SHRI SAINATH EDUCATION & CHERITABLE TRUST,VADODARA V. THE CIT(EXEMPTION), AHMEDABAD

ITA 608/AHD/2025

AI Insights

The case involves Shri Sainath Education & Charitable Trust appealing against the decision of the Commissioner of Income Tax (Exemption), Ahmedabad, which denied the grant of registration under Section 12A of the Income Tax Act, 1961. The primary issue was the incorrect filing under sub-clause (ii) instead of sub-clause (iii) of section 12A(1)(ac). The Tribunal found that the error in citing the sub-clause was not material to the facts of the case and directed the CIT(E) to reconsider the application under the correct sub-clause.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717131 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 24-03-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RIGNESH DAS
• Assessee Lawyers: TEJ SHAH
• Keywords: Reasonable cause
• Section: 11; 12AA; 12A; 12

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. No. 608/Ahd/2025 (िनधा[रण वष[ / Assessment Year : NA) Shri Sainath Education Cheritable Trust A1, Suraj Society, High Tension Road, Subhanpura, Vodadara, Gujarat - 390023 बनाम/ Vs. CIT(Exemption) 609, Aaykar Bhavan, Vejalpur, Anandnagar- Prahladnagar Road, Ahmedabad Öथायी लेखा सं./जीआइआर सं./PAN/GIR No. : AAOTS8962K (Appellant) .. (Respondent) अपीलाथȸ ओर से /Appellant by : Shri Tej Shah, A.R. Ĥ×यथȸ कȧ ओर से/Respondent by : Shri Rignesh Das, CIT. DR Date of Hearing 05/06/2025 Date of Pronouncement 19/08/2025 (आदेश)/ORDER PER SMT. ANNAPURNA GUPTA, AM: The present appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Exemption), (hereinafter referred to as “CIT(E)”), Ahmedabad dated 05.09.2024, denying grant of registration under Section 12A of the Income Tax Act, 1961 (hereinafter referred to as the “Act”). 2. The grounds of appeal raised by the assessee read as under: Printed from counselvise.com ITA No. 608/Ahd/2025 [Shri Sainath Education & Cheritable Trust vs. CIT(E)] - 2 – “1. The Ld. CIT erred in law and in the facts of the case in rejecting the application for registration u/s 10AD of the act. 2. The Ld. CIT erred in law and in the facts of the case in rejecting the provisional registration which was granted earlier. 3. The appellant craves the permissions for making any alteration or addition in the grounds of appeal.” 3. The appeal is delayed for filing by 114 days. The assessee has filed an application before us supported by duly sworn affidavit of the Trustee of the assessee trust explaining the cause of delay, which is reproduced as under: “1. That the impugned order of the CIT(E) was passed and received on email on 05.09.2024 which was operated by our accountant but the accountant was left the job. Therefore, this order was put in our notice on 15.02.2025. Therefore, we have filed the appeal on 24.03.2025. 2. He saw the impugned order on the portal and advised us to file the present appeal. After taking advice from the lawyer based at Ahmedabad, we handed over the necessary papers around 17.02.2025 and the present appeal was filed around 24.03.2025. It is because of the above bonafied reasons that a delay of around 114 days has occurred in filing the present appeal. 3. The applicant submits that the delay caused is not because of any malafide or negligence on the part of the applicant but because of the inaction of the accountant as mentioned above. Therefore, it is kindly requested that the delay of 114 days in filing the present appeal be condoned.” Basis the said application, Ld. Counsel for the assessee pleaded that delay of 114 days in filing of the appeal was on account of the person handling the accounts and tax matters of the assessee Trust leaving the Trust and only thereafter when the new accountant checked the portal that he found the order of the Ld. CIT(E) denying grant of registration to the assessee Trust. That proactive steps were immediately taken and appeal filed to ITAT against the Printed from counselvise.com ITA No. 608/Ahd/2025 [Shri Sainath Education & Cheritable Trust vs. CIT(E)] - 3 – said order, with a delay of 114 days. Ld.Counsel for the assessee pleaded that the delay was not on account of any laxity on the part of the assessee and the assessee did not benefit by not filing appeal. He therefore requested the delay to be condoned. 4. Ld. DR objected to the condonation of delay. 5. Having gone through the application filed by the assessee Trust, duly supported by a sworn affidavit of the Trustee of the Trust, we are convinced that there was sufficient cause for the delay in filing appeal before us and which delay was not attributable to the assessee but was on account of circumstances prevailing which resulted in the order passed by the Ld. CIT(E) not coming to the notice of the concerned persons of the assessee Trust. The assessee Trust has submitted that its accountant who was handling all accounts related matter had left the job when the order was passed, and therefore the Trust was unaware of the passing of the order till it was detected on the portal by a new Accountant. The Revenue has not pointed out any infirmity in the explanation so offered for delay in filing appeal. Moreover, not condoning the delay would result in serious consequences to the assessee Trust, disentitling it to claim exemption of its income, without considering the genuineness of its claim as per law. In the interest of justice therefore, finding sufficient and reasonable cause being furnished by the assessee for the delay of 114 days in the filing of the present appeal before us, we consider it fit to Printed from counselvise.com ITA No. 608/Ahd/2025 [Shri Sainath Education & Cheritable Trust vs. CIT(E)] - 4 – condone the delay. The delay of 114 days in filing of the present appeal before us is accordingly condoned. 6. Taking up the appeal for adjudication, the ground of appeal of the assessee relates to the rejection of application filed seeking registration u/s.12A of the Act. 7. We have noted from the order passed by the Ld. CIT(E) that the assesses application seeking registration u/s 12A of the Act was held non maintainable finding the same to have been filed under incorrect sub clause of section 12A(1)(ac) of the Act. As per the Ld. CIT(E) the assessee had incorrectly filed its application under sub clause (ii), while it ought to have been filed under sub clause (iii) to the said section 12A(1)(ac) of the Act. 8. We have gone through the provisions of section 12A(1)(ac) of the Act which are as under: “Conditions for applicability of sections 11 and 12. 