SRI SHIRDI SAINADH SPIRITUAL CENTRE,KOVVUR V. ITO WARD-1, TANUKU

ITA 169/VIZ/2025

AI Insights

The appeals by Sri Shirdi Sai Nigamagamam Maintenance Trust and Sri Shirdi Sainadh Spiritual Centre were against the rejection of their applications for registration under Section 12A of the Income Tax Act, 1961, by the CIT (Exemptions), Hyderabad. The CIT (E) had rejected the applications on the grounds that the activities of the trusts were not commensurate with their objectives as per the Trust Deeds. The Tribunal, after reviewing the submissions and activities of the trusts, found that the CIT (E) had not provided a speaking order and had not properly considered the evidence and documents submitted by the trusts. Consequently, the Tribunal set aside the CIT (E)'s order and directed the grant of registration under Section 12A.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 633192 (ITAT-VISAKHAPATNAM)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2024-2025
• Other Referred Cases: CIT vs. Andhra Pradesh State Road Transport Corporation, Surat Art Silk Cloth Manufacturers Association vs. CIT, CIT vs. Gujarat Maritime Board, M/s. We are with you Charitable Trust vs. CIT (Exemptions)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Reasonable cause; Principle of natural justice; Charitable institution; Procedural lapse
• Section: 12A

