RAKT SEVADAL SANSTHAN SAYLA JALORE,JALORE vs. CIT EXEMPTION, JAIPUR

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ITA 521/JODH/2024Status: DisposedITAT Jodhpur04 August 202611 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the applications for regular registration and approval to the CIT(E) for fresh adjudication. This was because the assessee subsequently obtained registration under the Rajasthan Public Trust Act, 1959, which was a crucial document not considered by the CIT(E). The cancellation of provisional registrations was also directed to be reconsidered.

What were the facts?

The assessee, a charitable institution, had its applications for regular registration under section 12AB and approval under section 80G rejected by the CIT(E). The CIT(E) also cancelled its provisional registrations. A key reason for rejection was the lack of registration under the Rajasthan Public Trust Act, 1959.

What were the issues?

Whether the CIT(E) erred in rejecting the applications for regular registration and approval without considering newly obtained registration under the Rajasthan Public Trust Act, 1959. The consequential impact on the cancellation of provisional registrations was also an issue.

Which sections of the Income-tax Act were involved?

Section 12AB,Section 80G,Section 12A

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 R.S. Poonia, CA (Virtually)
For Respondent: Ms. Shivani Bansal CIT-DR

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI SAKTIJIT DEY, HON’BLE VICE PRESIDENT AND SHRI MAKARAND VASANT MAHADEOKAR, HON’BLE ACCOUNTANT MEMBER ITA Nos. 518, 520 AND 521/JODH/2024 (Assessment Years: NA) RAKT SEVADAL SANSTHAN SAYLA CIT(EXEMPTION) JALORE JAIPUR C/O. CA R.S POONIA, D-82B, SIWAD AREA, KRISHNA MARG, BAPU NAGAR RAJASTHAN-302015 PAN NO. AADTR 6192 B Assessee by Shri R.S. Poonia, CA (Virtually) Revenue by Ms. Shivani Bansal CIT-DR (Physically) Date of Hearing 03 / 08 / 2026. Date of Pronouncement 04 / 08 / 2026.

ORDER PER: SHRI MAKARAND VASANT MAHADEOKAR : These three appeals filed by the assessee arise from two orders passed by the learned CIT(E), Jaipur, both dated 31.03.2024. The first order rejected the assessee’s application for regular registration under section 12AB and also cancelled its provisional registration. The second order rejected the assessee’s application for regular approval under section 80G and also cancelled its

2 ITA Nos. 518, 520 & 521/Jodh/2024 Asst. Years: NA provisional approval. The assessee has preferred separate appeals against the rejection of regular registration and cancellation of provisional registration. In ITA No. 521/Jodh/2024, the assessee has raised two separate sets of grounds challenging both the rejection of regular approval under section 80G and the cancellation of provisional approval under the same section.

2.

Following are the tabulated details of the appeals and the orders appealed:

ITA No. Subject matter Order particulars 518/Jodh/2024 Rejection of regular Order dated 31.03.2024, DIN registration under ITBA/EXM/F/EXM45/2023- section 12AB 24/1063793045(1) 520/Jodh/2024 Cancellation of Provisional registration dated provisional registration 27.05.2021 cancelled through the under section 12A same order dated 31.03.2024 521/Jodh/2024 Rejection of regular Order dated 31.03.2024, DIN approval and ITBA/EXM/F/EXM45/2023- cancellation of 24/1063793388(1) provisional approval under section 80G

Condonation of delay

3.

At the outset, we note that the present appeals are barred by limitation by seven days. The assessee has sought condonation of the said delay.

3 ITA Nos. 518, 520 & 521/Jodh/2024 Asst. Years: NA 4. The learned DR did not raise any objection to the condonation of delay. Considering the shortness of the delay and the absence of any objection from the Revenue, we are satisfied that the delay deserves to be condoned. Accordingly, the delay of seven days in filing the present appeals is condoned and the appeals are admitted for adjudication on merits.

5.

The grounds raised by the assessee read as under:

Grounds in ITA No. 518/Jodh/2024

1.

That the order passed by Ld. Commissioner of Income Tax, Exemption, Jaipur by rejecting application u/s. 12AB (1)(b) of the I.T. Act, 1961 is wrong, unwarranted and bad in law. Kindly direct to register the same. 2. That the appellant craves permission to add to or amend to any of the above grounds of appeal or to withdraw any of them. Grounds in ITA No. 520/Jodh/2024

1.

