SHREE KALKA MATAJINA VAHIVAT BADAL SARVJANIK TRUST,MEHSANA V. THE CIT(EXEMPTION), AHMEDABAD

ITA 2213/AHD/2024

AI Insights

The case involves Shree Kalka Matajina Vahivat Badal Sarvjanik Trust, which appealed against the decision of the CIT(Exemption), Ahmedabad, rejecting their application for registration under section 12AB of the Income Tax Act, 1961. The Trust had filed an application stating that it had not commenced any activities and thus had not filed any income tax returns since its inception in 1952. The CIT(Exemption) rejected the application on the grounds of non-maintainability due to the absence of ITRs or other corroborative material. The Tribunal found that the CIT(Exemption) had not adequately verified the genuineness of the Trust or examined its charitable objects and proposed activities, leading to the decision to set aside the CIT(Exemption)'s order and remand the matter for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472290 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A. P. SINGH
• Assessee Lawyers: PRAKASH PATEL
• Keywords: Set aside; Opportunity of being heard
• Section: 12; 10(23C)

Judgement Text

" आयकर अपीलीय अिधकरण, अहमदा बा द \u0012ा यपीठ “सी“, अहमदा बा द । IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD सु\u0017ी सुिच\u0019ा का \u001aले, \u0012ा ियक सद एवं \u0017ी मकरंद वसंत महा देवकर, लेखा सद क े सम\"। ] ] BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER आयकर अपील सं /ITA No.2213/Ahd/2024 िनधा \u0010रण वष\u0010 /Assessment Year : NA Shree Kalka Matajina Vahivat Badal Sarvjanik Trust Maherwada Unjha Kahoda SO, Maherwada, Mehsana – 384 130 (Gujarat) बनाम/ v/s. The CIT(Exemption) Ahmedabad – 380 015 \u0014थायी लेखा सं./PAN: ABITS 2047 N अपीलाथ%/ (Appellant) &' यथ%/ (Respondent) Assessee by : Shri Prakash Patel, AR Revenue by : Shri A.P. Singh, CIT-DR सुनवाई की तारीख/Date of Hearing : 26 /03/2025 घोषणा की तारीख /Date of Pronouncement: 27 /03/2025 आदेश/O R D E R PER MAKARAND V. MAHADEOKAR, AM: This appeal by the assessee is directed against the order passed by the Ld. Commissioner of Income Tax (Exemption), Ahmedabad [hereinafter referred to as “CIT(E)”], dated 23.10.2024, rejecting the application for registration under section 12AB of the Income Tax Act, 1961. Facts of the Case: 2. The assessee trust filed an application in Form No. 10AB on 01.05.2024 seeking registration under section 12AB of the Income Tax Act, 1961. The ITA No.2213/Ahd/2024 Shree Kalka Matajina Vahivat Badal Sarvjanik Trust vs. CIT(E) 2 application was filed under section 12A(1)(ac)(vi) – Item (B), which is applicable in cases where the activities of the trust or institution have not commenced as on the date of the application. 3. In response to the said application, the Ld. CIT(E) issued a notice dated 14.06.2024 requiring the assessee to furnish following details: 1. Details of exemptions claimed under section 11, 12, or section 10(23C), if any, and 2. Copies of ITRs filed for the period post commencement of activities. 3.1. In reply dated 21.08.2024, the assessee submitted \"NA\", stating that the trust was established in 1952 and has never filed income tax returns nor claimed any exemptions under section 11, 12 or section 10(23C) of the Act. The Ld. CIT(E), however, rejected the application on the ground that the assessee had not furnished any ITRs or other corroborative material and held the application as non-maintainable, observing that the trust opted to remain silent and did not show eagerness to establish the genuineness of its claim. 4. Aggrieved by the order of CIT(E), the assessee is in appeal before us with following grounds of appeal: 1. The Ld. CIT-Exemption, Ahmedabad has erred in law in rejecting the application for registration of the trust u/s 12AB of the IT Act on the ground that the appellant failed to furnish ITR / Computation sheet/ Snapshot of e-filing Portal. However, the fact is that the appellant never filed any Income Tax Return since inception of the trust. 