SRI MAHALAKSHMI TRUST ,BANGALORE vs. COMMISSIONER OF INCOME TAX, EXEMPTIONS , BANGALORE

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ITA 2161/BANG/2025Status: DisposedITAT Bangalore30 April 20264 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal, finding that the CIT(E) passed a cryptic order by relying solely on the AO's report without independent analysis or providing a proper hearing to the assessee.

What were the facts?

The assessee, a registered religious trust, applied for regular registration after amending its trust deed. The CIT(E) rejected the application, citing missing mandatory clauses and inadequate expense bifurcation, without providing a personal hearing or passing a speaking order.

What were the issues?

Whether the CIT(E) properly rejected the application for registration without providing a personal hearing and passing a speaking order, and whether the assessee's failure to upload the amended trust deed was a bonafide mistake.

Which sections of the Income-tax Act were involved?

Section 12AB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH : BANGALORE

Before: SHRI PRASHANT MAHARISHI & SHRI SOUNDARARAJAN K.

For Respondent: Shri Muthu Shankar, CIT-DR

IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH : BANGALORE

BEFORE SHRI PRASHANT MAHARISHI, VICE PRESIDENT AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER

ITA No. 2161/Bang/2025 Assessment Year : NA

M/s. Sri Mahalakshmi Trust, The Commissioner #14/33, 37th Cross, 8th Block, of Income Tax Jayanagar, (Exemptions), Bangalore – 560 082. Bangalore. PAN: ABATS9663G Vs. APPELLANT RESPONDENT

: Shri Narendra Sharma, Assessee by Advocate Revenue by : Shri Muthu Shankar, CIT-DR

Date of Hearing : 03-02-2026 Date of Pronouncement : 30-04-2026

ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER

This is an appeal filed by the assessee challenging he rejection order of the Ld.CIT(E) dated 14/03/2025 in which the registration sought for u/s. 12AB has been rejected.

2.

The assessee is a registered religious trust under the provisions of the Act. The trust registered their first amendment deed on 04/01/2021. Subsequently, the assessee trust applied for a provisional registration on 08/02/2023 and the provisional registration was also granted on

Page 2 of 4 ITA No. 2161/Bang/2025 28/02/2023. Thereafter the assessee trust started receiving donations and also conducted religious activities. Again on 07/05/2024, the trust registered its second amendment deed. Thereafter the assessee trust applied for regularisation of its registration on 30/09/2024. The AO issued a notice and sought for some details and documents in connection with the said application for regularisation and granted time upto 27/12/2024. The trust requested for additional time and duly complied with the notice on 02/01/2025. The Ld.CIT(E) without communicating any defects, had rejected the application for regularisation on the ground that the assessee’s trust deed does not contain the mandatory clauses and also bifurcation of the other expenses are not provided and also supporting bills for the expenses were not provided. The assessee had mistakenly, failed to upload the second amendment trust deed in which all the mandatory clauses as required by the Ld.CIT(E) was available. The assessee trust instead of challenging the said rejection order before this Tribunal had again filed another application on 28/03/2025 and also enclosed the missing documents as stated in the rejection order. Only at the time of hearing of the second application, the assessee trust came to know that the proper course of action is to file an appeal before this Tribunal against the rejection order of the Ld.CIT(E). Therefore, the Ld.CIT(E) had rejected the second application on 22/09/2025. Thereafter the assessee challenged the first rejection order dated 14/03/2025 before this Tribunal with a delay of 122 days and also enclosed an application to condone the said delay and explained the reasons for the said delay.

3.

We have considered the said application for condonation of delay and we are satisfied that the assessee had not filed the appeal against the first rejection order on the bonafide impression that the second application for registration enclosing the mandatory documents would suffice. Therefore considering the said facts, we are inclined to condone the delay of 122 days in filing the present appeal before this Tribunal.

Page 3 of 4 ITA No. 2161/Bang/2025 4. At the time of hearing, the Ld.AR submitted that the assessee trust had submitted the mandatory documents while filing reply to the notice issued by the AO and thereafter the Ld.CIT(E) without calling for any other details, had rejected the application by saying that the assessee’s trust deed does not contain the mandatory clauses and the details of other expenses have not been explained and also the supporting bills for the expenses were not furnished. The Ld.AR further submitted that the Ld.CIT(E) being a quasi judicial authority ought to have independently applied his mind before rejecting the application but in the present case the Ld.CIT(E) had simply extracted the report of the AO in which the AO had not recommended for registration. The Ld.AR further submitted that the Ld.CIT(E) had not granted a personal hearing before rejecting the application as well as not passed a speaking order and therefore prayed to allow the appeal.

5.

The Ld.DR submitted that the assessee had not submitted the required details and therefore the Ld.CIT(E) had rightly rejected the application for registration.

6.

We have heard the arguments of both sides and perused the materials available on record.

7.

On going through the impugned order, we find that the Ld.CIT(E) had passed a cryptic order in which the Ld.CIT(E) had extracted the report of the jurisdictional assessing officer who has not recommended the registration of the assessee trust. Further, as seen from the said order, no such opportunity of being heard was given to the assessee’s trust and also the Ld.CIT(E) had not independently analysed the issue in detail.

8.

In our view, the Ld.CIT(E) had not considered the issue since he is the authority under the Act to grant or reject the registration of a trust. In such circumstances, the Ld.CIT(E) should have issued a show cause notice to the assessee trust and sought for the details based on the report of the jurisdictional assessing officer. Thereafter the Ld.CIT(E) could have passed

Page 4 of 4 ITA No. 2161/Bang/2025 an order by considering the materials furnished by the assessee. Unfortunately, the Ld.CIT(E) had not carried out the procedures in accordance with law but relied on the report of the jurisdictional assessing officer and on that basis, straightaway dismissed the application filed for the registration. The Ld.CIT(E) had also not given any findings about the trust and the reasons for rejecting the application in the impugned order.

9.

Considering the said facts, we are inclined to set aside the order of the Ld.CIT(E) and remit this issue to the file of the Ld.CIT(E) for reconsidering the application filed by the assessee on 08/02/2023 after granting a reasonable opportunity of being heard to the assessee trust. The assessee trust may also furnish the documents required by the Ld.CIT(E) while deciding the application.

10.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 30th April, 2026.

Sd/- Sd/- (PRASHANT MAHARISHI) (SOUNDARARAJAN K.) Vice President Judicial Member

Bangalore, Dated, the 30th April, 2026. /MS / Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. Guard file 6. CIT(A) By order

Assistant Registrar, ITAT, Bangalore

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