SHREE KADI DASA DISAVAL VANIK UTKARSH MANDAL,AHMEDABAD vs. THE CIT(E) AHMEDABAD, AHMEDABAD

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ITA 1153/AHD/2026Status: DisposedITAT Ahmedabad18 May 20267 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the orders of the CIT(E) and restored the matters to his file for fresh adjudication. The assessee was granted one more opportunity to furnish necessary documents and substantiate its claim for both registration and approval.

What were the facts?

The assessee trust applied for registration under Section 12AB and approval under Section 80G. The CIT(E) rejected the application for registration due to non-compliance with notices and lack of documents. The 80G approval was rejected as a consequence of the rejected 12AB registration.

What were the issues?

Whether the CIT(E) erred in rejecting the application for registration under Section 12AB without granting sufficient opportunity and whether the rejection of 80G approval was justified solely on the basis of rejected 12AB registration.

Which sections of the Income-tax Act were involved?

Section 12AB,Section 80G

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD

Before: SHRI SIDDHARTHA NAUTIYAL & SHRI NARENDRA PRASAD SINHA

For Respondent: Shri Prem Prakash Meena, CIT-DR
Hearing: 13.05.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER I.T.A. Nos.1153&1154/Ahd/2026 (Assessment Year: N.A.) Shree Kadi Dasa Disaval Vanik Vs. Commissioner of Utkarsh Mandal, Income Tax (Exemption), C/o. Ashwinbhai Parikh, Ahmedabad 6-B, Valkeshwar Society, B/h. CN Vidhyalay, Ambawadi, Gujarat-380015 [PAN No.AABTS0982N] (Appellant) .. (Respondent) Shri Dhinal Shah, AR Appellant by : Respondent by: Shri Prem Prakash Meena, CIT-DR Date of Hearing 13.05.2026 18.05.2026 Date of Pronouncement O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: Both appeals have been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Exemption), (in short “Ld. CIT(E)”), Ahmedabad vide orders dated 08.03.2026. Since common facts and issues for consideration are involved for both the appeals before us, both the appeals are being disposed by way of a common order.

2.

The assessee has taken the following grounds of appeal:

ITA No. 1153/Ahd/2026 “The learned CIT(E) has erred in rejecting registration under section 12AB on the ground that the assessee did not comply with the notice dated 14-02-2026 in as much as the sufficient opportunity of being heard ought to have been granted and therefore the order rejecting an application should be set aside.”

ITA Nos. 1153&1154/Ahd/2026 Shree Kadi Dasa Disaval Vanik Utkarsh Mandal vs. CIT(E) Asst. Year –N.A. - 2– We shall first take up the appeal relating to rejection of approval under section 12A of the Act

3.

The brief facts of the case are that the assessee trust, namely SHREE KADI DASA DISAVAL V ANIK UTKARSH MANDAL, filed an application in Form No.10AB seeking registration under section 12A/12AB of the Income-tax Act, 1961 (“the Act”). The application was filed before the ld. CIT(Exemptions), Ahmedabad vide Application No. CIT(EXEMPTION), AHMEDABAD/2025-26/12AA/39024 and was required to be examined in terms of section 12AB(1)(b) of the Act read with Rule 17A of the Income-tax Rules, 1962, which governs the procedure for fresh registration and prescribes the documents and evidences required to be furnished for the purpose of satisfying the prescribed authority regarding the genuineness of activities of the trust and the conformity of such activities with the stated charitable objects.

4.

During the course of proceedings, the ld. CIT(Exemptions) issued notices calling upon the assessee to furnish requisite details, documentary evidences and supporting material as prescribed under Rule 17A(2) of the Income-tax Rules, 1962. As recorded in the impugned order, opportunity of hearing was afforded on 14.02.2026. However, according to the ld. CIT(Exemptions), the assessee neither furnished any submissions / details / documents in response to the notices issued nor sought any adjournment in the matter. The ld. CIT(Exemptions) accordingly observed that in absence of supporting documentary evidences, he was unable to satisfy himself regarding (i) the genuineness of the activities of the trust or

ITA Nos. 1153&1154/Ahd/2026 Shree Kadi Dasa Disaval Vanik Utkarsh Mandal vs. CIT(E) Asst. Year –N.A. - 3– institution, (ii) whether the activities were being carried out in consonance with the objects of the trust, and (iii) whether other laws material for achieving the charitable objects had been complied with. Proceeding on the aforesaid basis, the ld. CIT(Exemptions) rejected the application filed in Form No.10AB under section 12AB of the Act and further cancelled the provisional registration, if any, granted earlier to the assessee. The ld. CIT(Exemptions) also directed the assessee to compute its tax liability under section 115TD of the Act read with Rule 17CB of the Income-tax Rules and comply with the consequential statutory requirements prescribed thereunder.

5.

The assessee is in appeal before us against the aforesaid order passed by the ld. CIT(Exemptions).

6.

We have heard the rival submissions and perused the material available on record. It is observed that the rejection of registration under section 12AB has primarily been made on account of non-compliance and failure on the part of the assessee to furnish the requisite documents and evidences before the ld. CIT(Exemptions). At the same time, it is also noticed that the matter has been decided without examination of the relevant evidences and supporting material which the assessee now claims to be in a position to furnish before the authorities. The proceedings relating to grant of registration under section 12AB carry significant tax consequences inasmuch as such registration forms the foundation for claiming exemption under sections 11 and 12 of the Act.

