KMMP EDUCATION SOCIETY,JODHPUR vs. CIT EXEMPTION, JAIPUR, JAIPUR

In ITA No. 224/Jodh/2025, concerning rejection of the application for regular registration, the assessee has raised the following grounds:

At the outset, it is noticed that both appeals have been filed belatedly. The assessee has filed separate petitions seeking condonation of delay, duly supported by affidavits of Shri Sharwan Ram, President of the assessee society, verified at Jaipur on 01.03.2025. It has been stated in the condonation petitions and the supporting affidavits that the appeals against the order dated 28.03.2024 could not be filed within the prescribed period owing to unavoidable circumstances beyond the control of the assessee. It has further been affirmed that the delay was neither intentional nor deliberate and that immediate steps were taken to file the appeals as soon as the impediments were removed. The assessee has, therefore, prayed that the delay be condoned in the interest of justice and that the appeals be heard on merits.

The learned Departmental Representative (DR) did not raise any objection to the condonation of delay.

We have considered the petitions, the averments made on oath in the respective affidavits and the submission of the learned DR. The explanation furnished by the assessee remains uncontroverted. The appeals concern rejection of regular registration as well as cancellation

The assessee, KMMP Education Society, filed an online application in Form No. 10AB on 29.09.2023 seeking regular registration under section 12AB of the Act. The learned CIT(E) issued a notice dated 16.12.2023 requiring the assessee to furnish certain documents and explanations by 26.12.2023. According to the impugned order, no compliance was made in response thereto. A reminder dated 10.01.2024 was thereafter issued requiring compliance by 19.01.2024. A further opportunity was provided through notice dated 25.01.2024, requiring the assessee to furnish the requisite information by 01.02.2024.

The impugned order records that the assessee subsequently filed a reply through DAK on 20.02.2024. Upon examination of the reply, the

The first objection of the learned CIT(E) related to the absence of registration of the assessee society under the Rajasthan Public Trust Act, 1959. Referring to section 12AB(1)(b)(i)(B) of the Act and sections 2(11) and 17(1) of the Rajasthan Public Trust Act, 1959, the learned CIT(E) held that registration under the State enactment was mandatory and that the assessee had failed to establish such registration. The learned CIT(E), therefore, concluded that the assessee was not eligible for registration under section 12AB of the Act.

The second set of objections related to the genuineness of the activities of the assessee. The learned CIT(E) observed, inter alia, that the assessee had not furnished complete details of its receipts and expenditure, ledger accounts, bills and vouchers, particulars of material bank transactions, salary payments, students to whom concessions were

The learned CIT(E) also noticed from the income and expenditure accounts that, for the financial year 2021-22, the assessee had disclosed school-fee receipts of Rs. 60,24,057/- and surplus of Rs. 10,18,787/- before depreciation. For the financial year 2020-21, the total receipts were stated to be Rs. 13,18,584/- and the surplus was Rs. 9,76,027/- before depreciation. The learned CIT(E) regarded the activities as being carried on on a commercial basis.

The learned CIT(E) further observed that, although the balance sheet disclosed a gross block of building and fixed assets of approximately Rs.79,00,000/- on land stated to be owned by a trustee, column No. 14 of Form No. 10AB relating to land and buildings had been left blank. The absence of an agreement concerning the building constructed on land stated to be owned by the trustee was also viewed adversely.

In paragraph 5 of the same order, the learned CIT(E), invoking section 12AB(1)(b)(ii)(B) of the Act, also cancelled the provisional registration granted to the assessee on 16.02.2022 under clause (vi) of section 12A(1)(ac) of the Act. Thus, the order dated 28.03.2024 operated both as a rejection of regular registration and as a cancellation of the existing provisional registration.

Before us, the learned Authorised Representative (AR) submitted that the application was rejected primarily because the registration under the Rajasthan Public Trust Act, 1959 was not available during the proceedings before the learned CIT(E). The assessee has since obtained the requisite registration and a copy thereof has been placed on record before us. It was submitted that the foundational objection concerning non-registration under the State enactment, therefore, no longer survives, subject to verification of the certificate by the learned CIT(E).

The learned DR relied upon the findings recorded in the impugned order. He, however, did not object to restoration of the matter to the file of the learned CIT(E), considering that the fresh material placed by the assessee requires verification and that certain details called for during the original proceedings had not been furnished by the assessee.

We have considered the rival submissions and carefully examined the material available on record. The application for regular registration was rejected principally on account of the absence of registration under the Rajasthan Public Trust Act, 1959 and the alleged failure of the assessee to furnish complete information necessary for verification of the

It is the specific case of the assessee before us that registration under the Rajasthan Public Trust Act, 1959, which was not available during the proceedings before the learned CIT(E), has since been obtained and placed on record. This document was admittedly not available for examination before the learned CIT(E). Its authenticity, operative date, scope and effect upon the assessee’s application require verification by the competent authority.

There is also a factual dispute regarding the details of activities furnished before the learned CIT(E. While the assessee contends that the requisite details had been submitted but were not properly appreciated, the impugned order records that only a partial reply was filed on 20.02.2024 and that the details called for through the show cause notice dated 26.02.2024 were not furnished. This factual aspect also requires verification with reference to the material actually submitted by the assessee.

In the set-aside proceedings, the learned CIT(E) shall verify the registration certificate issued under the Rajasthan Public Trust Act, 1959 and consider its effect upon the assessee’s eligibility for registration under section 12AB of the Act. The assessee shall also furnish complete details and supporting evidence concerning its objects and the genuineness of its activities, including such documents as may be reasonably required by the learned CIT(E) within the scope of section 12AB.

We further direct that the enquiry in the set-aside proceedings shall remain confined to the statutory scope of registration under section 12AB, namely, examination of the objects of the assessee, the genuineness of its activities and compliance with the requirements of any other law which are material for achieving its objects. The

The learned CIT(E) shall consider the evidence concerning the assessee’s educational and charitable activities in its proper perspective and shall not draw a conclusion merely from the existence of fees or surplus without examining the objects, the actual manner in which the activities are carried on and the complete material placed by the assessee. We clarify that we have not expressed any opinion on the genuineness of the documents, the charitable character of the activities or the ultimate eligibility of the assessee for registration.

The assessee is directed to furnish the registration certificate under the Rajasthan Public Trust Act, 1959 and all other requisite details and supporting documents before the learned CIT(E), and to extend due cooperation in the set-aside proceedings. The learned CIT(E) shall decide the matters independently on the basis of the material so furnished and in accordance with law.

Accordingly, all the substantive grounds raised in ITA No. 224/Jodh/2025 and ITA No. 225/Jodh/2025 are restored to the file of the learned CIT(E) and are treated as allowed for statistical purposes.

In the result, both appeals of the assessee are allowed for statistical purposes.