SAURASHTRA KADVA PATIDAR SEVA SAMAJ,SURAT V. CIT (EXEMPTION), AHMEDABAD

ITA 912/SRT/2024

AI Insights

The case involves Saurashtra Kadva Patidar Seva Samaj, a trust, appealing against the decision of the Commissioner of Income-tax (Exemptions), Ahmedabad, which rejected their application for approval of fund under section 80G(5) of the Income Tax Act, 1961. The primary contention was whether the trust's objectives, which included constructing and maintaining a temple, rendered it ineligible for the tax exemption under the specified section. The Tribunal noted that the Commissioner had not examined the annual accounts of the preceding three years as required by Rule 11AA of the Income Tax Rules, 1962, which led to the decision to remand the case for further examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 29825 (ITAT-SURAT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2024-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVINDER SINDHU
• Assessee Lawyers: SAPNESH R SHETH

Judgement Text

" आयकर अपीलीय अिधकरण, सूरत Ɋायपीठ, सूरत IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. 912/SRT/2024 (AY 2024-25) (Hybrid hearing) Saurashtra Kadva Patidar Seva Samaj, B/S A.S. Motors, Opp. Sandesh Press, A.K. Road, Surat-395 008 [PAN : AAFTS 9782 A] बनाम Vs Commissioner of Income-tax, (Exemption), Ahmedabad-380 015 अपीलाथŎ/Appellant ŮȑथŎ /Respondent िनधाŊįरती की ओर से /Assessee by Shri Sapnesh R Sheth, CA राजˢ की ओर से /Revenue by Shri Ravinder Sindhu– CIT-DR सुनवाई की तारीख/Date of hearing 30.01.2025 उद ्घोषणा की तारीख/Date of pronouncement 03.03.2025 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of Ld. Commissioner of Income-tax(Exemptions)-Ahmedabad [for short to as “Ld.CIT(E)] dated 27.06.2024 in rejecting approval of fund under section 80G(5) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). 2. Rival submission of both the parties have been heard and record perused. The Ld. Authorized Representative (Ld. AR) of the assessee submits that assessee- trust while filing application for approval of fund under section 80G(5) of the Act, provided all necessary information. The Ld.CIT(E) was issued show cause notice dated 26.04.2024, which was responded vide reply dated 10.05.2024. With the reply, the assessee furnished required details. On receipt of such reply a fresh show cause was issued to the assessee vide notice dated 14.06.2024, ITA No.912/SRT/2024 (A.Y.24-25) Saurashtra Kadva Patidar Seva Samaj 2 relevant part of show cause notice is extracted in para-7.2 of impugned order. In the show cause notice, the Ld.CIT(E) noted that one of the object of assessee-trust relates to construct and maintain a temple. The assessee could not reply such notice, the Ld.CIT(E) on the basis of one of the object took his view that object of assessee is partly religious. The Ld. AR of the assessee submits that assessee has not incurred any expenses on such religious activities. Overall object has to be considered while considering the application for approval fund, particularly in accordance with Rule 11AA of Income Tax Rules. The Ld. AR of the assessee submits that assessee has a good case on merit and is likely to succeed if one more opportunity is allowed to explain facts before Ld.CIT(E). 3. On the other hand, Ld. Commissioner of Income-tax-Departmental Representative (Ld.CIT-DR) for the Revenue supported the order of Ld.CIT(E) 4. We have considered the rival contention of both the parties and have gone through order of Ld.CIT(E) carefully. We find that application of assessee for approval of fund was rejected by Ld.CIT(E) by noting that one of the object of assessee-trust is religious in nature. We find that Ld.CIT(E) has not examined annual account of preceding three years as per clause-(g) of sub-rule-2 of Rule11AA of the Income tax Rules, 1962. The said sub-clause-(g) of Rule-11AA to specify that where applicant/trust has been in existence during any year or prior to financial year in which the application for registration is made, the assessee is require to file self-certified copy of annual account of trust prior year or years not more than three years for which, account has been made. In our view, such rules are framed to give a clear picture of the expenditure of the ITA No.912/SRT/2024 (A.Y.24-25) Saurashtra Kadva Patidar Seva Samaj 3 assessee-trust, if any, expenditure is incurred for the object of the trust or if any expenses within the prescribed limit of not more than @ 5% on religious activities is incurred or not. We also find that Ld. AR of the assessee fairly accepted that assessee-trust could not file reply to the show cause notice issued on 14.06.2024 by Ld. CIT(E). Therefore, in the interest of justice, we deem it appropriate to restore the matter back to the file of Ld.CIT(E) to reconsider the application afresh and pass order in accordance with law. Needless to direct that before passing order afresh, the Ld.CIT(E) shall provide reasonable opportunity to the assessee. The assessee is also directed to be more vigilant and to make timely compliance of the notice issued by Ld.CIT(E). With these directions, the grounds of appeal of assessee is allowed for statistical purposes. 5. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 03/03/2025. Sd/- Sd/- (BIJAYANANDA PRUSETH) (PAWAN SINGH) लेखा सद˟/Accountant Member Ɋाियक सद˟/Judicial Member सूरत / Surat Dated: 03/03/2025 Dkp Outsourcing Sr.P.S* आदेश की Ůितिलिप अŤेिषत/ Copy of the order forwarded to :  अपीलाथŎ/ The Appellant  ŮȑथŎ/ The Respondent  आयकर आयुƅ/ CIT By order  िवभागीय Ůितिनिध, / DR, ITAT, SURAT  गाडŊ फाईल/ Guard File // True Copy // सहायक पंजीकार आयकर अपीलीय अिधकरण, सूरत "