That the Ld. CIT (Exemption), Jaipur has erred in law and in facts of the case by neither recording the independent satisfaction for rejection of provisional registration and nor issued Show Cause Notice for rejection of provisional registration u/s. 12A of the I.T. Act 1961 which is wrong, unwarranted and bad in Law. Kindly restore the same. 2. That the Ld. CIT (Exemption), Jaipur has erred in law and in facts of the case in rejecting the provisional registration u/s. 12A without issuing separate DIN of the rejection order, which is against the circular & notification issued by the CBDT. So, the same is wrong, unwarranted and bad in Law. Kindly restore the same. 3. That the order passed by Ld. Commissioner of Income Tax (Exemption), Jaipur by rejecting provisional registration u/s. 12Aof the I.T. Act, 1961 is wrong, unwarranted and bad in law. Kindly direct to register the same.

4 ITA Nos. 518, 520 & 521/Jodh/2024 Asst. Years: NA 4. That the appellant craves permission to add to or amend to any of the above grounds of appeal or to withdraw any of them. First set of grounds in ITA No. 521/Jodh/2024 1. That the order passed by Ld. Commissioner of Income Tax, Exemption, Jaipur by rejecting application u/s. 80G(5)(iii) of the I.T. Act, 1961 is wrong, unwarranted and bad in law. Kindly direct to register the appellant. 2. That the appellant craves permission to add to or amend to any of the above grounds of appeal or to withdraw any of them. Second set of grounds in ITA No. 521/Jodh/2024 1. That the Ld. CIT (Exemption), Jaipur has erred in law and in facts of the case by neither recording the independent satisfaction for rejection of provisional approval and nor issued Show Cause Notice for rejection of provisional approval u/s. 80G of the I.T. Act 1961 which is wrong, unwarranted and bad in Law. Kindly restore the same. 2. That the Ld. CIT (Exemption), Jaipur has erred in law and in facts of the case in rejecting the provisional approval u/s. 80G without issuing separate DIN of the rejection order, which is against the circular & notification issued by the CBDT. So, the same is wrong, unwarranted and bad in Law. Kindly restore the same. 3. That the order passed by Ld. Commissioner of Income Tax (Exemption), Jaipur by rejecting provisional approval u/s. 80G of the I.T. Act, 1961 is wrong, unwarranted and bad in law. Kindly direct to register the same. 4. That the appellant craves permission to add to or amend to any of the above grounds of appeal or to withdraw any of them. Facts in brief 6. The assessee is a charitable institution which was granted provisional registration under section 12A(1)(ac)(vi) on 27.05.2021 and provisional approval under clause (iv) of the first proviso to section 80G(5) on 09.07.2021. On 30.09.2023, the assessee filed applications in Form No. 10AB seeking regular

5 ITA Nos. 518, 520 & 521/Jodh/2024 Asst. Years: NA registration under section 12AB and regular approval under section 80G(5)(iii). The learned CIT(E), Jaipur, issued notices dated 10.01.2024, 23.01.2024 and 02.02.2024 calling upon the assessee to furnish the prescribed documents and information. The assessee furnished a reply on 03.02.2024. Upon examination of the reply, the learned CIT(E) issued a further show-cause notice dated 06.03.2024, to which the assessee responded on 12.03.2024. According to the learned CIT(E), the assessee did not furnish complete and satisfactory supporting material.

7.

By order dated 31.03.2024, the learned CIT(E) rejected the application for regular registration under section 12AB. The learned CIT(E), inter alia, observed that the assessee had not furnished a complete and legible copy of its governing document, had not established registration under the Rajasthan Public Trust Act, 1959, and was carrying on manpower-supply contracts which, according to him, constituted business activities beyond the stated objects. He further held that, for want of complete ledgers, supporting evidence and particulars of beneficiaries, the genuineness of the activities could not be verified. By the same order, the provisional registration granted on 27.05.2021 was also cancelled.

8.

By a separate order dated 31.03.2024, the application for regular approval under section 80G was rejected principally on the grounds that

6 ITA Nos. 518, 520 & 521/Jodh/2024 Asst. Years: NA registration under section 12A or section 12AB had been denied and that Form No. 10AB had not been filed within the prescribed period reckoned from the commencement of the activities. By the same order, the provisional approval granted on 09.07.2021 was also cancelled. Aggrieved by the aforesaid actions, the assessee has preferred the present three appeals.

9.

At the time of hearing, the learned AR submitted that the assessee is now duly registered under the Rajasthan Public Trust Act, 1959 and the registration certificate is available on record. It was submitted that this material document was not available before the learned CIT(E) when the impugned orders were passed. Since the absence of registration under the Rajasthan Public Trust Act, 1959 constituted one of the principal reasons for rejection of the applications, the learned AR prayed that the applications for regular registration under section 12AB and regular approval under section 80G be restored to the file of the learned CIT(E) for verification and fresh adjudication.

10.