Judgement Text

"आयकरअपीलीयअधिकरण, धिशाखापटणमपीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM “DIVISION” BENCH, VISAKHAPATNAM श्री वी. दुर्गा रगव, न्याधयक सदस्य, एिं श्री एस बालाक ृष्णन, लेखा सदस्य क ेसमक्ष BEFORE SHRI V. DURGA RAO, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकरअपीलसं./I.T.A. No.168/Viz/2025 Sri Shiridi Sai Nigamagamam Maintenance Trust, Kovvuru, West Godavari- 534350, Andhra Pradesh. PAN: ABFTS0220A v. Income Tax Officer, Exemption Ward, Rajahmundry, Andhra Pradesh. (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) आयकरअपीलसं./I.T.A. No.169/Viz/2025 Sri Shirdi Sainath Spiritual Centre, 12-3-21, Three Dabas Street, Kovvur – 534350, Andhra Pradesh. PAN: AAITS1539E v. Income Tax Officer, Ward-1, Tanuku, Andhra Pradesh-534211. (अपीलगर्थी/ Appellant) (प्रत्यर्थी/ Respondent) करदाताकाप्रतततितित्व/ Assessee Represented by : None राजस्वकाप्रतततितित्व/ Department Represented by : Dr. Satyasai Rath, CIT-DR सुिवाईसमाप्तहोिेकीततति/ Date of Conclusion of Hearing : 02/06/2025 घोषणगकीतगरीख/Date of Pronouncement : 09/06/2025 ITA Nos. 168 & 169/Viz/2025 Sri Shirdi Sai Nigamagamam Maintenance Trust & Sri Shirdi Sainadh Spiritual Centre Page No. 2 आदेश /O R D E R PER V. DURGA RAO, JM: The captioned appeals filed by the assessee are directed against the rejection order passed by the learned CIT (E)- Hyderabad (hereinafter in short “Ld CIT(E)” vide DIN & Notice No. ITBA/EXM/F/EXM45/2024-25/1072492553(1) & ITBA/EXM/ F/EXM45/2024-25/1072443582(1), dated 24/01/2025 and 23/01/2025 respectively. Since the core issue involved in these appeals is identical therefore, both these appeals are clubbed, heard together and disposed of in this consolidated order. We shall first take up ITA No. 168/Viz/2025 as a lead appeal. ITA No. 168/Viz/2025 (Sri Shiridi Sai Nigamagamam Maintenance Trust) 2. Briefly stated facts of the case are that the assessee has filed an e- application in Form No.10AB seeking registration U/s. 12AB of the I.T. Act, 1961 (in short “Act”). The Learned CIT (E) issued notice to the assessee on 10/10/2024 in respect of proceedings U/s. 12A(1)(ac)(iii) of the Act to produce the copy of Memorandum of Association/Trust Deed for verification and to furnish a detailed reply on the specific information called for in the said notice. In response, assessee has submitted some of the details as called for. Subsequently, another notice dated 20/12/2024 was issued to the assessee to submit the full information ITA Nos. 168 & 169/Viz/2025 Sri Shirdi Sai Nigamagamam Maintenance Trust & Sri Shirdi Sainadh Spiritual Centre Page No. 3 as per the notices issued. In response, assessee furnished its reply in compliance to the notice issued by the learned CIT (E). On a perusal of the submission of the assessee, learned CIT (E) rejected the application filed in Form-10AB for registration U/s. 12A of the Act. 3. Aggrieved by the rejection order, the assessee filed the present appeal before us by raising following grounds of appeal: “1. The CIT (Exemptions) erred in rejecting the application for registration U/s. 12A solely on the ground that the activities of the Trust are not commensurate with the objectives of the Trust Deed. The Trust has provided sufficient documentary evidence, including financial statements, daily activities, and detailed explanations to substantiate the genuineness of its charitable activities. 2. The CIT(Exemptions) wrongly concluded that the activities of the Trust fall under the category of “advancement of any other object of general public utility” and that they involve trade or commerce. The Trust has demonstrated that it provides services at a minimal cost or free of charge, thereby fulfilling the charitable purpose as per section 2(15) of the Act. 3. The Trust has undertaken multiple charitable activities, including providing a function hall at a minimal cost for the poor, distributing free books to students, conducting yoga classes, providing free purified water, and offering free shelter to pilgrims. These activities are fully aligned with the Trust’s objectives as per the registered Trust Deed. 4. The CIT(Exemptions) did not provide adequate opportunity to explain or rectify alleged deficiencies in the documentation, violating the principles of natural justice. All requested documents were submitted during the proceedings, but the rejection order was passed without proper consideration of the submissions. 5. The delay in filing Form 10AB was marginal (seven days beyond the deadline of 30/06/2024, provided under Circular No. 7/2004 issued), and the Trust had a reasonable cause for the delay, as the procedural complexities led to confusion. Several case laws establish that procedural lapses should not result in denial of substantive benefits. 6. Assessee has relied on case laws (i) CIT vs. Andhra Pradesh State Road Transport Corporation (ii) Surat Art Silk Cloth Manufacturers Association vs. CIT (iii) CIT vs. Gujarat ITA Nos. 168 & 169/Viz/2025 Sri Shirdi Sai Nigamagamam Maintenance Trust & Sri Shirdi Sainadh Spiritual Centre Page No. 4 Maritime Boad (iv) M/s. We are with you Charitable Trust vs. CIT (Exemptions). 7. That the appellant craves leave to add, alter, amend, or withdraw any of the above grounds at the time of hearing.” 4. Before us, at the time of hearing of the appeal, none appeared on behalf of the assessee. The Ld. Departmental Representative (hereinafter in short “Ld. DR”) relied on the order of the learned CIT (E). 5. The only issue contested by the assessee is rejection of the Registration U/s. 12A of the Act, by the learned CIT (E). On this issue, from the record and the material available before us, we find that the assessee has filed Form No.10AB seeking registration u/s 12A of the Act and the same was rejected by the learned CIT (E) without passing any speaking order held as under: “3. On perusal of the submissions made by the assessee, it is observed that activities are not commensurate with the activities as per the objectives of the registered Deed / MOA / AOA, which is in violation of the provisions of section 12A of the Act. In view of the above, the present application in Form 10AB for registration U/s. 12A is hereby with rejected.” 6. On a perusal of the learned CIT(E) order, we find that he has not discussed anything except stating that the activities are not commensurate with the activities as per objectives of the registered Trust Deed / MoA/AoA. We have also perused the documents submitted by the assessee (page No. 79 of the paper book) and we find that the assessee is a Religious Trust which is carrying on its activities according to the objects viz., providing function hall at free of cost to poor people ITA Nos. 168 & 169/Viz/2025 Sri Shirdi Sai Nigamagamam Maintenance Trust & Sri Shirdi Sainadh Spiritual Centre Page No. 5 for marriages and other functions, conducting spiritual programmes, providing handicraft work-shops for unemployed people, conducting tailoring classes for unemployed men and women, distribution of books for poor students for free of cost, conducting yoga classes etc. The learned CIT (E) has casually observed that no substantial activities have been carried out without discussing anything about the details and record filed by the assessee. On further perusal of the details submitted by the assessee, we are unable to understand which activities of the assessee Trust are contrary to the objects of the Trust. We find that the accounts of the Trust are audited and relevant documents are filed in the paper book filed before us. In spite of the above, the Ld. CIT (E) has simply rejected the assessee’s application which, in our considered opinion is not correct. Therefore, we are of the opinion that it is a fit case to grant Registration U/s. 12A of the Act. Accordingly, in the facts and circumstances of the case as discussed above, the impugned order of the learned CIT (E) is set aside and we direct the Ld. CIT (E) to grant registration to the assessee U/s. 12A of the Act. 7. In the result, appeal filed by the assessee is allowed. ITA No. 169/Viz/2025 (Sri Shirdi Sainadh Spiritual Centre) 8. In this appeal, the assessee has raised the identical grounds to that of the assessee’s grounds raised in ITA No. 168/Viz/2025 which is ITA Nos. 168 & 169/Viz/2025 Sri Shirdi Sai Nigamagamam Maintenance Trust & Sri Shirdi Sainadh Spiritual Centre Page No. 6 adjudicated in the above paras of this order. Considering identical facts and circumstances of these cases and the similar issue involved in both the appeals, our decision given while adjudicating the assessee’s appeal in ITA No. 168/Viz/2025 (supra) will mutatis mutandis apply to the present appeal ITA No. 169/Viz/2025 also. Accordingly, the grounds raised by the assessee are allowed. 9. In the result, both the appeals filed by the assessee are allowed. Order pronounced in the Open Court on 09th June, 2025. Sd/ (एस बालाक ृष्णन) (S. BALAKRISHNAN) लेखा सदस्य/ACCOUNTANT MEMBER Sd/- (वी. दुर्गा रगव)Sd/- (V. DURGA RAO) न्याधयक सदस्य/JUDICIAL MEMBER Dated : 09/06/2025 Okk, Sr.PS आदेशकीप्रतततलतपअग्रेतषत/ Copy of the order forwarded to :- 1. तिर्गाररती/ The Assessee : (i) Sri Shiridi Sai Nigamagamam Maintenance Trust, 15-3-2, Bapuji Nagar, Kovvur, Andhra Pradesh-534350. (ii) Sri Shirdi Sainadh Spiritual Centre, 12-3-21, Three Dabas Street, Kovvur, Andhra Praddesh- 534211. 2. रगजस्व/ The Revenue : (i) Income Tax Officer, Exemptions Ward, Rajahmundry, Andhra Pradesh-533101. (ii) Income Tax Officer, Ward-1, Tanuku, Andhra Pradesh-534211. 3. The Principal Commissioner of Income Tax 4. तवभगर्ीयप्रतततितर्, आयकरअपीलीयअतर्करण, तवशगखगपटणम/DR,ITAT, Visakhapatnam 5. The Commissioner of Income Tax 6. र्गर्ाफ़गईल/ Guard file //True Copy// आदेशगिुसगर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam "