VEERA DEVI RAMCHANDRA JHANWAR CHAIRITABLE TRUST NOKHA MANDI BIKANER,BIKANER vs. ITO EXEMPTION, JODHPUR

ITA 867/JODH/2026Status: DisposedITAT Jodhpur13 August 202611 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the CIT(E) committed a fundamental error by proceeding from the absence of RPT registration to infer non-compliance, without first determining whether the RPT Act was applicable to the assessee. Section 12AB and section 80G require examination of compliance with other laws that are material for the trust's objects, but this presupposes the applicability of such other laws. The Tribunal found that the assessee had invoked section 77(1) of the RPT Act, which exempts public trusts administered by agencies under state government control. The CIT(E) should have first examined this claim, considering the MOU, the management committee's composition with government representation, government supervision, and the 'No Profit No Loss' operation. The Tribunal noted that receipt of government grants or private trustees are not determinative factors under section 77(1). The rejection of applications based solely on the absence of RPT registration, without examining the section 77(1) claim, was unsustainable. Consequently, both appeals were allowed for statistical purposes, and the applications were restored to the CIT(E) for fresh adjudication, with specific directions to examine the section 77(1) claim first.

What were the facts?

The assessee, Veera Devi Ramchandra Jhanwar Charitable Trust, filed appeals against the orders of the learned Commissioner of Income-tax (Exemption) [CIT(E)], Jaipur, rejecting its applications for registration under section 12AB and approval under section 80G(5) of the Income-tax Act, 1961. The assessee runs a 'Veera Seva Sadan Dharamshala' for poor patients and their attendants at P.B.M. Hospital, Bikaner, on a 'No Profit No Loss' basis. The CIT(E) rejected the applications primarily because the trust had not obtained registration under the Rajasthan Public Trust Act, 1959 (RPT Act), and was collecting room/user charges without receiving government grants, with private trustees. The assessee contended that it was exempt from RPT Act registration under section 77(1) due to government control.

What were the issues?

1. Whether the CIT(E) erred in rejecting the assessee's application for registration under section 12AB of the Income-tax Act, 1961, solely on the ground of non-registration under the Rajasthan Public Trust Act, 1959, without first examining the assessee's claim of exemption under section 77(1) of the RPT Act? 2. Whether the CIT(E) erred in rejecting the assessee's application for approval under section 80G(5) of the Income-tax Act, 1961, based on the same premise of non-compliance with the RPT Act? Assessee's contentions: The CIT(E)'s approach was based on a misinterpretation of section 77(1) of the RPT Act. The Dharamshala is operated under an MOU with S.P. Medical College, a government institution, and its management committee has substantial government representation. The facility is monitored by government authorities, and charges collected are subsidized and incidental. Receipt of government grants or government ownership is not a condition under section 77(1). Reliance was placed on Deewan Singh & Ors. v. State of Rajasthan & Ors., AIR 1997 Raj 129. Revenue's contentions: The judgment records no specific contentions for the revenue, other than implicitly supporting the CIT(E)'s order.

Which sections of the Income-tax Act were involved?

Section 12AB,Section 80G(5),Section 77(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JODHPUR BENCH, JODHPUR

Before: SHRI AMIT SHUKLA, HON’BLE & SHRI GIRISH AGRAWAL, HON’BLE

For Appellant: CA (Physical)
For Respondent: DR (Physical)
Pronounced: 13/08

PER BENCH:

The aforesaid appeals have been filed by the assessee, Veera Devi Ramchandra Jhanwar Charitable Trust, against the separate impugned orders passed by the learned Commissioner of Income-tax (Exemption), Jaipur [“Ld. CIT(E)”], whereby the assessee’s applications seeking registration under section 12AB and approval under section 80G(5) of the Income-tax Act, 1961 have been rejected. Since both the appeals arise from the same set of facts and the fate of the application under section 80G is substantially connected with the application

ITA Nos. 867 & 868/Jodh/2026 Asst. Year: NA

under section 12AB, both the appeals were heard together and

The order continues below.

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