TAJ WELFARE TRUST ,BANGALORE V. INCOME TAX OFFICER(EXEMPTIONS), BANGALORE

ITA 914/BANG/2025

AI Insights

The Taj Welfare Trust appealed against the order of the CIT(Exemptions), which had cancelled its registration under section 12AB of the Income Tax Act, 1961. The cancellation was based on the grounds that the trust had not commenced its activities towards the attainment of its objects and had not made substantial expenditures towards these objects. The trust argued that it had indeed started its activities, including distributing food and clothes to the needy, and had received donations. The ITAT found merit in the trust's arguments and remanded the case for a detailed re-examination of the trust's activities and financials.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 775217 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 21-04-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SRIDHAR E.
• Assessee Lawyers: VALISHA SHAKEEL
• Keywords: Opportunity of being heard

Judgement Text

"ITA No.914/Bang/2025 Taj Welfare Trust, Bangalore IN THE INCOME TAX APPELLATE TRIBUNAL “B’’ BENCH: BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE-PRESIDENT AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA No.914/Bang/2025 Assessment Year: NA Taj Welfare Trust No.29, 1st Cross Doctors Layout Kodichikkanahalli BTM 3rd Stage Bangalore 560 076 Karnataka PAN NO : AAGTM6143E Vs. CIT(Exemptions) Bangalore APPELLANT RESPONDENT Appellant by : Sri A.R. Valisha Shakeel, A.R. Respondent by : Sri Sridhar E., D.R. Date of Hearing : 30.06.2025 Date of Pronouncement : 02.09.2025 O R D E R PER KESHAV DUBEY, JUDICIAL MEMBER: This appeal at the instance of the assessee is directed against the order of the ld. CIT(Exemptions) Bangalore dated 26.12.2024 vide DIN & Notice No. ITBA/EXM/F/EXM45/2024-25/1071593339(1) cancelling the registration u/s 12AB of the Income Tax Act, 1961 (in short “The Act”). 2. In this appeal, the assessee has raised the following grounds of appeal: - Printed from counselvise.com ITA No.914/Bang/2025 Taj Welfare Trust, Bangalore Page 2 of 7 Printed from counselvise.com ITA No.914/Bang/2025 Taj Welfare Trust, Bangalore Page 3 of 7 3. At the outset, as noted by the Registry, there is a delay of 52 days in filing the appeal before this Tribunal. The assessee has filed a petition praying to condone the delay in filing the appeal, which is reproduced herewith for ease of reference and record: 4. Before us, ld. A.R. of the assessee vehemently submitted that after the rejection of Form 10AB by the ld. CIT(Exemptions) vide order dated 26.12.2024, the ld. CIT(Exemptions) Bangalore orally instructed the assessee to make a fresh application u/s 12AB of the Act as Religious Trust. However, while filing Form 10AB under the religious category, the system was not accepting the application as it was already rejected by the ld. CIT(Exemptions). Thereafter, the Printed from counselvise.com ITA No.914/Bang/2025 Taj Welfare Trust, Bangalore Page 4 of 7 assessee tried filing the application in Form 10AB by selecting different assessment year but then also they could not file the application due to glitches in the system. Thereafter, the assessee visited the office of ld. JAO, who advised them to file appeal against the original rejection order before the Hon’ble ITAT and for this reason, there is a delay in filing the appeal before this Tribunal. The ld. A.R. further prayed that the delay was unintentional and sufficient cause has been shown and accordingly, the appeal may be admitted for adjudication after condoning the delay of 52 days in filing the appeal. 5. The ld. D.R. on the other hand objected for condoning the delay and submitted that the reason cited by the ld. A.R. is merely an excuse & not a cause for the delay. 6. We have heard the rival submissions and perused the materials available on record. Having heard the ld. Counsel for the assessee and ld. D.R., it is perceived that the explanation offered in the condonation application is plausible and sufficient cause being shown by the assessee, which prevented them from filing the appeal within the specified period as specified u/s 253 of the Act and accordingly, we inclined to condone the delay and admit the appeal for adjudication on merits. 