SARVA MANGAL CHARITABLE TRUST,AHMEDABAD vs. WARD 2,EXEMP, AHM, AHMEDABAD

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ITA 1207/AHD/2026Status: DisposedITAT Ahmedabad29 June 2026AY 2026-276 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that only one opportunity was granted, which is insufficient to satisfy 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. The CIT(E) rejected the application and cancelled provisional registration due to non-compliance with notices and lack of submission of details. The assessee contended that they were not afforded a proper opportunity of being heard.

What were the issues?

Whether the CIT(E) properly afforded a reasonable opportunity of being heard to the assessee before rejecting the registration application and cancelling provisional registration.

Which sections of the Income-tax Act were involved?

Section 12A,Section 12AB,Section 115TD,Section 282

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD

Before: MS SUCHITRA KAMBLE & SHRI NARENDRA PRASAD SINHA

For Appellant: Shri Vinod Mehta, AR
For Respondent: Shri R P Rastogi, CIT-DR
Hearing: 20.05.2026Pronounced: 29.06.2026

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 08.03.2026 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 of the Act. The Ld. CIT(E) had called for certain details from the assessee in order to examine

ITA No. 1207Ahd/2026 Sarva Mangal CharitableTrust Vs. CIT (Exemption) 2

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 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.

The Appellant humbly submits that the order dated 08/03/2026 passed by the Commissioner of Income Tax (Exemptions), Ahmedabad (hereinafter 'the Ld. CIT(E)'), rejecting the application for regular registration filed in Form No. 10AB under Section 12AB of the Income Tax Act, 1961 ('the Act'), and cancelling the provisional registration, is bad in law, contrary to the facts on record, and is liable to be set aside on the following grounds, each of which is without prejudice to the others: Ground No. 1: Rejection on account of non-appearance Order passed in violation of the principles of natural justice The Ld. CIT(E) erred in rejecting the application solely on the ground that the Appellant did not file any submission or documents in response to notices, without first establishing that the said notices were validly served on the Appellant in accordance with Section 282 of the Act read with Rule 127 of the Income Tax Rules, 1962, and without affording the Appellant an effective and adequate opportunity of being heard as mandated under Section 12AB(1)(b)(ii) of the Act. Ground No. 2: Rejection without specifying documents required Opportunity of hearing The Ld. CIT(E) erred in rejecting the application without indicating to the Appellant the precise documents and information required under Rule 17A(2) of the Income Tax Rules, 1962 so as to satisfy the authority of the matters enumerated in Section 12AB(1)(b)(i) of the Act, thereby rendering the purported opportunity of hearing neither specific nor meaningful and, consequently, not a reasonable opportunity within the contemplation of the statute. Ground No. 3:

ITA No. 1207Ahd/2026 Sarva Mangal CharitableTrust Vs. CIT (Exemption) 3

Rejection without any inquiry or examination on merits Non-exercise of statutory jurisdiction

The Ld. CIT(E) erred in rejecting the application without conducting any inquiry into, or recording any finding upon, the genuineness of the activities of the Trust, the consonance of such activities with the objects of the Trust, or the compliance by the Trust with applicable laws being the very matters in respect of which the authority is required to satisfy itself before passing an order under Section 12AB(1)(b) of the Act. Ground No.4:

Order is non-speaking - Absence of reasoned findings on merits

The Ld. CIT(E) erred in passing an order of rejection that is devoid of any reasoned finding on the merits of the application and does not record the satisfaction of the authority as required by Section 12AB(1)(b) of the Act, rendering the order cryptic, non-speaking, and unsustainable in law. Ground No. 5:

Cancellation of provisional registration-Consequential and equally vitiated by the same deficiency of opportunity

The Ld. CIT(E) erred in cancelling the provisional registration of the Appellant as a consequence of the rejection of the Form 10AB application, when the single the same opportunity purportedly afforded on 22/02/2026 was neither adequate nor meaningful and did not satisfy the requirement of a 'reasonable opportunity of being heard' mandated under Section 12AB(1)(b)(ii) of the Act procedural deficiency that vitiates the rejection equally vitiates the consequential cancellation of provisional registration. Ground No. 6:

Directions to compute and pay tax under Section 115TD without legal basis Premature and without legal basis.

The Ld. CIT(E) erred in directing the Appellant to compute its tax liability under Section 115TD of the Act and to pay the same within the prescribed timeline, when the Appellant is in appeal against the very order of rejection and cancellation that is the precondition for the application of Section 115TD, rendering such direction premature and without legal basis, the Appellant being entitled to the benefit of the extended timeline under Section 115TD(5) of the Act upon filing of this appeal

Ground No. 7:

ITA No. 1207Ahd/2026 Sarva Mangal CharitableTrust Vs. CIT (Exemption) 4 Without prejudice Appellant is a genuine charitable trust fully eligible for registration under Section 12AB Without prejudice to the foregoing, the Ld CIT(E) erred in rejecting the application for registration, as the Appellant is a genuine charitable trust carrying out charitable activities in accordance with its objects as set out in its trust deed, and is fully eligible for registration under Section 12AB of the Act, having complied with all applicable conditions and legal requirements, and being ready and willing to furnish all documents as prescribed under Rule 17A(2) of the Income Tax Rules, 1962. .

4.

Shri Vinod Mehta, the Ld. AR of the assessee submitted that Ld. CIT(E) had allowed only one opportunity of hearing on 22.02.2026. The Ld. AR explained that the Ld. CIT(E) had passed the order without taking into account the substantial details and documents filed along with the application and 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 R P Rastogi, 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 material 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 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

ITA No. 1207Ahd/2026 Sarva Mangal CharitableTrust Vs. CIT (Exemption) 5 issued from time of time, we don’t find reference of any notice other than the notice dated 22.02.2026. 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.

7.

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

Order pronounced in the Court on 29/06/2026 at Ahmedabad.

Sd/- Sd/- (SUCHITRA KAMBLE) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Dated – 29th June, 2026 (True Copy) Neelesh, Sr. P.S

ITA No. 1207Ahd/2026 Sarva Mangal CharitableTrust Vs. CIT (Exemption) 6

आदेश आदेश क� आदेश आदेश क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order forwarded to : 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 उप/सहायक उप उप सहायक सहायक पंजीकार सहायक पंजीकार पंजीकार आयकर अपीलीय आयकर अपीलीय अिधकरण अिधकरण, अहमदाबाद अहमदाबाद / ITAT, Ahmedabad आयकर आयकर अपीलीय अपीलीय अिधकरण अिधकरण अहमदाबाद अहमदाबाद

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