SHRI VASO BAJKHEDAWAL MANDAL,KHEDA V. THE CIT (EXEMPTION), AHMEDABAD

ITA 2194/AHD/2025

AI Insights

The case involves Shri Vaso Bajkhedawal Mandal, an existing charitable trust, appealing against the decision of the Commissioner of Income Tax (Exemption), Ahmedabad, which rejected their application for registration under section 12AB of the Income-tax Act, 1961, on the grounds of limitation. The Tribunal found that the CIT(E) had incorrectly applied the provisions of section 12A(1)(ac)(iii) by treating the existing trust as a newly formed entity, leading to an erroneous rejection based solely on the timing of the application. The Tribunal referenced similar cases where it was held that applications should not be rejected on technical grounds of limitation but should be examined on their merits.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 848291 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Ahmedabad
• Assessment Year: misc
• Appeal Filed On: 20-11-2025
• Other Referred Cases: Debabrata-Auro Foundation vs. CIT(E), Shrimand Rajchandra Gyanmandir Trust vs. CIT(E)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALPESH PARMAR
• Assessee Lawyers: MEHUL K PATEL
• Keywords: Set aside; Opportunity of being heard

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER I.T.A. No.2194/Ahd/2025 (Assessment Year: NA) Shri Vaso Bajkhedawal Mandal, Vaso Khedawal Mahollo Nadiad, Kheda-387380 Vs. Commissioner of Income Tax (Exemption), Ahmedabad [PAN No.AAIAS6943B] (Appellant) .. (Respondent) Appellant by : Shri Mehul K Patel, Adv. Respondent by: Shri Alpesh Parmar, CIT-DR Date of Hearing 12.03.2026 Date of Pronouncement 25.03.2026 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Exemption), (in short “Ld. CIT(E)”), Ahmedabad vide order dated 25.09.2025. 2. The assessee has taken the following grounds of appeal: “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 registration u/s 12A(1)(ac)(iii) of the Act as filed late and non- maintainable. 2. That on facts and in law, the application made u/s 12A(1)(ac)(iii) of the Act ought to have been granted by learned CIT(Exemption) as prayed for. 3. The appellant craves liberty to add, alter, amend any ground of appeal.” 3. The brief facts of the case are that the assessee had filed an application before the Ld. CIT(Exemptions) seeking registration under section 12AB of Printed from counselvise.com ITA No. 2194/Ahd/2025 Shri Vaso Bajkhedawal Mandal vs. CIT(E) Asst. Year –NA - 2– the Income-tax Act, 1961 (“the Act”). During the course of proceedings before the Ld. CIT(Exemptions), he observed that the application in Form No. 10AB was not filed within the time prescribed under section 12A(1)(ac)(iii) of the Act. The Ld. CIT(Exemptions) proceeded on the basis that the assessee had failed to file the application within six months from the date of commencement of its activities or within the extended time allowed under the relevant CBDT Circular. Accordingly, without going into the merits of the activities of the assessee trust or examining the genuineness of its objects, the Ld. CIT(Exemptions) rejected the application solely on the ground that the same was barred by limitation. 4. The assessee is in appeal before us against the order passed by CIT(Exemptions) dismissing the application of the assessee. 5. We have heard the rival submissions and perused the material available on record. The Counsel for the assessee submitted before us that the trust is an old trust established much prior to the introduction of the new registration regime and has been carrying on charitable activities for several years. It was contended that this is not a case of delay in filing of application, but rather a case where the provisions of section 12A(1)(ac)(iii) of the Act have been wrongly interpreted by the Ld. CIT(Exemptions) by treating an existing trust at par with a newly formed trust. It was further submitted that identical issue has been considered by various co-ordinate benches of the Tribunal wherein it has been consistently held that such applications cannot be rejected merely on technical grounds of limitation and the matter should be restored for examination on merits. Printed from counselvise.com ITA No. 2194/Ahd/2025 Shri Vaso Bajkhedawal Mandal vs. CIT(E) Asst. Year –NA - 3– 6. We find considerable force in the submissions of the assessee. We note that the assessee is an existing trust and not a newly constituted entity. Therefore, the second limb of section 12A(1)(ac)(iii) of the Act, which refers to filing within six months from commencement of activities, would not strictly apply in such cases. The rejection of the application by the Ld. CIT(Exemptions) without examining the objects and genuineness of activities is not in accordance with law. 7. We draw support from the decision of the Mumbai Bench of the Tribunal in the case of Debabrata-Auro Foundation vs. CIT(E), ITA Nos. 7013 & 7014/Mum/2025 dated 12.01.2026, wherein it has been held as under: “Given that it is a case of an existing trust carrying out its activities as evident from its application and not a case of new trust, the second limb of section 12A(1)(ac)(iii) doesn’t apply in the instant case. In light of the same, we set-aside the findings of the Ld. CIT(E) where assessee’s application has been rejected on account of limitation and the matter is remitted to the file of the Ld. CIT(E) to admit the application and decide the same on merits after providing reasonable opportunity to the assessee trust.” 8. We further rely on the decision of the Ahmedabad Bench of the Tribunal in the case of Shrimand Rajchandra Gyanmandir Trust vs. CIT(E), ITA No. 2193/Ahd/2025 dated 28.01.2026, wherein it has been held as under: “The aforesaid provision does not mean that there is any bar on the applicant to move an application before the period of six months from the expiry of the provisional registration. What has been provided is that the application must be made before the expiry of six months from the date of expiry of final registration. There is no bar in moving the application at the earliest possible event… In view of this, the impugned order of the ld. CIT(Exemptions) is set aside and the matter is restored to the ld. CIT(Exemptions) to consider the application of the assessee for final registration and grant the same if the same is otherwise so admissible to the assessee.” Printed from counselvise.com ITA No. 2194/Ahd/2025 Shri Vaso Bajkhedawal Mandal vs. CIT(E) Asst. Year –NA - 4– 9. In light of the above judicial precedents and considering the facts of the present case, we are of the considered view that the rejection of the application by the Ld. CIT(Exemptions) on the ground of limitation is not sustainable. 10. Accordingly, we set aside the impugned order passed by the Ld. CIT(Exemptions) and restore the matter to his file for de novo consideration. The Ld. CIT(Exemptions) is directed to admit the application of the assessee and not treat the same as time barred and decide the same afresh on merits, in accordance with law, after providing adequate opportunity of being heard to the assessee. 11. In the result, the appeal of the assessee is allowed for statistical purposes. This Order is pronounced in the Open Court on 25/03/2026 Sd/- Sd/- (NARENDRA P. SINHA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 25/03/2026 TANMAY, Sr. PS TRUE COPY 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 Printed from counselvise.com "