SHREE SARVAJANK MUKTIDHAM TRUST SUNDHIA,MEHSANA V. THE CIT(EXEMPTION), AHMEDABAD

ITA 2184/AHD/2024

AI Insights

The case involves Shree Sarvajanik Muktidham Trust, which appealed against the decisions of the CIT (Exemption), Ahmedabad, rejecting their applications for registration under section 12AB and approval under section 80G(5) of the Income Tax Act, 1961. The Tribunal found that the CIT (Exemption) had not provided a fair, adequate, and meaningful opportunity to the Trust to present its case, which is a violation of the principles of natural justice. Consequently, the Tribunal set aside the rejection orders and remanded the matter back to the CIT (Exemption) for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472287 (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: RIGNESH DAS
• Assessee Lawyers: DHRUNAL BHATT; GULAB THAKOR
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice; Charitable institution

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 Nos.2184/Ahd/2024 & 2185/Ahd/2024 िनधा \u0010रण वष\u0010 /Assessment Year : - Shree Sarvajank Muktidham Trust Sundhia At Sundhiya, Vadnagar Mehsana – 384 345 बनाम/ v/s. The CIT (Exemption) Ahmedabad – 380 015 \u0014थायी लेखा सं./PAN: AABTS 8092 G अपीलाथ%/ (Appellant) &' यथ%/ (Respondent) Assessee by : Shri Dhrunal Bhatt & Shri Gulab Thakor, AR Revenue by : Shri Rignesh Das, Sr.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: These two appeals by the assessee are directed against separate orders dated 13.11.2024 and 15.11.2024 passed by the Ld. Commissioner of Income Tax (Exemption), Ahmedabad [hereinafter referred to as \"CIT(Exemption)\"], rejecting the applications of the assessee for registration under section 12AB and approval under section 80G(5) of the Income Tax Act, 1961 [hereinafter referred to as \"the Act\"]. Since the facts and issues arising in both appeals are common, they are being disposed of by this consolidated order for the sake of convenience. ITA Nos.2184 & 2185/Ahd/2024 Shree Sarvajanik Muktidham Trust Asst. Year : 2 2. The assessee has raised following grounds of appeal(s) before us: In ITA No. 2184/Ahd/2024 1. In law and in the facts and circumstances of the case of appellant, the order passed by the Ld. CIT (Exemption), Ahmedabad rejecting application for registration of the trust u/s. 12AB of the Income Tax Act, 1961 is void ab initio and in violation of principles of natural justice hence being bad in law. 2. In law and on the facts and in the circumstances of the case of appellant, the Ld. CIT (Exemption), Ahmedabad has erred in rejecting application for registration of the trust u/s. 12AB of the Income Tax Act,1961. 3. In law and on the facts and in the circumstances of the case of appellant, the Id. CIT (Exemption), Ahmedabad has erred in not granting registration u/s 12AB of the Act to the appellant. 4. The appellant craves leave to add, alter or amend and/or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal. In ITA No. 2185/Ahd/2024 1. In law and in the facts and circumstances of the appellant's case, the order passed by the Ld. CIT (Exemption), Ahmedabad rejecting application for registration of the trust u/s. 80G(5) of the Income Tax Act, 1961 is void ab initio and in violation of principles of natural justice hence being bad in law. 2. In law and on the facts and in the circumstances of the case of appellant, the Ld. CIT (Exemption), Ahmedabad has erred in rejecting application for registration of the trust u/s. 80G(5) of the Income Tax Act, 1961 on the basis of incorrect reasons/ observations. 2.1 In law and on the facts and in the circumstances of the case of appellant, the ld. CIT (Exemption), Ahmedabad has erred in not granting registration u/s 80G(5) of the Act to the appellant on the basis that the appellant has not provided the requisite details even when the appellant has duly filed all the necessary replies in response to notice issued by Ld. CIT(E). 3. The appellant craves leave to add, alter or amend and/or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal. 3. We have perused the material available on record and examined the orders passed by the CIT(Exemption). It is noted that the assessee filed ITA Nos.2184 & 2185/Ahd/2024 Shree Sarvajanik Muktidham Trust Asst. Year : 3 applications in Form No. 10AB for regular registration under section 12AB of the Act and separately for approval under section 80G(5) of the Act. The CIT(Exemption), Ahmedabad, issued only two notices in each case before proceeding to reject the applications. In our considered opinion, issuance of merely two notices—without issuing a final show-cause notice or granting effective opportunity—does not meet the threshold of reasonable opportunity of being heard, especially in the case of a small charitable trust. It is a well-settled principle of natural justice that no adverse order should be passed without affording a fair, adequate, and meaningful opportunity to the affected party. The rejection orders passed under section 12AB and under section 80G(5) of the Act are admittedly premised on alleged non- compliance, but no finding has been recorded that the notices were duly served and that the appellant deliberately failed to comply. 3.1. Moreover, the rejection of the application under section 80G(5) is entirely based on the earlier rejection under section 12AB of the Act. Since we are setting aside the order passed under section 12AB, the consequential rejection under section 80G(5) also cannot be sustained and deserves to be reconsidered on its own merits. 3.2. In view of the above discussion and in the interest of justice, we deem it just and proper to set aside both the impugned orders dated 13.11.2024 (u/s.12AB) and 15.11.2024 (u/s.80G(5)) passed by the CIT(Exemption), Ahmedabad and restore the matters to his file for fresh adjudication after affording reasonable and effective opportunity of being heard to the assessee. The assessee is also directed to comply with any notices issued and to file necessary documents or explanations in support of its applications. ITA Nos.2184 & 2185/Ahd/2024 Shree Sarvajanik Muktidham Trust Asst. Year : 4 4. In the result, both appeals of the assessee are 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(E)-Ahmedabad 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. : 26.3.2025 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. : 5. Date on which fair order placed before Other Member : 6. Date on which the fair order comes back to the Sr.P.S./P.S. : 27.3.25 7. Date on which the file goes to the Bench Clerk. : 27.3.25 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 : "