12A. (1) The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely:— . . . . (ac) notwithstanding anything contained in clauses (a) to (ab), the person in receipt of the income has made an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for registration of the trust or institution,— (i) where the trust or institution is registered under section 12A [as it stood immediately before its amendment by the Finance (No. 2) Act, 1996 (33 Printed from counselvise.com ITA No. 608/Ahd/2025 [Shri Sainath Education & Cheritable Trust vs. CIT(E)] - 5 – of 1996)] or under section 12AA [as it stood immediately before its amendment by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (38 of 2020)], within three months from the first day of April, 2021; (ii) where the trust or institution is registered under section 12AB 87[or approved under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10] and the period of the said registration 87[or approval, as the case may be,] is due to expire, at least six months prior to expiry of the said period; (iii) where the trust or institution has been provisionally registered under section 12AB 87[or provisionally approved under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10], at least six months prior to expiry of period of the provisional registration 87[or provisional approval, as the case may be,] or within six months of commencement of its activities, whichever is earlier; (iv) where registration of the trust or institution has become inoperative due to the first proviso to sub-section (7) of section 11, at least six months prior to the commencement of the assessment year from which the said registration is sought to be made operative; (v) where the trust or institution has adopted or undertaken modifications of the objects which do not conform to the conditions of registration, within a period of thirty days from the date of the said adoption or modification; 88[(vi) in any other case, where activities of the trust or institution have— (A) not commenced, at least one month prior to the commencement of the previous year relevant to the assessment year from which the said registration is sought; (B) commenced and no income or part thereof of the said trust or institution has been excluded from the total income on account of applicability of sub-clause (iv) or sub-clause (v) or sub- clause (vi) or sub-clause (via) of clause (23C) of section 10, or section 11 or section 12, for any previous year ending on or before the date of such application, at any time after the commencement of such activities,] and such trust or institution is registered under section 12AB: 89[Provided that where the application is filed beyond the time allowed in sub-clauses (i) to (vi), the Principal Commissioner or Commissioner may, if he considers that there is a reasonable cause for delay in filing the application, condone such delay and such application shall be deemed to have been filed within time;] 9. As is evident from a bare reading of the above, the sub clause lists the different circumstances in which application Printed from counselvise.com ITA No. 608/Ahd/2025 [Shri Sainath Education & Cheritable Trust vs. CIT(E)] - 6 – seeking registration of a Trust is to be made so as to be eligible for grant of exemption of income u/s 11 /12 of the Act. The circumstance listed in sub clause (ii) is where a trust is registered u/s 12AB and the period of registration is due to expire, then application for grant of registration is to be moved as per sub clause (ii) of section 12A(1)(ac) of the Act. Sub Clause (iii) lists the circumstance where provisional registration is granted to the assessee u/s.12AB and the period of the same is about to expire or the assessee has commenced its activities, whichever is earlier. 10. Therefore the only difference in circumstance listed in the two sub clauses is regarding being registered already u/s 12AB of the Act or being provisionally registered under the said section. Dehors the existing fact, the Ld. CIT(E), in both circumstance, has still to verify the genuineness of the assessee Trust vis-a-vis its charitable objects and activities. The mere mentioning of incorrect sub clause has no material impact on the facts of the Trust seeking registration, whose objects and activities still need to be verified by the Ld. CIT(E). The difference in the two situations, we find is not material enough to justify its rejection as non-maintainable merely for having been furnished under an incorrect sub clause. The fact of the Trust being registered or provisionally registered is available with the department, as noted by the Ld. CIT(E) in the present case also. The Ld. CIT(E), we hold, therefore ought to have considered the application as filed in the correct sub clause and proceeded thereafter to decide whether the Trust was eligible to grant of registration u/s 12A of the Act. Printed from counselvise.com ITA No. 608/Ahd/2025 [Shri Sainath Education & Cheritable Trust vs. CIT(E)] - 7 – 11. We therefore are unable to agree with the Ld. CIT(E) that the assesses application is non maintainable merely on account of having been filed under an incorrect sub clause, when the error, we have noted, was not material enough for the purposes of granting registration and the facts relating to the applicability of the correct sub clause were available on record with the Ld.CIT(E). 12. The application of the assessee is therefore restored back to the Ld.CIT(E) with the direction to consider it afresh for grant of registration, treating it as filed by the assessee under the correct sub clause. 13. In the result, appeal of the assessee is, allowed for statistical purposes. This Order pronounced on 19/08/2025 Sd/- Sd/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 19/08/2025 S. K. SINHA True Copy आदेश कȧ Ĥितिलǒप अĒेǒषत/Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant 2. Ĥ×यथȸ / The Respondent. 3. संबंिधत आयकर आयुƠ / Concerned CIT 4. आयकर आयुƠ(अपील) / The CIT(A)- 5. ǒवभागीय Ĥितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड[ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "