VILAYANNUR SRI NEDUMBRAYUR SHIVA TEMPLE WELFARE AND CHARITABLE TRUST,PALAKKAD V. CIT(EXEMPTION), KOCHI

ITA 319/COCH/2025

AI Insights

The case involves the Vilayannur Sri Nedumbrayur Shiva Temple Welfare and Charitable Trust, which appealed against the decision of the Commissioner of Income Tax (Exemption) rejecting their application for regular registration under section 12A of the Income Tax Act, 1961. The Commissioner had rejected the application on the grounds that it was filed beyond the permissible time limit, as the Trust had commenced activities before the new provisions governing the grant of registration came into effect. The Tribunal, referencing a decision by the Pune bench and a judgment from the Punjab & Haryana High Court, found that the notice of hearing was not properly served and that the application was indeed within the time limit.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711839 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2023-2024
• Other Referred Cases: Munjal BCU Centre of Innovation and Entrepreneurship v. CIT (Exemptions) [2024] 160 taxmann.com 629/463 TTR 560
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SURESH SIVANANDAN
• Assessee Lawyers: ACHUTH MENON
• Keywords: Set aside; Principle of natural justice; Search and seizure; Charitable institution
• Section: 12A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM AND SHRI SONJOY SARMA, JM ITA No. 319/Coch/2025 Vilayannur Sri Nedumbrayur Shiva Temple .......... Appellant Welfare and Charitable Trust 15/03, Pushpakath House, Vilayannur Post Thenkurissi, Palakkad 678671 [PAN: AADTV6685K] vs. Commissioner of Income Tax (Exemption) , Kochi......... Respondent Appellant by: Shri Achuth Menon, Advocate Respondent by: Shri Suresh Sivanandan, CIT-DR Date of Hearing: 05.06.2025 Date of Pronouncement: 22.07.2025 O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Exemption) dated 12.03.2025 rejecting grant of registration u/s. 12A of Income Tax Act, 1961 (hereinafter \"the Act\"). 2. Brief facts of the case are that the appellant is a charitable trust established under the Trust Act formed with religious and charitable objects. The appellant was granted provisional registration under the new regime u/s. 12A of the Act on Printed from counselvise.com 2 ITA No. 319/Coch/2025 Vilayannur Sri Nedumbrayur Shiva Temple Welfare and Charitable Trust 24.03.2022. Subsequently, the appellant trust filed application Form 10AB on 19.09.2024 seeking regular registration u/s. 12A of the ct. However, the same was rejected by the ld. Commissioner of Income Tax (Exemption) on the ground that the appellant trust had already commenced activities before commencement of new provisions governing grant of registration u/s. 12A of the Act. Therefore, the appellant ought to have applied within 6 months from the date of commencement of activities. Thus, he proceeded to hold that the application filed by the appellant trust is barred by limitation, accordingly rejected the application vide the impugned order. 3. Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal. 4. The learned counsel for the assessee submitted that the appellant trust had commenced activities only on 24.05.2022 and provisions of section 12A regarding time limit prescribed under clause (iii) of clause (ac) to sub-section (1) of section 12A were wrote down by the Pune bench of this Tribunal, which reads as under: - “11. As regards the compliance to the notices by the ld. CIT(Exemptions), we find that in the instant case the hearing notices were sent through ITBA portal by the CIT(A). In our considered opinion, it is not a valid method and manner of service of notice as specified under the provisions of section 282(1) of the Act Therefore, it is crystal clear that the notices were not served upon the appellant. To fortify our view, we Printed from counselvise.com 3 ITA No. 319/Coch/2025 Vilayannur Sri Nedumbrayur Shiva Temple Welfare and Charitable Trust would like to make a reference to a decision rendered by the Hon'ble Punjab & Haryana High Court in the case of Munjal BCU Centre of Innovation and Entrepreneurship v. CIT (Exemptions) [2024] 160 taxmann.com 629/463 TTR 560 wherein the Hon'ble High Court after making reference to provisions of 282(1) held that service of notice through ITBA portal is not valid service and remanded the matter to AO for denovo disposal of case. The relevant paragraphs of the judgment are reproduced below: \"7. We are afraid that we cannot subscribe to the submissions as advanced by the learned counsel for the Revenue- respondent. The provisions of section 282(1) of the Act of 1961 and rule 127(1) of the Income-tax Rules, 1962 provides for a method and manner of service of notice and orders which read as follows: 8. In view of the above, it is essential that before any action is taken, communication of the notice must be done in terms of the provisions as enumerated hereinabove. The provisions do not mention communication to be \"presumed\" by placing notice on the e-portal. A pragmatic view has to be adopted always in these circumstances. An individual or a company is not expected to keep the e-portal of the Department open all the time so as to have knowledge of what the Department is supposed to be doing with regard to the submissions of forms etc. The principles of natural justice are inherent in the income tax provisions and the same are required to be necessarily followed. 9. Having noticed as above, this court is of the firm view that the petitioner has not been given sufficient opportunity to put up its please with regard to the proceedings under section 12A(1)(ac)(iii) of the Act 1961 and as it was not served with any notice. Therefore, he would be entitled to file his reply and th Department would of course be entitled to examine the same and pass a fresh order thereafter. Printed from counselvise.com 4 ITA No. 319/Coch/2025 Vilayannur Sri Nedumbrayur Shiva Temple Welfare and Charitable Trust 10. In view of the above, the writ petition is allowed and the order dated January 16, 2023 (annexure P-5) Squashed and set aside. The Department would provide an opportunity of hearing to the petitioner and they will also allow the petitioner to appear personally for the purpose and pass a speaking order Independent of the order passed earlier by them on January 16,2023. The same shall be done expeditiously provided the petitioner file his reply within a period of three weeks.\" 12. In view of the above legal position, we are of the considered opinion that the notice(s) of hearing were not served properly to the appellant. Therefore, in the interest of justice, we restore the matter back to the file of CIT(Exemptions) for denovo disposal on merits in accordance with law.” 5. In view of this decision we are of the considered opinion that the application files under clause (iii) of clause (ac) to sub-section (1) of section 12A of the Act is not barred by limitation. Accordingly, the order passed by the Commissioner of Income Tax (Exemption) is hereby set aside and remand the matter back to the CIT(A) for de novo disposal of the application after due verification of other conditions precedent for allowing registration are satisfied. 6. In the result, the appeal stands partly allowed. Order pronounced in the open court on 22nd July, 2025. Sd/- Sd/- (SONJOY SARMA) JUDICIAL MEMBER (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 22nd July, 2025 n.p. Printed from counselvise.com 5 ITA No. 319/Coch/2025 Vilayannur Sri Nedumbrayur Shiva Temple Welfare and Charitable Trust Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File By Order Assistant Registrar ITAT, Cochin Printed from counselvise.com "