SHREE KUTCHI JAIN GURJAR MANDAL,MUMBAI V. CIT (EXEMPTION)-, MUMBAI

ITA 3551/MUM/2025

AI Insights

The case involves the Shree Kutchi Jain Gurjar Mandal, a society, appealing against the decision of the Commissioner of Income Tax (Exemption), Mumbai, which rejected their application for registration under section 12AB of the Income Tax Act, 1961. The CIT(Exemption) had rejected the application citing non-compliance with procedural mandates and substantive violations of the Act, specifically section 13(1)(b) and section 12AB(4). The tribunal noted that the CIT(Exemption) had not adequately considered the assessee's submissions and had not provided a reasonable opportunity for the assessee to be heard, leading to the decision to remand the case for a fresh evaluation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717023 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: misc
• Appeal Filed On: 21-05-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RITESH MISHRA
• Assessee Lawyers: K GOPAL AW
• Keywords: Set aside; Opportunity of being heard
• Section: 11; 12AA; 12A

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ मुंबई मɅ। IN THE INCOME TAX APPELLATE TRIBUNAL, “E” BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.3551/MUM/2025 Ǔनधा[रण वष[ / Assessment Year :2025-26 Shree Kutchi Jain Gurjar Mandal Flat No.3, Plot No.08, Aakash Bldg. Mumbai, Rajawadi, Mumbai-400 077 PAN : AAPTS7890H ........अपीलाथȸ / Appellant बनाम / V/s. The Commissioner of Income Tax (Exemption), Mumbai ……Ĥ×यथȸ / Respondent Assessee by : Shri K Gopal a/w. Ms. Neha Paranjpe Revenue by : Shri Ritesh Mishra, CIT-DR सुनवाई कȧ तारȣख / Date of Hearing :14.08.2025 घोषणा कȧ तारȣख / Date of Pronouncement : 20.08.2025 Printed from counselvise.com 2 Shree Kutchi Jain Gurjar Mandal Vs. CIT(Exemption) ITA No. 3551/MUM/2025 आदेश / ORDER PER ARUN KHODPIA, AM: The present appeal filed by the assessee society is directed against the order passed by the Ld. CIT(Exemption), Mumbai dated 25.03.2025 u/s. 12A/12AA/12AB of the Income Tax Act, 1961 (for short ‘the Act’) as per the following grounds of appeal: “1. The Commissioner of Income Tax (Exemption) (hereinafter referred to as the CIT(E)] erred in passing an order dated 25.03.2025 by rejecting, the application seeking registration under section 12AB of the Act without affording the Assesee a reasonable opportunity of being heard and considering the submissions filed on 03.02.2025 and 25.03.2025 respectively. Thus, the order dated 25.03.2025 is not justified and the same mat be set aside. 2. The CIT (E) failed to appreciate that the Appellant has duly submitted all the relevant documents which are necessary for granting registration under section 12AB of the Act. Thus, the order dated 25.03.2025 passed by the CIT(E) by rejecting the registration under section 12AB of the is not justified and the same may be quashed and set aside. 3. The Appellant seeks leave to add, alter and amend the abase grounds whenever required.” 2. The Ld. CIT(Exemption), Mumbai had rejected the application of the assessee society for grant of registration u/s.12AB of the Act,under the following observations: “1. M/s Shree Kutchi Jain Gurjar Ghatkopar (hereinafter 'the applicant) filed an application in Form 10AB u/s 12A(1)(ac)(vi)(B) seeking registration under section 12AB of the Act. 2. The relevant procedural mandate is governed by the provisions of Rule 17A of the IT Rules which is titled \"Application for registration Printed from counselvise.com 3 Shree Kutchi Jain Gurjar Mandal Vs. CIT(Exemption) ITA No. 3551/MUM/2025 of charitable or religious trusts, etc.\". The sub rule (2) of Rule 17A mandates that the application in Form 10AB is to be accompanied by specific documents, and the same is reproduced as under. \"(2). The application under sub-rule (1) shall be accompanied by the following documents, as required by Form No. 10A or 10AB, as the case may be namely:- (a) Where the applicant is created, or established, under an instrument. self-certified copy of such instrument creating or establishing the applicant; (b) Where the applicant is created, or established, otherwise than under an instrument, self-certified copy of the document evidencing the creation or establishment of the applicant; (c) Self- certified copy of registration with Registrar of Companies or Registrar of Firms and Societies or Registrar of Public Trusts, as the case may be; (d) Self-certified copy of registration under Foreign Contribution (Regulation) Act, 2010 (42 of 2010), if the applicant is registered under such Act; (e) Self- certified copy of existing order granting registration under section 12A or section 12AA or section 12AB, as the case may be; (f) Self- certified copy of order of rejection of application for grant of registration under section 12A or section 12AA or section 12AB, as the case may be, if any; (g) Where the applicant has been in existence during any year or years prior to the financial year in which the application for registration is made, self-certified copies of the annual accounts of the applicantrelating to such prior year or years (not being more than three years immediately preceding the year in which the said application is made) for which such accounts have been made up, (h)Where a business undertaking is held by the applicant as per the provisions of sub- section (4) of section 11 and the applicant has been in existence dung any year or years prior to the financial Year in which the application for registration is made. self- Certified copies of the annual accounts of such business undertaking relating to such prior year or years (not being more than three years immediately preceding the year in which the said application is made) for which such accounts have been made up and self-certified copy of the report of audit as per the provisions of section 44AB for such period; Printed from counselvise.com 4 Shree Kutchi Jain Gurjar Mandal Vs. CIT(Exemption) ITA No. 3551/MUM/2025 (i)Where the income of the applicant includes