SHREE ASHARA PARIVAR TRUST,RAJKOT vs. CIT(EXEMPTION) AHMEDABAD, AHMEDABAD

Brief facts of the case that The appellate trust is formed to perform various charitable activities in form of Educational and Medical activities, relief to poor, and conducting various programs to impart awareness and education in the society and its duly registered with Charity Commissioner, Rajkot Office as public charitable trust. Appellate had applied for the provisional registration by filing Form 10A on 29.01.2024 and was granted the provisional registration. After that Trust had applied for Final registration by filing form 10AB on 10.09.2024. That the application was rejected by Ld.PCIT on 29.03.2025.

That the assessee has challenge the legality and validity of impugned order dated 29.03.2025 of the Ld. CIT(E) by filing the appeal before us. i. During the course of hearing, the Ld.AR of the assesse submitted that requested for an opportunity may kindly be given to the assessee to explain the case before lower authorities. ii. On the contrary, the Ld. DR for the revenue relied on the order of the Ld. CIT(E). however, the Ld. DR did not objected the prayer of the Ld.AR.

We have heard both the parties and perused the material available on record. We note that the order u/s. 80(G)is bad in law. The order denying the registration is passed without proper appreciation of facts or application of mind, making it unsustainable in the eyes of law. The learned CIT (E) Ahmedabad has erred in law as well as on facts by rejecting final registration application U/s. 80G (5)(iii) without providing sufficient opportunity of being heard. The Ld.CIT(E) has rejected final registration application u/s. 80G(5)(iii) by relying upon order of rejection made u/s. 12AB(1)(b)(ii) which itself was appealable order, and the appeal was allowed by the Hon’ble ITAT, and held that; “We note that the trust has applied for registration u/s. 12(1)(ac)(iii) of the Act on 21.08.2025 and in support of application the assessee submitted all requisite documents. The trust incorporate since 06.07.1976 but the assessee has started activity and recently in 2024 started accepting donation and incurred administration expenditure on distribution of blanket and cloth to the needy people. The trust is created for the public at large. The object clause (Clause No. 4) and initial paras of Trust deed clearly states that trust is created to perform various charitable activities for the benefit for society, for the benefit of all public without discrimination on the basis of any caste, creed, religion or Sex. That the assessee trust has also filed undertaking about the activity to the trust which are charitable in nature u/s. 2(15) of the Act. The trust has got regarded with charity commissioner as Public Charitable Trust. The trust has not violated any provision of the Income Tax Act. That the application of trust was rejected on the ground that applicant has failed to prove with corroborative evidences that it has not incurred expenditure towards the above objects confining to the members of Ashara Parivar/Family which constitute private religious purpose which does not ensure for the benefit of the public. Since the object of assessee are not as per the scheme of provisions provided under Income Tax Act, there is specified violation under clause (c) below explanation to section12AB(4) of Income Tax Act, 1961. We have perused the objective clause of the assessee trust, that the object of trust to help the poor by way of helping the society in the field of education, medical health, protection of environment without discrimination on the basis of cast, creed, region, or sex. That the Ld.CIT(E) has rejected the application on the issue of specified violation in clause (c) explanation section 12AB of the Act without any evidences to prove the actually specified violation. The Ld.AR submitted that no reasonable opportunity was given to explain the case before the cancelling the application for registration. Before us, the assessee submitted detailed reply in support of the issue on which the application for the registration was rejected. Considering the above facts and circumstances of the case, we are of the view that the assessee has not given sufficient opportunity to explain the case before the Ld.CIT(E). We note that it is settled law that principles of natural justice and fair play require that the affected party is granted sufficient opportunity of being heard to contest his case. Therefore, without delving much deeper into the merits of the case, in the interest of justice, we restore the matter back to the file of Ld.CIT(E) for de novo adjudication and pass a speaking order after affording sufficient opportunity of being heard to the assessee, who in turn, is also directed to submit its stand during the course of hearing. Therefore, we deem it fit and proper to set aside the order of the Ld.CIT(E) and remit the matter back to the file of the Ld.CIT(E) to adjudicate the issue afresh on merits.”

In view of the facts and circumstances of the case, we hereby restore the matter back to the file of the Ld. CIT(E ) for fresh adjudication along with ITA No.360/Rjt/2025.

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