SHRI SWAMINARAYAN EDUCATION TRUST,DHARAMPUR vs. INCOME TAX OFFICER, WARD EXEMPTION, SURAT, SURAT

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ITA 575/SRT/2026Status: DisposedITAT Surat15 July 2026AY 2026-274 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that rejecting the application with only one opportunity for hearing violates the principles of natural justice. Therefore, the impugned order was set aside to allow the assessee another opportunity to present their case.

What were the facts?

The assessee trust applied for registration under Section 12A(1)(ac)(ii) of the Income Tax Act. The CIT(E) rejected the application and cancelled provisional registration due to non-compliance and lack of adequate hearing opportunity.

What were the issues?

Whether the CIT(E) provided adequate opportunity of being heard to the assessee before rejecting the application for registration under Section 12A.

Which sections of the Income-tax Act were involved?

Section 12A(1)(ac)(ii)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “DB” BENCH, SURAT

Before: T R SENTHIL KUMAR & SHRI NARENDRA PRASAD SINHA

For Appellant: Shri Rajesh Upadhyay, AR
For Respondent: Shri Mukesh Jain, CIT-DR
Hearing: 20.05.2026Pronounced: 15.07.2026

PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:

This appeal is filed by the assessee against the order of Commissioner of Income Tax (Exemption), Ahmedabad, [in short “CIT(E)”], dated 09.03.2026 in the proceeding u/s 12A of the Income Tax Act.

2.

The brief facts of the case are that the assessee had filed an application in Form No. 10AB for registration u/s. 12A(1)(ac)(ii) of the Act. The Ld. CIT(E) had called for certain details from the assessee in order to examine the genuineness of the activities of the trust and to satisfy himself that the activities were in consonance with the objects of the trust. As no

ITA No. 575/Srt/2026 Shri Swaminarayan Education Trust Vs.ITO(Exemption) 2 compliance was made by the assessee, the Ld. CIT(E) had rejected the application of the assessee vide the impugned order and the provisional registration granted earlier was also cancelled.

3.

Aggrieved with the order of the Ld. CIT(E), the assessee is in appeal before us. The following grounds have been taken in this appeal:

1.

Ld. CIT(E) has erred in law and on fact to reject appellant renewal application filed u/s 12AA of the act, ex-part and that too without providing adequate hearing opportunity. 2. Ld. CIT(E) has erred in law and on fact to reject appellant renewal application filed u/s 12AA ignoring fact that the appellant trust is very old trust and holding registration as such, since its formation. It is also carried out various activities, details of which were filed along with renewal application.

4.

Shri Rajesh Upadhyay, the AR of the assessee submitted that Ld. CIT(E) had allowed only one opportunity of hearing on 23.02.2026. The Ld. AR explained that the Ld. CIT(E) had passed the order without taking into account the substantial details and documents filed with the application and also without giving proper opportunity of being heard to the assessee. He therefore, requested that the assessee may be allowed another opportunity of being heard by setting aside the matter to the file of the Ld. CIT(E).

5.

Per contra, Shri Mukesh Jain, the Ld. CIT-DR, supported the order of Ld. CIT(E). He, however, had no objection if the matter was set aside the file of the Ld. CIT(E) for allowing another opportunity to the assessee.

6.

We have carefully considered the facts of the case and the materials available on record. It is observed that the application of the assessee- trust for registration under section 12A of the Income-tax Act, 1961 came

ITA No. 575/Srt/2026 Shri Swaminarayan Education Trust Vs.ITO(Exemption) 3 to be rejected by the Ld. CIT(E) primarily on account of non-compliance with the notice issued seeking certain documents and clarifications. From the records, it is evident that only one effective opportunity was granted to the assessee. The interest of natural justice cannot be served by rejecting the application of the assessee by allowing only one opportunity. Though the Ld. CIT(E) has mentioned in the order that notices were issued from time of time, we don’t find reference of any notice other than the notice dated 23.02.2026. Considering that the assessee is a charitable trust seeking registration under the provisions of the Act and that the issue relates to the examination of its objects and activities, we are of the considered view that one more opportunity deserves to be afforded to the assessee to place the requisite material before the Ld. CIT(E). The principles of natural justice require that a reasonable and effective opportunity of being heard be granted before an adverse decision is taken. In the facts and circumstances of the present case, and without expressing any opinion on the merits of the application, we deem it appropriate, in the interest of justice, to set aside the impugned order and restore the matter to the file of the Ld. CIT(E) for fresh adjudication. The assessee shall furnish all the documents, explanations and evidences as may be called for by the Ld. CIT(E) and shall fully cooperate in the proceedings. The Ld. CIT(E) shall afford adequate opportunity of being heard to the assessee and thereafter pass a speaking order in accordance with law. Accordingly, the impugned order is set aside and the matter is restored to the file of the Ld. CIT(E) for de novo consideration. The grounds raised by the assessee are allowed for statistical purposes.

ITA No. 575/Srt/2026 Shri Swaminarayan Education Trust Vs.ITO(Exemption) 4

7.

In the result, the appeal of the assessee is allowed for statistical purpose.

Order pronounced in the Court on 15/07/2026 at Ahmedabad.

Sd/- Sd/- (T R SETHIL KUMAR) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Dated – 15th July, 2026 Neelesh, Sr. P.S (True Copy) आदेश क� आदेश क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order forwarded to : आदेश आदेश क� क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A) 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण / DR, ITAT, 6. गाड� फाईल /Guard file. आदेशानुसार/BY ORDER, आदेशानुसार आदेशानुसार आदेशानुसार पंजीकार (Dy./Asstt.Registrar) उप/सहायक उप सहायक पंजीकार उप उप सहायक सहायक पंजीकार पंजीकार आयकर आयकर अपीलीय आयकर आयकर अपीलीय अपीलीय अिधकरण अपीलीय अिधकरण अिधकरण, अहमदाबाद अिधकरण अहमदाबाद अहमदाबाद / ITAT, Ahmedabad अहमदाबाद

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