SHREE SHARDA SARVAJANIK SEVA MANDAL,AHMEDABAD V. THE CIT(EXEMPTION), AHMEDABAD

ITA 1994/AHD/2024

AI Insights

The case involves Shree Sharda Sarvajanik Seva Mandal, a charitable trust, appealing against the decision of the Commissioner of Income Tax (Exemptions), Ahmedabad, which rejected their application for fresh registration under section 12A(1)(ac)(iii) of the Income Tax Act, 1961, and cancelled their provisional registration. The trust argued that they had provided substantial information in response to earlier notices, but the final notice demanding additional information was issued with an unreasonably short compliance period, which they could not meet due to technological constraints. The Tribunal agreed that the procedural handling of the case was unfair and remanded it back to the CIT(E) for a thorough re-evaluation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 29656 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R.N. DSOUZA
• Assessee Lawyers: ALPESH SHAH
• Keywords: Set aside; Principle of natural justice; Charitable institution
• Section: 22; 12A; 80G

Judgement Text

" आयकर अपीलीय अिधकरण, अहमदाबाद \u0011ायपीठ “ए“,अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “ A ” BENCH, AHMEDABAD \u0016ी िस\u0018ाथ\u001a नौिटयाल, \u0011ाियक सद\u001e एवं \u0016ी मकरंद वसंत महादेवकर, लेखा सद\u001e क े सम$। ] ] BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER AND SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER आयकर अपील सं /ITA No.1994/Ahd/2024 िनधा \u000fरण वष\u000f /Assessment Year : - Shree Sharda Sarvajanik Seva Mandal 12, Mansarovar Complex Juna Vadaj, Ahmedabad – 380 013 बनाम/ v/s. The CIT (Exemption) Ahmedabad \u0013थायी लेखा सं./PAN: AACTS 3569 C (अपीलाथ%/ Appellant) (&' यथ%/ Respondent) Assessee by : Shri Alpesh Shah, CA Revenue by : Shri R.N. Dsouza, CIT-DR सुनवाई की तारीख/Date of Hearing : 20/01/2025 घोषणा की तारीख /Date of Pronouncement: 22 /01/2025 आदेश/O R D E R PER MAKARAND V. MAHADEOKAR, AM: This appeal filed by the assessee arises out of the order passed by the learned Commissioner of Income Tax (Exemptions), Ahmedabad [hereinafter referred to as “CIT(E)”], dated 26.09.2024, under section 12A(1)(ac)(iii) of the Income Tax Act, 1961 [hereinafter referred to as “the Act”]. By the said order, the CIT(E) rejected the application of the assessee for fresh registration and cancelled the provisional registration granted under section 12A of the Act. ITA No. 1994/Ahd/2024 Shree Sharda Sarvajanik Seva Mandal 2 Facts of the Case: 2. The assessee is a charitable trust registered under the Bombay Public Trust Act, 1950, with Registration No. F/111/Gandhinagar, dated 26.09.1989. The trust has been granted registration under sections 12A and 80G of the Income Tax Act, 1961 and has been regularly filing its income tax returns. The assessee filed an application in Form 10AB for fresh registration under section 12A(1)(ac)(iii) of the Act. The CIT(E) issued a notice dated 03.07.2024 and 06.08.2024, seeking specific details. The assessee responded to the said notices on 20.08.2024 by furnishing the information, along with supporting documents such as the trust deed, audited financial statements, Form 10BB, bank statements, and a note on activities, etc. The CIT(E) issued a subsequent notice dated 18.09.2024, digitally signed at 07:11 PM, requiring the assessee to furnish additional details by 20.09.2024. The assessee did not respond to the notice dated 18.09.2024. The CIT(E) passed an order dated 26.09.2024, rejecting the application for registration under section 12A(1)(ac)(iii) of the Act and cancelling the provisional registration granted earlier under section 12A. 3. Aggrieved by the order of CIT(E), the assessee is in appeal before us with following grounds of appeal: “1. The learned Commissioner of Income Tax erred in law and on facts in rejecting the application for the registration of trust u/s 12A of the Act. 2. The learned Commissioner of Income Tax ought to have granted the registration us 12A of the Act since the necessary details and information were filed in due course.” ITA No. 1994/Ahd/2024 Shree Sharda Sarvajanik Seva Mandal 3 3. During the course of hearing before us, the Authorized Representative (AR) of the assessee submitted that the assessee had responded to the earlier notice and submitted substantial details, including the audit report, bank statements, trust deed, Form 10BB, and a note on activities. The AR further pointed out that the notice dated 18.09.2024 provided less than two days to respond, which was insufficient, particularly as the trustees were not conversant with modern technologies such as email and digital notices, and this procedural difficulty further constrained their ability to respond promptly. The AR argued that the rejection was procedurally unfair and requested that the matter be remanded back to the CIT(E) for fresh adjudication after granting a reasonable opportunity to the assessee. 4. The Departmental Representative (DR) accepted that no proper opportunity was given to the assessee and agreed that the matter should be restored to the file of the CIT(E) for fresh adjudication. 5. We have carefully perused the submissions of the assessee, the order of the CIT(E), and the materials on record. The assessee responded to the notice by submitting the audit report, trust deed, Form 10BB, bank statements, and a note on activities. These submissions were not evaluated in detail in the impugned order. The notice dated 18.09.2024, issued digitally at 07:11 PM, provided less than two days for compliance (till 20.09.2024). This timeframe is unreasonably short, particularly for a charitable trust with trustees unfamiliar with digital technologies. Such a short duration fails to provide a fair opportunity to the assessee to comply, amounting to a violation of the principles of natural justice. The rejection of the application and cancellation of the provisional registration without a proper evaluation of ITA No. 1994/Ahd/2024 Shree Sharda Sarvajanik Seva Mandal 4 submissions and without granting adequate time to respond are procedural lapses that render the order unsustainable. 6. Considering the above findings, we are of the view that the order of the CIT(E) dated 26.09.2024 suffers from procedural infirmities and is not in accordance with the principles of natural justice. Therefore, the order is liable to be set aside. 7. We hereby set aside the order of the CIT(E) and restore the matter to his file with the following directions: 1. The CIT(E) shall duly consider the submissions and documents already filed by the assessee in response to earlier notices. 2. The CIT(E) shall grant a reasonable and adequate opportunity to the assessee to furnish any additional details required. 3. The CIT(E) shall pass a reasoned and speaking order after evaluating all the facts and submissions in light of applicable laws. 7.1. The assessee is also directed to cooperate with the CIT(E) in the fresh proceedings and furnish the required documents promptly. 8. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 22nd January, 2025 at Ahmedabad. Sd/- Sd/- (SIDDHARTHA NAUTIYAL) JUDICIAL MEMBER (MAKARAND V. MAHADEOKAR) ACCOUNTANT MEMBER अहमदाबाद/Ahmedabad, िदनांक/Dated 22/01/2025 ITA No. 1994/Ahd/2024 Shree Sharda Sarvajanik Seva Mandal 5 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 , अिधकरण अपीलीय आयकर , राजोकट/DR,ITAT, Ahmedabad, 6. गाड\u000f 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) : 20.1.2025 2. Date on which the typed draft is placed before the Dictating Member. : 20.1.2025 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. : 22.1.25 7. Date on which the file goes to the Bench Clerk. : 22.1.25 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 : "