OM SANATAN CHARITABLE TRUST,UDAIPUR vs. CIT(EXEMPTION), JAIPUR

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ITA 355/JODH/2024Status: DisposedITAT Jodhpur06 August 2026AY 2024-258 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the order of the CIT(Exemption) and restored the matter for fresh adjudication. The assessee was granted a final opportunity to furnish all required documents and explanations.

What were the facts?

The assessee trust applied for regular registration under Section 12AB of the Income-tax Act. The CIT(Exemption) rejected the application and cancelled the provisional registration, citing non-compliance with various provisions and lack of complete documentation.

What were the issues?

Whether the CIT(Exemption) erred in rejecting the registration application without affording sufficient opportunity and considering all evidence, and whether the trust's objects and activities comply with the requirements of Section 12AB.

Which sections of the Income-tax Act were involved?

Section 12AB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JODHPUR BENCH, JODHPUR

Before: SHRI SAKTIJIT DEY, HON’BLE & SHRI MAKARAND VASANT MAHADEOKAR, HON’BLE

For Appellant: Shri Rajendra Jain (Advocate) and Smt. Raksha Birla CA
For Respondent: Ms. Shivani Bansal CIT-DR

PER: SHRI MAKARAND VASANT MAHADEOKAR; AM :

This appeal has been preferred by the assessee against the order dated 20.03.2024 passed by the Commissioner of Income Tax (Exemption), Jaipur under section 12AB of the Income-tax Act, 1961 in Form No. 10AD, whereby the application filed by the assessee seeking

2 ITA No. 355/Jodh/2024 (Assessment Year: 2024-25) regular registration under section 12AB of the Act was rejected and the provisional registration granted earlier was also cancelled.

2.

The assessee has raised the following grounds of appeal:

1.

That on the facts and in the circumstances of the case, the order passed by ld CIT(Exemption) is bad in law and bad in facts. 2. That on the facts and in the circumstances of the case, the ld CIT (Exemption) grossly erred in rejecting the application for grant of registration u/s 12AB of the Act, particularly when the appellant trust fulfilled all the conditions for granting of registration as per provision of law. 3. That on the facts and in the circumstances of the case, the ld CIT (Exemption) grossly erred in recording the observation and allegation for rejecting the application for grant of registration u/s 12AB of the Act is contrary to material on record and also against the principle of natural justice. 4. That on the facts and in the circumstances of the case, the ld CIT (Exemption) grossly erred in holding the object of appellant trust giving benefit to particular community by violating clause (d) of section 12AB (4) of the Act. 5. That on the facts and in the circumstances of the case, the ld CIT (Exemption) grossly erred in holding the appellant trust had applied the income for such activity which are beyond its object resulting the violation of clause (a) of section 12AB (4) of the Act. 6. That on the facts and in the circumstances of the case, the ld CIT (Exemption) grossly erred in not appreciating the facts the object of appellant trust that solely for charitable purposes and not for purposes of business, while rejecting the application for grant of registration u/s 12AB of the Act. 7. That on the facts and in the circumstances of the case, the ld CIT (Exemption) also grossly erred in holding the object of appellant trust relating to foreign collaboration and contribution is outside the scope of provision of sec 2(15) and section 11 of the Act without appreciating the facts and legal position in right perspective and judicious manner.

3 ITA No. 355/Jodh/2024 (Assessment Year: 2024-25) 8. That on the facts and in the circumstances of the case, the ld CIT (Exemption) grossly erred in holding the activities of appellant trust are non-genuine which is contrary to the facts and objects/activities of the charitable trust. 9. That the appellant may kindly be permitted to raise any additional or alternative grounds at or before the time of hearing. 10. The appellant prays for justice & relief. Facts of the Case 3. The brief facts, as borne out from the record, are that the assessee- trust filed an online application in Form No. 10AB on 16.09.2023 seeking regular registration under section 12AB of the Income-tax Act, 1961. During the course of processing of the application, the ld. CIT(E) issued notices from time to time calling upon the assessee to furnish various documents and explanations. The record reveals that notices/opportunities were granted on 02.12.2023, 01.01.2024, 27.01.2024, 08.02.2024, 20.02.2024 and 08.03.2024. The assessee sought adjournments on certain occasions and furnished only partial compliance according to the ld. CIT(E).

4.

The ld. CIT(E), after examining the material available on record, passed the impugned order dated 20.03.2024 in Form No.10AD rejecting the application for registration under section 12AB and also cancelling the provisional registration earlier granted to the assessee.

