SHREEJI JANSEVA KHANDI GRAMODHYOG SANGH,AHMEDABAD V. THE CIT(EXEMPTION), AHMEDABAD

ITA 92/AHD/2025

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The case involves Shreeji Janseva Khandi Gramodyog Sangh, a charitable trust, which appealed against the decision of the Commissioner of Income Tax (Exemptions), Ahmedabad. The CIT(E) had rejected the trust's application for registration under section 12A of the Income Tax Act, 1961, and cancelled its provisional registration, citing non-compliance in responding to notices and insufficient evidence of the trust's activities and compliance with legal requirements. The Tribunal noted the trust's long-standing charitable activities and previous registrations, and found that the rejection was primarily based on technical grounds rather than substantive issues regarding the trust's activities.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772657 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: misc
• Other Referred Cases: CIT v. Dawoodi Bohra Jamat (364 ITR 31), New Noble Educational Society v. CIT (448 ITR 594)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P RASTOGI
• Assessee Lawyers: ALPESH SHAH
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice; Charitable institution
• Section: 12A

Judgement Text

" आयकर अपीलीय अिधकरण, अहमदाबाद Ɋायपीठ “B”, अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD ŵी संजय गगŊ, Ɋाियक सद˟ एवं ŵीमकरंद वसंत महादेवकर, लेखा सद˟ क े समƗ। BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER I.T.A. No.92/Ahd/2025 (Assessment Year: N.A.) Shreeji Janseva Khandi Gramodyog Sangh, 11, Vijay House, Navawadaj, Ahmedabad-380013 Vs. Commissioner of Income Tax (Exemption), Ahmedabad [PAN No.AABTS0887L] (Appellant) .. (Respondent) Appellant by : Shri Alpesh Shah, C.A. Respondent by: Shri R P Rastogi, CIT DR Date of Hearing 21.08.2025 Date of Pronouncement 26.08.2025 O R D E R PER MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER: This appeal by the assessee is directed against the order passed by the learned Commissioner of Income Tax (Exemptions), Ahmedabad [hereinafter referred to as “CIT(E)”] in Form No. 10AD dated 13.11.2024, whereby the application of the assessee in Form No. 10AB seeking registration under section 12A of the Income Tax Act, 1961 [hereinafter referred to as “the Act”] was rejected and the provisional registration earlier granted was cancelled. Printed from counselvise.com ITA No. 92/Ahd/2025 Shreeji Janseva Khandi Gramodyog Sangh vs. CIT(E) Asst.Year –N.A. - 2– Facts of the case 2. The assessee is a charitable trust registered under the Bombay Public Trust Act, 1950 vide registration No. F/1209, Ahmedabad dated 05.03.1987. The assessee was earlier granted registration under section 12A of the Act. The assessee was also granted provisional registration on 23.06.2022. The assessee filed an application for registration of trust under section 12A of the Act in Form No. 10AB, accompanied with audit reports, audited balance sheet, profit and loss account for the preceding three years. 3. Thereafter, the CIT(E) issued notices dated 04.09.2024 and 24.10.2024 calling for further details. As recorded in the impugned order, the assessee did not file any reply to the said notices. The CIT(E) observed that in the absence of documentary evidence, he was not satisfied with: (i) genuineness of the activities of the trust, (ii) whether the activities are in consonance with the objects of the trust and (iii) whether other laws material for achieving the objects were complied with. 4. Placing reliance on the judgments of the Hon’ble Supreme Court in CIT v. Dawoodi Bohra Jamat (364 ITR 31) and New Noble Educational Society v. CIT (448 ITR 594), the CIT(E) rejected the Printed from counselvise.com ITA No. 92/Ahd/2025 Shreeji Janseva Khandi Gramodyog Sangh vs. CIT(E) Asst.Year –N.A. - 3– application in Form 10AB and also cancelled the provisional registration. 5. Aggrieved by the order of CIT(E), the assessee is in appeal before us raising following grounds of appeal: 1. The learned CIT (Exmp) has erred in law and on facts in rejecting the application filed in Form 10AB of the Act and also cancelling the provisional registration. 2. The Ld. CIT(Exmp) has erred in law and facts in rejecting the Application u/s 12A in spite of the fact that the officials of the Trust being novice and ignorant about the technicalities of Email and website. Hence the order rejecting the application should be cancelled. 3. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of appeal. 6. The learned Authorised Representative submitted that the trust is a genuine charitable organisation registered since 1987 under the Bombay Public Trust Act and has already been granted registration under section 12A earlier. The AR emphasised that the assessee is engaged in the activity of manufacturing and trading in Khadi and allied products, which are genuine charitable activities. This is supported by audited financial statements. The AR further submitted that the subsequent notices dated 04.09.2024 and 24.10.2024 were not properly attended to, as the trustees were inexperienced in handling electronic communications and portal compliance. The non-compliance was therefore inadvertent and not deliberate. Printed from counselvise.com ITA No. 92/Ahd/2025 Shreeji Janseva Khandi Gramodyog Sangh vs. CIT(E) Asst.Year –N.A. - 4– 7. It was submitted that rejection solely on technical grounds is contrary to the benevolent intent of section 12AB and the principles laid down by courts. The AR therefore prayed that the matter may be restored to the file of the CIT(E) for fresh adjudication on merits after giving adequate opportunity. 8. The learned Departmental Representative relied upon the order of the CIT(E). However, he fairly submitted that he has no objection if the matter is restored back to the file of the CIT(E) for consideration afresh, subject to the assessee furnishing all requisite documents. 9. We have considered the rival submissions and perused the material on record. The undisputed facts are that the assessee is a registered charitable trust, was earlier granted registration under section 12A, and had also been granted provisional registration under section 12AB upon filing Form 10AB. 10. The rejection of the application by the CIT(E) is solely on account of non-furnishing of details in response to notices dated 04.09.2024 and 24.10.2024. We note that there is no adverse finding by the CIT(E) either on the charitable nature of objects of the trust or the genuineness of its activities. 11. It is settled law that provisions relating to exemption of charitable institutions are benevolent in nature and should be interpreted liberally to advance the object of charity. The Hon’ble Printed from counselvise.com ITA No. 92/Ahd/2025 Shreeji Janseva Khandi Gramodyog Sangh vs. CIT(E) Asst.Year –N.A. - 5– Supreme Court in CIT v. Dawoodi Bohra Jamat (364 ITR 31) has laid down that the Commissioner must record satisfaction on genuineness of activities and objects, and registration cannot be denied on technical grounds alone without such examination. 12. In the present case, the assessee has explained that the lapse occurred due to lack of technical knowledge of the trustees in handling electronic notices and portal compliance. Considering the bona fide explanation, and in the interest of natural justice, we are of the considered view that one more opportunity ought to be granted to the assessee. 13. Accordingly, we set aside the impugned order of the CIT(E) and restore the matter back to his file with the direction to examine the application of the assessee afresh on merits, after affording adequate opportunity of being heard. The assessee is directed to cooperate fully and furnish all requisite documents to establish the genuineness of its activities and compliance with statutory requirements. 14. In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 26/08/2025 Sd/- Sd/- (SANJAY GARG) JUDICIAL MEMBER (MAKARAND V. MAHADEOKAR) ACCOUNTANT MEMBER Ahmedabad; Dated 26/08/2025 Manish TRUE COPY Printed from counselvise.com ITA No. 92/Ahd/2025 Shreeji Janseva Khandi Gramodyog Sangh vs. CIT(E) Asst.Year –N.A. - 6– आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 22.08.2025(Dictated on dragon software by Hon’ble Member) 2. Date on which the typed draft is placed before the Dictating Member 22.08.2025 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S .08.2025 5. Date on which the fair order is placed before the Dictating Member for pronouncement .08.2025 6. Date on which the fair order comes back to the Sr.P.S./P.S 26.08.2025 7. Date on which the file goes to the Bench Clerk 26.08.2025 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 Dispatch of the Order…………………………………… Printed from counselvise.com "