SHRI JABRESHWAR EDUCATION CHARITABLE TRUST,ANAND V. THE CIT(EXEMPTION), AHMEDABAD

ITA 1826/AHD/2025

AI Insights

The case involves Shri Jabreshwar Education Charitable Trust, which appealed against the decisions of the CIT(Exemption), Ahmedabad, rejecting their applications for approval under sections 10(23C)(vi) and 80G(5)(iii) of the Income Tax Act, 1961. The CIT(E) had initially rejected these applications based on the presence of non-educational objects in the trust deed and the lack of a valid registration under section 12A or approval under section 10(23C) at the relevant time. The Tribunal found that the CIT(E) had not fully examined the trust's activities or the amendments made to the trust deed and thus restored the matter for a comprehensive re-examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 786819 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 29-09-2025
• Other Referred Cases: New Noble Educational Society v. Chief Commissioner of Income Tax (448 ITR 594), CIT (Exemption) v. Shree Tapeshwar Hanumanji Bajrang Charity Trust (122 taxmann.com 98)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RIGNESH DAS
• Assessee Lawyers: MEHUL K. PATEL
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Reasonable cause; Charitable institution
• Section: 12A; 80G

Judgement Text

"आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण,अहमदाबाद \bयायपीठ अहमदाबाद \bयायपीठ अहमदाबाद \bयायपीठ अहमदाबाद \bयायपीठ ‘C’ अहमदाबाद। अहमदाबाद। अहमदाबाद। अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD ]BEFORE MS. SUCHITRA R. KAMBLE, JUDICIAL MEMBER AND MAKARAND V.MAHADEOKAR, ACCOUNTANT MEMBER ITA No.1825 and 1826 /Ahd/2025 Asstt.Year : - Shri Jabreshwar Education Charitable Trust Chorawalu Faliyu, Vasma Ralej, Khambhat Anand 388 640. PAN : ABGTS 5775 D Vs. The CIT(Exemption) Vejalpur Ahmedabad. (Applicant) (Responent) Assessee by : Shri Mehul K. Patel, AR Revenue by : Shri Rignesh Das, CIT-DR सुनवाई क तारीख/Date of Hearing : 18/11/2025 घोषणा क तारीख /Date of Pronouncement: 19/11/2025 आदेश आदेश आदेश आदेश/O R D E R PER MAKARAND V.MAHADEOKAR, AM: These two appeals filed by the assessee arise out of two separate orders passed by the learned CIT(Exemption), Ahmedabad [hereinafter referred to as “CIT(E)”], both dated 25 December 2024 and 26 December 2024, respectively, relating to the applications made under section 10(23C)(vi) and section 80G(5)(iii) of the Income Tax Act, 1961[hereinafter referred to as “the Act”]. Since the issues involved are interconnected, both appeals were heard together and are being disposed of by this common order. 2. Condonation of Delay 2.1 Both appeals have been filed with a delay of 213 days. In support of the petition for condonation, the assessee has filed duly sworn affidavits of Printed from counselvise.com ITA No.1825 and 1826/Ahd/2025 2 Shri Jignesh Jashbhai Patel, Trustee of the trust, affirming that he is not conversant with the Income Tax procedures, does not operate computers or the income tax portal, and that the trust has no prior experience in income tax litigation. It has been explained that the assessee believed that amendment of the object clause before the Charity Commissioner was sufficient compliance. Only upon consultation with the Chartered Accountant did the assessee come to know that appeals before this Tribunal were required. Thereafter, the matter was entrusted to the advocate at Ahmedabad. 2.2 The delay is explained through bona fide and reasonable cause. The learned Departmental Representative has not raised any objection. For these reasons, and in the interest of substantial justice, the delay of 213 days in both appeals is condoned and the appeals are admitted. 3. Facts of the Case 3.1 The assessee is a trust engaged in running educational institutions at “Jabreshwar Campus” and had earlier been granted provisional approval under section 10(23C)(vi) by order in Form No. 10AC dated 22 May 2023. The assessee filed an application in Form No. 10AB seeking regular approval. 3.2 The learned CIT(E) examined the trust deed and noted that the trust had 19 objects, out of which only 3 objects related to education. The remaining objects permitted activities such as medical camps, blood donation programmes, religious programmes, dharamshalas, cowsheds and other non-educational activities. A show cause was issued on 17 December 2024 to explain how the trust satisfied the statutory requirement of existing solely for educational purposes. 3.3 The assessee submitted that although the trust deed contained several objects, the trust had always been exclusively engaged in educational activities and had not carried out any other activity. It placed Printed from counselvise.com ITA No.1825 and 1826/Ahd/2025 3 on record permissions issued by the Gujarat State Board for running schools at the campus. 3.4 The learned CIT(E), however, concluded that even if presently engaged only in education, the existence of non-educational objects in the trust deed empowered the trust to undertake non educational and religious activities. Relying on the judgment of the Hon’ble Supreme Court in New Noble Educational Society v. Chief Commissioner of Income Tax (448 ITR 594), the CIT(E) held that all objects must relate to education and allied activities. Consequently, he rejected the application in Form 10AB and cancelled the provisional approval granted earlier. 