profits and gains of business as per the provisions of sub- section (4A) of section 11 and the applicant has been in existence during any year or years prior to the financial year in which the application for registration is made, self- certified copies of the annual accounts of such business relating to such prior year or years (not being more than three years immediately preceding the year in which the said application is made) for which such accounts have been made up and self-certified copy of the report of audit as per the provisions of section 44AB for such period: (j) Note on the activities of the applicant:- 2. On verification of the application in Form 10AB filed by the applicant, it was found that the application was not complete, and all the documents required to be accompanying the application were not furnished. Hence, a notice was issued to the applicant vide DIN & Notice No. ITBA/EXM/F/EXM43/2024- 25/1072457312(1) dated 23.01.2025 requesting the applicant to furnish the complete set of documents mentioned in Rule 17A(2). In response. the applicant has made submission online on 03.02.2025. After going through the submissions, it is noticed that as per point no. 4 of the trust deed/MOA, the trust is involved in activities which is favoring a particular religious community \"Kutchi Gurjar Jain Community\". This is in violation of section 13(1)(b) of the Income tax Act ('the Act' hereafter) and is also defined as violation as per clause (d) of explanation to section 12AB(4) of the Act. 3. In view of the same, showcause was issued to the applicant in this regard and other information like proof of activities and expenditure on objects of the trust alongwith bank statement was also called for vide DIN & Notice No. ITBA/EXM/F/EXM43/2024- 25/1073891442(1) dated 01.03.2025. However, no response is received. Again, a final opportunity was provided vide DIN & Notice No. ITBA/EXM/F/EXM43/2024-25/1074689512(1) dated 19.03.2025 to comply with the above-mentioned notices. However, the applicant failed to reply to any of the above-mentioned notices. 4. Registration under section 12AB is to be granted in terms of the provisions of section 12AB(1)(b) of the Act after being satisfied about the objects of the trust or institution, the genuineness of activities, and the compliance of any other law for the time being in force as are material for the purposes of achieving its objects. In the absence of necessary compliance by the Applicant, the undersigned is unable to arrive at a satisfactory conclusion on these parameters and is left with no other option but to reject the application seeking registration under section 12AB of the Act. Printed from counselvise.com 5 Shree Kutchi Jain Gurjar Mandal Vs. CIT(Exemption) ITA No. 3551/MUM/2025 5. In conclusion, this application for grant of registration stands rejected.” 3. At the very outset, the Ld. Counsel for the assessee society submitted that the Ld. CIT(Exemption) had rejected the application for granting registration u/s.12AB of the Act without affording a reasonable opportunity of hearing to the assessee and without considering the submissions filed by the assessee on 03.02.2025 and 25.03.2025. Therefore, it was submitted by the Ld. Counsel that one final opportunity may be provided to the assessee so that the assessee society can represent its case on merits referring the submissions which were filed on 03.02.2025 and 25.03.2025, but could not be substantiated as no further opportunity of clarification was granted. 4. The Ld. Sr. DR on the other hand vehemently supported the order of Ld CIT(E), but has fairly conceded to the request of assessee, if the matter be restored back for denovoadjudication on merits to the Ld. CIT(E), providing one final opportunity to the assessee. 5. We have carefully considered the contents in the documents/material available on record and submissions of both the parties. On a perusal of the order of the Ld. CIT(Exemption), it transpires that at Para 4 of its order, it is mentioned that “…….In the absence of necessary compliance by the Applicant, the undersigned is unable to arrive Printed from counselvise.com 6 Shree Kutchi Jain Gurjar Mandal Vs. CIT(Exemption) ITA No. 3551/MUM/2025 at a satisfactory conclusion on these parameters and is left with no option but to reject the application seeking registration under section 12AB of the Act”. Though the submissions of assessee dated 03.02.2025 was considered by the Ld. CIT(E), but there was no whisper in his order about the assessee’s submission dated 25.03.2025, accordingly the application of assessee has been rejected without considering the response of assessee dated 25.02.2025. Accordingly, we are of the considered opinion that the application for grant of registration of the assessee has been rejected by the Ld. CIT(Exemption), without affording reasonable opportunity of representation, therefore, in the interest of substantial justice, as fairly agreed by both the parties, the impugned order is set aside to be revisited by the Ld. CIT(Exemption) with a direction to afford reasonable opportunity of being heard to the assessee society. 6. In the result, appeal of the assessee society is allowed for statistical purposes, in terms of our aforesaid observations. Order pronounced in the open court on 20th August, 2025. Sd/- Sd/- AMIT SHUKLA ARUN KHODPIA (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) मुंबई/Mumbai; Ǒदनांक / Dated : 20th August, 2025. SB, Sr.PS (on Tour) आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ /The Appellant. Printed from counselvise.com 7 Shree Kutchi Jain Gurjar Mandal Vs. CIT(Exemption) ITA No. 3551/MUM/2025 2. Ĥ×यथȸ /The Respondent. 3. आयकरआयुÈत/The CIT, Mumbai 4. Ĥधानआयकर आयुÈत/ Pr.CIT, Mumbai 5.ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,मुंबईबɅच, मुंबई/DR, ITAT, Mumbai Benches, Mumbai. 6.गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // उप/सहायक पंजीकार )Dy./Asstt. Registrar) आयकर अपीलȣय अͬधकरण, मुंबई/ ITAT, Mumbai. Printed from counselvise.com "