The learned DR submitted that the registration now produced by the assessee requires verification by the learned CIT(E). He submitted that the eligibility of the assessee for registration under section 12AB and approval under

7 ITA Nos. 518, 520 & 521/Jodh/2024 Asst. Years: NA section 80G should be examined and decided by the learned CIT(E) afresh on merits and in accordance with law.

11.

We have considered the rival submissions and perused the material placed on record. The regular registration under section 12AB was, inter alia, declined on the ground that the assessee had failed to establish its registration under the Rajasthan Public Trust Act, 1959. The connected application under section 80G was also rejected by placing reliance upon the rejection of registration under section 12AB and the alleged failure to comply with the Rajasthan Public Trust Act, 1959.

12.

The learned AR has now produced the registration under the Rajasthan Public Trust Act, 1959 and has submitted that the same was not available before the learned CIT(E). The said registration has a direct bearing upon one of the principal reasons recorded in the impugned orders. Its authenticity, effective date, validity and applicability to the assessee have not been examined by the learned CIT(E). The consequences flowing from such registration also require examination by the competent authority.

13.

In these circumstances, and having regard to the concurrence of both sides that the matter requires examination by the learned CIT(E), we consider it

8 ITA Nos. 518, 520 & 521/Jodh/2024 Asst. Years: NA just and proper to set aside the impugned orders to the extent they reject the applications for regular registration under section 12AB and regular approval under section 80G. The applications are restored to the file of the learned CIT(E) for fresh adjudication.

14.

The learned CIT(E) shall verify the registration produced by the assessee under the Rajasthan Public Trust Act, 1959. The learned CIT(E) shall thereafter examine the assessee’s eligibility for registration under section 12AB and approval under section 80G afresh, on the basis of the complete material furnished by the assessee and in accordance with the law applicable to the relevant applications.

15.

It is clarified that the remand is not confined merely to the verification of the registration under the Rajasthan Public Trust Act, 1959. The learned CIT(E) shall be at liberty to examine all other statutory requirements arising from the applications, including the completeness of Form No. 10AB, genuineness of the activities, supporting accounts and documents, compliance with the prescribed time limit, commencement of activities and, in the proceedings under section 80G, the existence of a valid registration under section 12A or section 12AB. All such issues shall be decided independently in accordance with law.

9 ITA Nos. 518, 520 & 521/Jodh/2024 Asst. Years: NA 16. The assessee shall furnish the registration certificate and all other documents and explanations required for adjudication and shall extend full cooperation in the proceedings. The learned CIT(E) shall afford a reasonable opportunity of being heard to the assessee and thereafter pass speaking orders in accordance with law. We have not expressed any opinion on the merits of the applications.

17.

Accordingly, the issue relating to regular registration under section 12AB in ITA No. 518/Jodh/2024 and the issue relating to regular approval under section 80G raised through the first set of grounds in ITA No. 521/Jodh/2024 are restored to the file of the learned CIT(E) for fresh adjudication in accordance with law. To this extent, ITA Nos. 518 and 521/Jodh/2024 are allowed for statistical purposes.

18.

Since the matters relating to regular registration and regular approval have been restored, the consequential issues concerning cancellation of the provisional registration under section 12A and provisional approval under section 80G also require reconsideration. We, therefore, direct the learned CIT(E) to consider and decide the cancellation of provisional registration, which is the subject matter of ITA No. 520/Jodh/2024, together with the application for regular registration. Likewise, the cancellation of provisional approval challenged through

10 ITA Nos. 518, 520 & 521/Jodh/2024 Asst. Years: NA the second set of grounds in ITA No. 521/Jodh/2024 shall be considered and decided together with the application for regular approval under section 80G. A reasonable opportunity of being heard shall be afforded to the assessee. In view of these directions, no separate adjudication survives in ITA No. 520/Jodh/2024 or in respect of the second set of grounds in ITA No. 521/Jodh/2024. The said appeal and grounds are, accordingly, disposed of as infructuous.

19.

In the result:

- ITA No. 518/Jodh/2024 is allowed for statistical purposes; - ITA No. 520/Jodh/2024 is dismissed as infructuous; and - ITA No. 521/Jodh/2024 is allowed for statistical purposes insofar as the first set of grounds is concerned, while the second set of grounds is disposed of as infructuous.

Order pronounced in Open Court on 04 / 08 / 2026

Sd/- Sd/- (SAKTIJIT DEY) (MAKARAND VASANT MAHADEOKAR) ACCOUNTANT MEMBER VICE PRESIDENT Dated : 04 / 08 / 2026. Nimisha, Sr. PS

11 ITA Nos. 518, 520 & 521/Jodh/2024 Asst. Years: NA True Copy Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File

BY ORDER,

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