7. Now brief facts of the case are that the assessee Trust has been granted the provisional registration u/s 12AB as well as u/s 80G(5) of the Act from AY 2024-25 to AY 2026-27. Thereafter, the assessee trust applied for final registration. On receipt of application in form 10AB dated 21.06.2024 for registration u/s 12AB of the Act, the ld. CIT(E) assigned the case to the JAO for verification. The JAO issued letters/notices through official mail/post calling for the details/documents and on perusal of the submissions made by the Printed from counselvise.com ITA No.914/Bang/2025 Taj Welfare Trust, Bangalore Page 5 of 7 assessee, both the Range Head and JAO did not recommend for registration as the assessee has incurred expenditure mainly of administrative in nature & no activity of any kind of charitable in nature was seen. Further the trust has neither furnished any bank account extracts nor any proof supporting the activities claimed to have been undertaken. Thus the AO recommended for rejection for non-commencement of activities. 7.1 The ld. CIT(E) also observed that the assessee trust has not made substantial amount of expenditure towards the objects. Thus, it is clear that the assessee has not commenced its activities towards the attainment of the objects and accordingly rejected the form 10AB dated 21/06/2024 filed for registration u/s 12AB of the Act and the registration was cancelled. 8. Aggrieved by the order of ld. CIT(E) dated 26/12/2024, the assessee has filed the present appeal before this Tribunal. 9. Before us, the ld. A.R. of the assessee submitted that the ld. CIT(E) passed the order cancelling the registration without considering the documents/details submitted by the assessee during the course of personal hearing and accordingly prayed to grant one more opportunity before the ld. CIT(E) to substantiate its case. 10. Ld. D.R. on the other hand relied on the order of ld. CIT(E). 11. We have heard the rival submissions and perused the materials available on record. We are of the firm opinion that for the purpose of granting registration, the ld. CIT(E) shall call for such documents or information or make such inquiry as he/she thinks necessary in order to satisfy himself/herself about the twin object:- (a) the genuineness of the activity of the trust and Printed from counselvise.com ITA No.914/Bang/2025 Taj Welfare Trust, Bangalore Page 6 of 7 (b) the compliance of such requirements of any other law for the time being in force by the trust or institution as are material for the purpose of achieving its object. We are also of the opinion that at the time of granting registration the ld. CIT(E) should not steps into shoes of the AO & in the guise of Registration proceeding starts assessing the Income of the assessee Trust. On going through the order of the ld. CIT(E), we observe that the only contention for rejecting the application of registration is that the assessee has not made substantial amount of expenditure towards the objects and accordingly concluded that assessee has not commenced its activities towards the attainment of the objects. 11.2 On going through the order of the ld.CIT(E), we observed that the ld JAO stated that the assessee trust had started their activities and distributed food and clothes to the poor and destitutes. Further the trust is in receipt of donations/bank collections (including Jumma collections). Therefore, we do not agree with the contention of the ld. CIT(E) that the assessee trust had not commenced its activities towards the attainment of the objects. Further, before us, the ld. A.R. of the assessee submitted that one building is also under construction for the objects of the assessee trust and the trust had also amended the deed which was earlier for the benefits of particular religious community. The ld. AR also submitted that all these facts were not examined by the ld. CIT(E) and prayed to grant one more opportunity to the assessee trust to represent its case and remand the matters back to the file of the ld. CIT(E) for fresh consideration. This being so, in the interest of justice and fair play and as requested by the ld. A.R. of the assessee, we deem it fit and proper to remit the entire issue in dispute to the file of ld. CIT(E) to decide afresh in accordance with law. The ld. CIT(E) is also directed to verify the amended trust deed vis a vis the activities undertaken by the assessee trust. The ld. CIT(E) shall also verify the Printed from counselvise.com ITA No.914/Bang/2025 Taj Welfare Trust, Bangalore Page 7 of 7 purposes of the construction of the building & genuineness of the present activities undertaken along with the receipts of huge donations. Needless to say, a reasonable opportunity of being heard must be granted to the assessee. We also direct the assessee to produce/submit all the necessary details/documents/record/ financials/reports in support of its claim and should not take unnecessary adjournments. It is ordered accordingly. 12. In the result, appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 2nd Sep, 2025 Sd/- (Prashant Maharishi) Vice- President Sd/- (Keshav Dubey) Judicial Member Bangalore, Dated 2nd Sep, 2025. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order Asst. Registrar, ITAT, Bangalore. Printed from counselvise.com "