3.5 The assessee filed another application in Form No. 10AB seeking approval under section 80G(5)(iii). The learned CIT(E) observed that the assessee’s earlier application under section 10(23C)(vi) had already been rejected and, therefore, the assessee possessed no valid registration under section 12A or valid approval under section 10(23C) at the relevant time. Placing reliance on the judgment of the Hon’ble Gujarat High Court in CIT (Exemption) v. Shree Tapeshwar Hanumanji Bajrang Charity Trust (122 taxmann.com 98), it was held that approval under section 80G cannot be granted in the absence of subsisting registration. The said application was rejected vide order dated 26 December 2024. 4. Aggrieved by the orders of CIT(E), the assessee is in appeal before us raising following grounds of appeal: In ITA No. 1825/Ahd/2025 - Appeal under section 10(23C)(vi) (1) That on facts, and in law, the learned CIT(Exemptions) Ahmedabad has grievously erred in not granting sufficient and reasonable opportunity to the appellant and in rejecting the application u/s 10(23C)(vi). (2) That on facts, and in law, the learned CIT(Exemptions), Ahmedabad has grievously erred in rejecting the application for registration u/s. 10(23C)(vi) of the Act on erroneous grounds. (3) The appellant craves leave to add, alter, amend any ground of appeal. In ITA No.1826/Ahd/2025 - Appeal under section 80G(5)(iii) Printed from counselvise.com ITA No.1825 and 1826/Ahd/2025 4 (1) That on facts, and in law, the learned CIT(Exemption) has grievously erred in not granting sufficient and reasonable opportunity of hearing and in rejecting the application for approval u/s 80G(5)(iii) of the Act, vide ex-parte order. (2) That on facts and in law, the application made u/s 80G(5)(iii) ought to have been granted by learned CIT(Exemption) as prayed for. (3) The appellant craves leave to add, alter, amend any ground of appeal. 5. The authorised representative submitted that the learned CIT(E) has not examined all facts and has merely reproduced the reply of the assessee in paragraph 4.1 without appreciating that the assessee is exclusively engaged in educational activities. The AR further submitted that the assessee has already taken corrective steps by filing an application before the Charity Commissioner for deletion of all non-educational objects. A copy of the application for amendment of objects was placed on record. It was contended that this material fact was not considered by the CIT(E) before rejecting the approval. 6. The learned Departmental Representative submitted that the CIT(E) has not undertaken full verification of the nature of activities of the trust in the past and that the amendment of the object clause by the assessee now requires fresh factual verification. He fairly submitted that in the interest of justice the matter may be restored to the file of the CIT(E) for re-examination of both applications in accordance with law. 7. We have considered the rival submissions and have perused the orders of the learned CIT(E) along with the documents placed before us. 7.1 It is noted that the assessee has been running educational institutions for several years and has placed on record evidence of permissions granted for its schools. The primary reason for rejection of approval under section 10(23C)(vi) was the presence of non-educational objects in the trust deed. The assessee has now filed an application before the Charity Commissioner to remove all objects that are not exclusively related to education. This development requires verification by the learned Printed from counselvise.com ITA No.1825 and 1826/Ahd/2025 5 CIT(E). Further, the CIT(E) has not recorded any finding regarding the genuineness of activities except relying on the object clause. A comprehensive examination is therefore required. 7.2 Since the approval under section 80G(5)(iii) was rejected only as a consequence of rejection of section 10(23C)(vi) approval, the second appeal is also consequential in nature. Once the first matter is restored, the second must also be reconsidered afresh. 7.3 In view of the above and keeping in mind the principles laid down by the Hon’ble Supreme Court in New Noble Educational Society regarding exclusive educational objects, we consider it appropriate that both matters be restored to the file of the learned CIT(E) for a fresh decision. The learned CIT(E) shall verify the amended objects, examine the past and present activities of the trust, provide adequate opportunity of being heard and pass a reasoned order. 7.4 We clarify that we have not expressed any opinion on the merits of either application. 7.5 The orders passed by the learned CIT(Exemption), Ahmedabad dated 25 December 2024 under section 10(23C)(vi) and dated 26 December 2024 under section 80G(5)(iii) are set aside and both matters are restored to the file of the learned CIT(E) for fresh adjudication in accordance with law after providing due opportunity to the assessee. 8. In the combined result, both appeals filed by the assessee are allowed for statistical purposes. Order pronounced in the Court on 19th November, 2025 at Ahmedabad. Sd/- Sd/- (SUCHITRA R. KAMBLE) JUDICIAL MEMBER (MAKARAND V. MAHADEOKAR) ACCOUNTANT MEMBER Ahmedabad, dated 19/11/2025 Printed from counselvise.com "