2. The appellant craves leave to add, alter or delete any ground either before or in the course of hearing of the appeal. 5. On perusal of the record, it is noted that the assessee trust had duly disclosed that it had not filed any return of income since its inception in 1952 ITA No.2213/Ahd/2024 Shree Kalka Matajina Vahivat Badal Sarvjanik Trust vs. CIT(E) 3 and had also never claimed exemption under section 11, 12 or section 10(23C) of the Act. In light of such disclosure, the application was rightly filed under section 12A(1)(ac)(vi)-Item (B), which governs applications before commencement of activities. 5.1. The Ld. CIT(E), instead of verifying the genuineness of the trust or examining its charitable objects and proposed activities, rejected the application treating it as non-maintainable merely due to absence of ITRs or evidentiary proof. The approach of the Ld. CIT(E) appears to be excessively technical and contrary to the scheme of registration, particularly in a case where the assessee asserts that activities have not commenced. 5.2. It is a settled principle of law that the process of registration under section 12AB of the Act is not an assessment of income, but rather a preliminary stage to examine the genuineness of the trust’s objects and proposed activities. When the trust has explicitly stated that it has not filed returns as it had no activities and thus no income chargeable to tax, it was incumbent upon the Ld. The CIT(E) to evaluate such explanation objectively and to call for any further clarifications or proposed activity plan rather than summarily rejecting the application. 5.3. In our considered view, the interest of justice would be served if the matter is restored to the file of the Ld. CIT(E) for de novo adjudication. The assessee is directed to cooperate in the proceedings and furnish any further details that may be required to ascertain the genuineness of its claim. At the same time, the Ld. CIT(E) shall decide the matter on merits and in accordance with law, after granting due opportunity of being heard. ITA No.2213/Ahd/2024 Shree Kalka Matajina Vahivat Badal Sarvjanik Trust vs. CIT(E) 4 5.4. In view of the foregoing discussion, we set aside the impugned order of the Ld. CIT(Exemption), Ahmedabad dated 23.10.2024 and restore the matter to his file for deciding the application for registration afresh and in accordance with law, after providing adequate opportunity of hearing to the assessee. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 27th March, 2025 at Ahmedabad. Sd/- Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER (MAKARAND V. MAHADEOKAR) ACCOUNTANT MEMBER अहमदाबाद/Ahmedabad, िदनांक/Dated 27 /03/2025 टी.सी.नायर, व.िन.स./T.C. NAIR, Sr. PS आदेश की #ितिलिप अ$ेिषत/Copy of the Order forwarded to : 1. अपीलाथ% / The Appellant 2. #&थ% / The Respondent. 3. संबंिधत आयकर आयु' / Concerned CIT 4. आयकर आयु' ) अपील ( / The CIT(A)-(NFAC), Delhi 5. िवभागीय #ितिनिध , आयकर अपीलीय अिधकरण , राजोकट/DR,ITAT, Ahmedabad, 6. गाड\u0010 फाईल / Guard file. आदेशानुसार/ BY ORDER, स&ािपत #ित //True Copy// सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण, ITAT, Ahmedabad 1. Date of dictation (word processed by Hon’ble AM in his laptop) : 26.3.2025 2. Date on which the typed draft is placed before the Dictating Member. : 27.3.2025 3. Date on which the approved draft comes to the Sr.P.S./P.S : 4. Date on which the fair order is placed before the Dictating Member for pronouncement. : 27.3.25 5. Date on which fair order placed before Other Member : 273.25 6. Date on which the fair order comes back to the Sr.P.S./P.S. : 7. Date on which the file goes to the Bench Clerk. : 8. Date on which the file goes to the Head Clerk. : 9. The date on which the file goes to the Assistant Registrar for signature on the order. : 10. Date of Despatch of the Order : "