cause notice for rejection of provisional approval u/s 80G of the Act which is wrong unwarranted and bad in law. Kindly restore the same. 2. That the ld. CIT(E), Jaipur has erred in law and in facts of the case by rejecting the provisional approval u/s 80G without issuing separate DIN of the rejection order which is against the circular and notification issued by the CBDT. So, the same is wrong, unwarranted and bad in law. Kindly restore the same. 3. That the order passed by ld. CIT(E), Jaipur by rejecting provisional approval u/s 80G(5)(iii) of the Act is wrong, unwarranted and bad in law. Kindly direct to register the same. 2.1 At the outset of the hearing, the Bench noticed that there is delay of 23 days in appeals u/s 12A and in appeals u/s 80G of the Act for which the ld.AR of the assessee has filed an application dated 04-02-2025 for condonation of delay in connection with above mentioned appeals narrating therein as under:- ‘’1. That the assessee trust filed 4 appeals on 25-09- 2024 against the ex-parte order passed by ld. CIT(E), Jaipur on rejection of registration u/s 12A and rejection of approval u/s 80G of the I.T. Act, 1961 with a delay of 23 days. Simultaneously, by the same rejection orders the ld CIT(E), Jaipur cancelled the provisional registration / approval granted by the PCIT/CIT,CPC, hence total 4 appeals were filed, which are as follows:- S.N. Particular Appeal No. 1. Registration Order u/s 12A registration (i.e. u/s 12A(1)(ac)(iii) ITA No. 1208/JPR/24 2. Cancellation order of ITA No. 1209/JPR/24 4 ITA NOS.1208 TO 1211/JP/2024 SARTHAK MEMORIAL CHARITABLE TRUST, JAIPUR VS CIT (E), JAIPUR provisional registration u/s 12A (i.e. u/s 12A(1)(ac)(vi) 3. Rejection order u/s 80G approval (i.e. 80G(5)(iii) ITA No. 1210/JPR/24 4. Cancellation order of provisional approval u/s 80G (i.e. 80G(5)(iv) ITA No. 1211/JPR/24 2. That the delay of 23 days in filing of appeals was due to as there are many recent changes in trust related laws as:- (i) Whether the registration under RPT Act, 1959 is must or not . (ii) Whether, what is the exact legal remedy available to the trust viz. reapply or appeal. (iii) Any many more other issues. 3. That thereafter after taking proper legal advice that the proper remedy with us is to file appeal before ITAT, we engage a counsel and prepare appeal and filed the same before Hon’ble ITAT, Jaipur Bench on 25-09-2024 (i.e. with a delay of 23 days) 4. Therefore, the delay in filing of appeal was due to confusion of non-clarity about the exact and right legal remedy available to the trust viz. reapply or appeal. Therefore, the same can be treated as sufficient cause for delay in filing of appeal. In view of above submission, you are requested that kindly consider this as reasonable cause to condone the delay of 23 days and kindly remand back the case to CIT(E), Jaipur, so that proper inquiry can be conducted and substantial justice may be delivered to the appellant.’’ 5 ITA NOS.1208 TO 1211/JP/2024 SARTHAK MEMORIAL CHARITABLE TRUST, JAIPUR VS CIT (E), JAIPUR 2.2 On the other hand, the ld. DR objected to such delay in filing the appeals by the assessee and submitted that the Court may decide it as deemed fit and proper in the case of the assessee. 2.3 After hearing both the parties and perusing the materials available on record, the Bench noted that there is no force in the submissions of the ld. AR of the assessee as to the conodonation of delay in filing the above appeals. Hence, the Bench does not find sufficient cause whereby the assessee was prevented in late filing the appeals. Thus the applications for condonation of delay made by the assessee are dismissed. However, the Bench feels that with a view to providing the substantial justice to the assessee, the appeals are heard on merit. 3.1 Apropos to the ground so raised by the assessee in ITA Nos. 1208/JP/2024 and 1209/JP/2024, the ld. CIT(E) rejected the assessee’s claim of registration u/s 12AB of the Act by observing as under:- ‘’06. In view of the above discussion assessee’s claim of registration u/s 12AB is liable to be rejected and thus being rejected on following grounds:-  Non submission of deed  Incomplete Form 10AB  Registration under Rajasthan Public Trust Act, 1959  Non Genuineness of Activities and non compliance 6 ITA NOS.1208 TO 1211/JP/2024 SARTHAK MEMORIAL CHARITABLE TRUST, JAIPUR VS CIT (E), JAIPUR 07. Further 12AB(1)(b)(ii)(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 28-02-2023 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. 3.2 Apropos to the ground so raised by the assessee in ITA Nos. 1210 & 1211/JP/2024, the ld. CIT(E) rejected the assessee’s claim of exemption u/s 80G of the Act by observing as under:- ‘’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 4. Further 2nd proviso to Section 80G(5) also state that if CIT is not satisfied has to pass order rejecting such application and also cancelling its earlier approval. Thus, it is clarified that applicant’s provisional approval under clause (iv) of first proviso to sub-section (5) of Section 80G of the Income Tax Act, 1961 dated 28-02-2023 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.’’ 7 ITA NOS.1208 TO 1211/JP/2024 SARTHAK MEMORIAL CHARITABLE TRUST, JAIPUR VS CIT (E), JAIPUR 3.3 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 orders should be quashed being ex- parte orders and against the principles of natural justice. Further, the ld. AR of the assessee stated at Bar that the assessee trust is in the process of applying the registration under RPT Act before the competent authority and it is likely to get the same. 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 as the assessee was ex-parte before the ld. CIT(E) 3.4. Per contra, the ld. DR relied on the orders of the ld. CIT(E). 3.5 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 on following grounds:- * Non submission of deed.  Incomplete Form 10AB  Registration under Rajasthan Public Trust Act, 1959  Non Genuineness of Activities and non compliance. 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 8 ITA NOS.1208 TO 1211/JP/2024 SARTHAK MEMORIAL CHARITABLE TRUST, JAIPUR VS CIT (E), JAIPUR to give proper justification for regularization of provisional registration. It may be noted that the ld.AR of the assessee submitted that the assessee trust has applied for registration under RPT Act, 1959 before the competent authority and the assessee trust is likely to get the same. . 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 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) 3.6 Since we have restored the appeals 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 appeals of the assessee u/s 80G of the Act are consequential in nature. 3.7 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. 9 ITA NOS.1208 TO 1211/JP/2024 SARTHAK MEMORIAL CHARITABLE TRUST, JAIPUR VS CIT (E), JAIPUR 4.0 In the result, the appeals of the assessee are allowed for statistical purposes. Order pronounced in the open court on 12/03/2025 Sd/- Sd/- ¼jkBksM deys'kt;UrHkkbZ ½ ¼MkWa-,l-lhrky{eh½ (RATHOD KAMLESH JAYANTBHAI) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;dlnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 12 /03/2025 *Mishra vkns'k dh izfrfyfivxzsf’kr@Copy of the order forwarded to: 1. The Appellant- M/s. Sarthak Memorial Charitable Trust, Jaipur 2. izR;FkhZ@ The Respondent- The CIT(E), Jaipur 3. vk;djvk;qDr@ The ld CIT 4. foHkkxh; izfrfuf/k] vk;djvihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 5. xkMZQkbZy@ Guard File (ITA No.1208, 1209, 1210 & 1211/JPR/2024) vkns'kkuqlkj@ By order, lgk;diathdkj@Asstt. Registrar "