ITA Nos. 1153&1154/Ahd/2026 Shree Kadi Dasa Disaval Vanik Utkarsh Mandal vs. CIT(E) Asst. Year –N.A. - 4– 7. We further note that the Coordinate Bench of the Tribunal in the case of Udhna Academy Education Trust in ITA No.970/Ahd/2026 vide order dated 07.05.2026 had restored the issue relating to rejection of registration under section 12AB to the file of the ld. CIT(Exemptions) for de novo adjudication after observing that the assessee should be granted one more effective opportunity to furnish the requisite documents and establish the genuineness of its activities and objects.

8.

Having regard to the entirety of facts and in the interest of substantial justice, we are of the considered view that the assessee deserves one more opportunity to substantiate its claim for registration under section 12AB of the Act. Accordingly, we set aside the impugned order passed by the ld. CIT(Exemptions) and restore the matter to his file for fresh adjudication in accordance with law. The ld. CIT(Exemptions) shall examine the application afresh after providing reasonable and adequate opportunity of being heard to the assessee. The assessee is also directed to furnish all requisite documents, evidences and details as prescribed under Rule 17A(2) of the Income-tax Rules, 1962 and fully cooperate in the proceedings without seeking unnecessary adjournments. Needless to clarify, the ld. CIT(Exemptions) shall adjudicate the issue independently on merits in accordance with law after examining the genuineness of activities and the objects of the trust.

9.

In the result, the appeal of the assessee relating to rejection of registration under section 12AB of the Act is allowed for statistical purposes.

ITA Nos. 1153&1154/Ahd/2026 Shree Kadi Dasa Disaval Vanik Utkarsh Mandal vs. CIT(E) Asst. Year –N.A. - 5– We shall now take up the appeal relating to rejection of approval under section 80G(5) of the Act.

10.

The assessee has raised the following grounds of appeal:

ITA No. 1154/Ahd/2026 “The learned CIT(E) has erring in rejecting application under section 80G on the ground that the application under section 12AB has been rejected in as much as the CIT(A) ought to have granted sufficient opportunity of being heard and therefore the order rejecting an application should be set-aside.” 11. The brief facts relating to this issue are that the assessee filed an application in Form No.10AB seeking approval under section 80G(5) of the Income-tax Act, 1961 before the ld. CIT(Exemptions), Ahmedabad vide Application No. CIT(EXEMPTION), AHMEDABAD/2025- 26/12AA/38744. During the course of proceedings, the ld. CIT(Exemptions) observed that the assessee did not possess a valid registration under section 12A/12AB of the Act either in the form of a regular registration order in Form No.10AD or a valid provisional registration in Form No.10AC. The ld. CIT(Exemptions) accordingly held that registration under section 12A/12AB is a mandatory pre-condition for grant of approval under section 80G(5) of the Act. Reliance was placed upon the judgment of the Hon’ble Gujarat High Court in CIT (Exemptions) v. Shree Tapeshwar Hanumanji Bajrang Charity Trust wherein it was held that in absence of valid registration under section 12A, approval under section 80G cannot be granted. Accordingly, the ld. CIT(Exemptions) rejected the application filed under section 80G(5) vide

ITA Nos. 1153&1154/Ahd/2026 Shree Kadi Dasa Disaval Vanik Utkarsh Mandal vs. CIT(E) Asst. Year –N.A. - 6– DIN No. ITBA/EXM/F/EXM45/2025-26/1087003532(1) dated 08.03.2026 as non-maintainable.

12.

The assessee is in appeal before us against the aforesaid order.

13.

We have considered the facts of the case and the material available on record. We find that the rejection of approval under section 80G(5) has been made solely on the ground that the assessee did not possess valid registration under section 12A/12AB of the Act. However, while adjudicating the connected appeal relating to registration under section 12AB hereinabove, we have already restored the matter to the file of the ld. CIT(Exemptions) for fresh adjudication. Therefore, the very foundation on which the approval under section 80G has been rejected presently no longer survives and the issue relating to section 80G approval becomes consequential and intrinsically linked to the outcome of registration proceedings under section 12AB.

14.

We further note that in identical circumstances, the Coordinate Bench of the Tribunal in the case of Udhna Academy Education Trust in ITA No.971/Ahd/2026 vide order dated 07.05.2026 restored the issue relating to rejection of approval under section 80G of the Act to the file of the ld. CIT(Exemptions) for fresh adjudication after deciding the issue of registration under section 12A/12AB.

15.

Accordingly, following the same reasoning and in the interest of justice, we set aside the impugned order passed by the ld.

ITA Nos. 1153&1154/Ahd/2026 Shree Kadi Dasa Disaval Vanik Utkarsh Mandal vs. CIT(E) Asst. Year –N.A. - 7– CIT(Exemptions) rejecting the application under section 80G(5) of the Act and restore the matter to his file for de novo adjudication in accordance with law. The ld. CIT(Exemptions) shall reconsider the assessee’s application for approval under section 80G(5) afresh after adjudicating the issue relating to registration under section 12AB and after providing adequate opportunity of being heard to the assessee.

16.

In the result, the appeal of the assessee relating to rejection of approval under section 80G(5) of the Act is allowed for statistical purposes.

17.

In the combined result, both the appeals of the assessee are allowed for statistical purposes. This Order is pronounced in the Open Court on 18/05/2026

Sd/- Sd/- (NARENDRA P. SINHA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 18/05/2026 TANMAY, Sr. PS TRUE COPY आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad

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