SHRI AGRASEN SEWA TRUST,MEERUT V. CIT EXEMPTION, LUCKNOW

ITA 626/LKW/2024

AI Insights

The case involves Shri Agrasen Sewa Trust, which appealed against the decision of the CIT(Exemptions), Lucknow, denying their application for registration under section 12A/12AA of the Income Tax Act, 1961 for the assessment year 2024-25. The CIT(E) had rejected the application on the grounds that the trust's activities were not established as charitable and that the trust had not commenced any activities by the end of the financial year 2023-24. The Tribunal found that the CIT(E) had not provided adequate opportunity for the trust to present its case, thus violating the principles of natural justice.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471437 (ITAT-LUCKNOW)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2024-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: REVENUE; MANU CHAURASIA
• Assessee Lawyers: VINOD KUMAR BINDAL
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH “B”, LUCKNOW BEFORE SHRI KUL BHARAT, VICE PRESIDENT AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA No.626/LKW/2024 Assessment Year: 2024-25 Shri Agrasen Sewa Trust 144, Gali no. 3, Thapar Nagar, Meerut, Uttar Pradesh-250001. v. CIT(Exemption) Income Tax Office Lucknow. PAN:ABDTS8544H (Appellant) (Respondent) Appellant by: Shri Vinod Kumar Bindal, C.A. Respondent by: Shri Manu Chaurasia, CIT(DR) O R D E R PER ANADEE NATH MISSHRA, A.M.: This appeal has been filed by the appellant against the order of the Ld. Commissioner of Income Tax (Exemptions), Lucknow (“CIT(E)”, for short) dated 25.09.2024 for the assessment year 2024-25 whereby the Ld. CIT(E) dismissed the assessee’s application for registration under section 12A/12AA of Income Tax Act, 1961 (“Act”, for short). The grounds of appeal of the assessee are as under: - “1. The CIT(E) erred in law and on facts in denying registration u/s 12AB of the Act solely on the ground that the activities of the assessee-trust could not be established as charitable though the CIT(F) has not stated anywhere that the objects of the assessee-trust as copied in the impugned rejection order were not at all charitable. 2. The CIT(E) erred in law and on facts in ignoring that the Trust in its infant stage was in the process of creating infrastructure to carry out its charitable objects and therefore, no activity to meet its charitable objects have commenced till 31/03/2024 as was submitted to the CIT(E) also and mentioned in para no. 5 on page no. 6 of the rejection order. 3. The CIT(E) passed the order in a mechanical manner without considering the replies filed by the assessee and also without giving a reasonable Opportunity of being heard after the CIT(E) became not satisfied with the submissions by giving a mandatory SCN as is mentioned u/s 12AB (1)(b)(i1)(B) of the Act. Therefore, his action of rejecting the ITA No.626/LKW/2024 Page 2 of 4 registration application is perverse in law ab initio. Therefore, the assessee must be granted registration u/s 12AB of the Act as applied. 4. The appellant craves the leave to add, substitute, ‘modify, delete or amend all or any ground of appeal either before or at the time of hearing.” 1.1 In the course of appellate proceedings in Income Tax Appellate Tribunal (“ITAT”, for short), the assessee filed a paper book containing the following particulars: - 2. At the time of hearing before us, the Ld. Authorized Representative (“AR”, for short) for the appellant who joined the hearing in virtual mode, submitted that the Ld. CIT(E) had called for certain details which were partly submitted by the appellant. However, the Ld. AR for the assessee submitted that the Ld. CIT(A) hastily passed the aforesaid impugned appellate order dated 25.09.2024 rejecting the assessee’s application for ITA No.626/LKW/2024 Page 3 of 4 registration under section 12A/12AA of the Act, without providing adequate opportunity to the applicant. The Ld. AR for the appellant further submitted that the hasty order passed by the aforesaid impugned order in undue haste, without providing reasonable opportunity to the applicant, was in clear violation of principles of natural justice. Furthermore, he submitted that the impugned order of the Ld. CIT(E) should be set aside and he should be directed to pass fresh order in accordance with law, after providing reasonable opportunity to the applicant. The Ld. Departmental Representative (“DR”, for short) for Revenue expressed no objection to this request made on behalf of the appellant by the Ld. AR for the appellant. 3. We have heard both sides. We have considered the materials available on record. It is found the Ld. CIT(E) rejected appellant’s application for registration under section 12A/12AA of the Act on the ground that the applicant had failed to file documentary evidences to enable him to satisfy himself about the genuineness and commencement of its charitable activities and to verify whether these activities were in consonance with the objects of the applicant trust. Further, it is found that the Ld. CIT(E) provided only one opportunity on 11.07.2024, to comply with the notice and for furnishing of details called for. Though the appellant partly filed the details called for, the Ld. CIT(E) did not provide any further opportunity to the applicant. In view of the foregoing, and as representatives of both sides are in agreement with this, in the specific facts and circumstances of the present case before us; we are of the view that the applicant deserves further opportunity before the Ld. CIT(E) to present its case. Therefore, we set aside the aforesaid impugned order dated 25.09.2024 of the Ld. CIT(E) and we direct the Ld. CIT(E) to pass ITA No.626/LKW/2024 Page 4 of 4 denovo order in accordance with law, after providing reasonable opportunity to the assessee. In the result, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 18/03/2025. Sd/- Sd/- [KUL BHARAT] [ANADEE NATH MISSHRA] VICE PRESIDENT ACCOUNTANT MEMBER DATED: 18/03/2025 Vijay Pal Singh, (Sr. PS) Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. DR 5. Guard file By order //True Copy// Assistant Registrar "