UDARTA CHARITABLE TRUST SAVARKUNDLA,SAVARKUNDLA vs. CIT(EXEMPTION), AHMEDABAD

PDF · subscribers
ITA 308/AHD/2026Status: DisposedITAT Chandigarh12 June 2026AY 2025-20265 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal and set aside the order of the CIT(E). The matter was restored to the CIT(E) for fresh adjudication, granting the assessee one more opportunity to present its case and documents.

What were the facts?

The assessee trust applied for renewal of registration under Section 12A(1)(ac)(ii). The CIT(E) rejected the application due to non-compliance with show cause notices, without adjudicating on merits. The assessee cited reasons for non-compliance, including being unaware of online proceedings and operating from a remote location.

What were the issues?

Whether the rejection of a registration application solely on procedural non-compliance, without examining submitted documents and principles of natural justice, is valid.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD

Before: SHRI TR SENTHIL KUMAR & SHRI NARENDRA PRASAD SINHA

For Respondent: Shri Ashesh R Rewar, CIT-DR
Hearing: 11.06.2026Pronounced: 12.06.2026

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 30.10.2025 in the proceeding u/s 12A(1)(ac)(ii) of the Income Tax Act [hereinafter referred as “the Act”].

2.

There was delay of 33 days in filing of the appeal. The assessee has filed a condonation application explaining the reason for delay. It has been explained that order of Ld. CIT(E) was received on email only which couldn’t be accessed in time as the trustees were not conversant with the online proceedings. Considering the explanation of the assessee, the delay in filing of the appeal is condoned.

3.

The brief facts of the case are that the assessee had filed an application for renewal of registration of the Trust 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 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. Aggrieved with the order of the Ld. CIT(E), the assessee is in appeal before us.

4.

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 That the Learned Commissioner of income-tax (Exemptions), Ahmedabad has erred in law and on facts in rejecting the Appellant Trust's application for registration under Section 12A(1)(ac)(ii) read with Section 12AB of the income- tax Act, 1961, solely on the ground of alleged non-compliance with show cause notices, without adjudicating the application on merits. 2. That the impugned order is bad in law, arbitrary and unsustainable, inasmuch as all basic and mandatory documents required for verification under Section 12AB and Rule 17A, including the past audit reports, Trust Deed, Trust registration certificate, NO, and Undertaking of Applicability of all provisions of Income Tax Act. 1961, were already submitted along with Form No. 10AB at the time of filing of the application. 3. That the Learned CIT(E) failed to appreciate that only replies to the show cause notices were not submitted, whereas the foundational documentary evidence necessary to verify the objects, genuineness of activites and statutory compliance of the Trust was already available on record, and therefore the application could and ought to have been decided on the basis of the material already furnished. 4. That rejection of the application merely on account of non-reply to show cause notices, without examination of the documents already submitted, amounts to elevating procedural non-compliance over substantive justice, which is impermissible in proceedings relating to grant of registration to charitable or religious trusts. 5. That the Learned CIT(E) was fully empowered to examine and verify the documents already uploaded along with the application under Form No. 10AB and to record satisfaction or otherwise regarding the genuineness of activities and objects of the Trust, and mere non-response to portal-based notices could not have been treated as conclusive ground for rejection without such verification. 6. That in the absence of actual knowledge of issuance of show cause notices, no adverse inference ought to have been drawn against the Appellant Trust and passing of the impugned order without ensuring effective service amounts to violation of principles of natural justice. 7. That the non-submission of replies was neither deliberate nor with any intention to suppress facts or withhold information, and there is no finding in the impugned order disputing the charitable or religious nature of the objects or the genuineness of activities of the Trust 8. That the impugned rejection has caused grave prejudice to the Appellant Trust and the same deserves to be set aside, and the matter be restored to the file of the Learned CIT(E) for fresh adjudication on merits after granting a reasonable and effective opportunity of being heard and permitting submission of replies and explanations, if required. 9. That the Appellant craves leave to add to, alter, amend or withdraw any of the above grounds at or before the time of hearing

5.

None was present on behalf of the assessee. Sh. Hatin Bharmal, Ld. AR of the assessee had attended the hearing on 10.06.2025 and submitted that Ld. CIT(E) had allowed only two opportunities of hearing on 06.08.2025 and on 10.10.2025, which could not be attended due to fault of the counsel. He explained that the assessee trust was operating from a remote location and trustees were not aware of the proceedings. He, therefore, requested that the assessee may be granted one more opportunity of hearing by restoring the matter to the file of the Ld. CIT(E) for fresh adjudication. The matter was adjourned on that day for filing letter of authority by the counsel, which has since been brought on record.

4 6. Per contra, Shri Ashish R Rewar, the Ld. CIT-DR, had no objection if the matter was set aside to the file of Ld. CIT(E) for allowing another opportunity to the assessee.

7.

We have considered the request of the assessee. It is observed that the application of the assessee-trust for registration under section 12A(1)(ac)(ii) of the Act 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 two opportunities were granted to the assessee. Considering that the assessee is a charitable trust operating from a remote location and 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.

8.

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

Order pronounced in the Court on 12/06/2026 at Ahmedabad.

Sd/- Sd/- (TR SENTHIL KUMAR) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Dated – 12th June, 2026 Neelesh, Sr. P.S (True Copy) 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 आयकर अपीलीय आयकर आयकर अपीलीय अपीलीय अिधकरण अपीलीय अिधकरण अिधकरण, अहमदाबाद अिधकरण अहमदाबाद अहमदाबाद / ITAT, Ahmedabad अहमदाबाद

More judgments on Section 12A(1)(ac)(ii)

All 679 judgments and leading authorities on Section 12A(1)(ac)(ii) →

Recent GST High Court judgments

Search GST case law →