4 ITA No. 355/Jodh/2024 (Assessment Year: 2024-25) 5. While rejecting the application, the ld. CIT(E) recorded, inter alia, the following findings:

(i) the assessee had failed to establish compliance with the provisions of the Rajasthan Public Trust Act, 1959, which according to the ld. CIT(E) was a material requirement for the purposes of section 12AB(1)(b)(i)(B); (ii) certain objects and activities of the trust were considered to be for the benefit of Bhawsar Samaj, and therefore the assessee was held to be hit by the provisions relating to benefit of a particular religious community or caste; (iii) the assessee was alleged to have applied its income towards activities beyond the objects of the trust, particularly publication and distribution of literature relating to Bhagwad Gita and writings of Shri Subhash Gandhi; (iv) certain clauses of the trust deed were considered by the ld. CIT(E) to be commercial/business in nature; (v) clauses relating to foreign collaboration and foreign contribution were viewed as indicating activities outside India; (vi) the activities of the assessee were ultimately held to be non-genuine on the ground that the assessee had not furnished complete details such as supporting vouchers, bank statements, beneficiary details, activity reports and other evidences called for during the proceedings.

5 ITA No. 355/Jodh/2024 (Assessment Year: 2024-25) 6. On the basis of the aforesaid observations, the application for regular registration under section 12AB came to be rejected and the provisional registration granted earlier was also cancelled.

7.

Aggrieved by the order of ld. CIT(E), the assessee is in appeal before us.

8.

The ld. Authorised Representative (AR) submitted that the assessee may be granted one final opportunity to substantiate its claim for registration under section 12AB of the Act. It was submitted that the assessee is ready and willing to furnish all the documents, explanations and evidences as may be required by the ld. CIT(E) for examining the objects of the trust, the genuineness of its activities and all other issues raised in the impugned order. It was, therefore, prayed that, in the interest of justice, the impugned order may be set aside and the matter may be restored to the file of the ld. CIT(E) for fresh adjudication after affording adequate opportunity of being heard.

9.

The ld. Departmental Representative (DR) relied upon the findings recorded in the impugned order. However, ld. DR did not raise any objection to restoring the matter to the file of the ld. CIT(E) for fresh adjudication after affording due opportunity of hearing to the assessee.

6 ITA No. 355/Jodh/2024 (Assessment Year: 2024-25) We have heard the rival submissions and perused the material available on record.

10.

The impugned order reveals that the ld. CIT(E) has rejected the assessee's application by recording various findings relating to the applicability of the Rajasthan Public Trust Act, 1959, the objects allegedly benefiting a particular community, application of income beyond the stated objects, business objects, foreign collaboration clauses and genuineness of activities. It is also evident from the record that the rejection has been substantially founded upon the assessee's failure to furnish complete details and explanations sought by the ld. CIT(E).

11.

Before us, the ld. AR has fairly submitted that the assessee is prepared to furnish all the documents, explanations and evidences as may be required for proper adjudication of the application and has specifically requested that one final opportunity be granted to the assessee. The ld. DR, though supporting the impugned order, has not objected to restoration of the matter to the file of the ld. CIT(E).

12.

Considering the totality of the facts and circumstances of the case, the nature of the proceedings under section 12AB of the Act, and the fair stand taken by both the parties, we are of the considered view that the

7 ITA No. 355/Jodh/2024 (Assessment Year: 2024-25) ends of justice would be adequately met by restoring the matter to the file of the ld. CIT(E) for fresh adjudication. Such restoration would enable the ld. CIT(E) to examine all the objections recorded in the impugned order after considering the complete material and explanations that may be furnished by the assessee.

13.

Accordingly, we set aside the impugned order dated 20.03.2024 passed by the ld. CIT(E) and restore the matter to his file for adjudication afresh in accordance with law. The assessee shall furnish all documents, explanations and evidences as may be called for by the ld. CIT(E), who shall thereafter decide the application by passing a reasoned and speaking order after affording adequate opportunity of being heard to the assessee.

14.

We make it clear that this restoration is being granted as a final opportunity. The assessee is directed to extend full cooperation in the remand proceedings and shall not seek unnecessary adjournments. In the event of any failure on the part of the assessee to comply with the notices or to furnish the requisite details, the ld. CIT(E) shall be at liberty to decide the matter on the basis of the material available on record, in accordance with law. We have not expressed any opinion on the merits

8 ITA No. 355/Jodh/2024 (Assessment Year: 2024-25) of the issues involved, and all the contentions of both the parties are kept open.

15.

In the result, the appeal of the assessee is allowed for statistical purposes

Order pronounced in open court on 06 / 08 / 2026.

Sd/- Sd/- (SAKTIJIT DEY) (MAKARAND VASANT MAHADEOKAR) ACCOUNTANT MEMBER VICE PRESIDENT Dated : 06 / 08 / 2026. Pritesh Vaishnav PS

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