JESUS CHARITABLE TRUST,GURGAON vs. INCOME TAX OFFICER, EXEMPTION WARD-1, JAIPUR, JAIPUR

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ITA 691/JPR/2025Status: DisposedITAT Jaipur25 August 2026AY 2021-225 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) failed to adjudicate a material ground of appeal concerning the assessee's registration under Section 12A/12AA. This omission was significant as the CIT(A) relied on the non-registration to deny exemption. Therefore, the impugned order was set aside.

What were the facts?

The assessee, Jesus Charitable Trust, claimed exemption under Section 10(23C)(iiiad) of the Income Tax Act for AY 2021-22. The Assessing Officer (AO) denied the exemption, citing that the aggregate gross receipts exceeded the prescribed limit and the assessee's 12A registration was rejected. The CIT(A) dismissed the appeal.

What were the issues?

Whether the CIT(A) properly adjudicated all grounds of appeal, particularly the one challenging the assessee's registration status, which was crucial for determining eligibility for exemption.

Which sections of the Income-tax Act were involved?

Section 12A,Section 12AA,Section 271(1)(c),Section 143(3),Section 144B,Section 250(6),Section 251(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH, JAIPUR

Before: Shri T.R. Senthil Kumar & Shri Prakash

IN THE INCOME TAX APPELLATE TRIBUNAL ‘SMC’ BENCH, JAIPUR (PHYSICAL HEARING) Before: Shri T.R. Senthil Kumar, Judicial Member And Shri Prakash, Accountant Member ITA No: 691/JPR/2025 Assessment Year: 2021-22

Jesus Charitable Trust, Income Tax Officer, 1337, IBMRB School, Exemption Ward-01, Near DPS School, V Jaipur Sector-45, Gurgaon s (Respondent) PAN: AAATJ7714Q (Appellant)

Assessee Represented: Sh. Prateek Kedawat, Adv. & Ms. Neekita Kalakar, Adv. Revenue Represented: Mrs. Arti Rawat, JCIT Date of hearing : 25-08-2026 Date of pronouncement : 25-08-2026 आदेश/ORDER PER : PRAKASH, ACCOUNTANT MEMBER:-

1.

This appeal by the assessee is directed against the order of the learned Commissioner of Income Tax (Appeals) [hereinafter referred to as “the CIT(A)”] dated 06.03.2025 arising out of the assessment order dated 18.12.2022 passed by the Assessing Officer (hereinafter referred to as “the AO”) under section 143(3) r.w.s 144B of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for the assessment year 2021-22.

2.

The grounds of appeal raised by the assessee before us in the memorandum of appeal in Form No. 36 read as under:

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“1. That on the facts and in the circumstances of the case and in law, the action of the Ld. Lower Authority in interpretation of the section 10(23C)(iiiad) the of the Act read with Rule 2BC(1) of the Income Tax Rules, 1962, is arbitrary, whimsical & not in good faith that the gross receipts of assessee should not exceed Rs.1 Cr instead of the wordings "institution" which makes the entire proceedings vitiated. 2. That on the facts and in the circumstances of the case and in law, the Ld. Lower Authority has grossly erred in misstating in assessment order that the assessee appellant is not registered u/s 12A/12AA of the Act, while the copy of the same was provided to him on 15.12.2022, which makes the entire proceedings vitiated. 3. That on the facts and in the circumstances of the case, the Ld. Lower Authority issued a Show Cause notice on 09.12.2022 intending to make addition of Rs.3,30,38,925/- while in the impugned Assessment Order u/s 143(3) of the Act dated 19.12.2022 the addition was made for Rs.23,20,057/-/- and on variation from Show Cause Notice, a fresh Show Cause Notice ought to have been issued but the Ld. Lower Authority erred on facts and circumstances of the case and no fresh Show Cause Notice issued, which makes the entire proceedings vitiated. 4. That on the facts and in the circumstances of the case, the addition made by Ld. Lower Authority for Rs.17,39,066/- is arbitrary, whimsical & not in good faith, while the appellant assessee is eligible for exemption either u/s 10(23C) (iiiad) for gross receipts of all institutions or u/s 12A for net surplus up to 15% of gross receipts, added this sum of Rs.17,39,066/- which was below to 15% of gross receipts, which makes the entire proceedings vitiated. 5. That on the facts and in the circumstances of the case, the addition made by Ld. Lower Authority for Rs.5,80,991/- being the amount of net surplus of the Income & Expenditure Account is arbitrary, whimsical & not in good faith, while the appellant assessee is eligible for exemption either u/s 10(23C)(iiiad) for gross receipts of all institutions or u/s 12A for net surplus up to 15% of gross receipts, added this sum of Rs.5,80,991/- which was double addition as he has already proposed addition of 17,39,066/- which is also on account of 15% of gross receipts, while net surplus of the Income & Expenditure Account is already added in such sum of Rs. 17,39,066/-, which makes the entire proceedings vitiated. 6. That the Ld. Lower Authority has erred in initiation the penalty proceedings under section 271(1)(c)of the Act. 7. The appellant craves leave to add, alter, modify or amend any ground on or before the date of hearing.”

3.

Briefly stated, the facts of the case are that the assessee is a trust registered under the Indian Trusts Act, 1882 and it runs four educational institutions. For the year under consideration, the assessee filed its return of income on 07.03.2022 declaring total income at Nil after claiming exemption under

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section 10(23C)(iiiad) of the Act. The gross receipts of the said four institutions aggregated to Rs 3,30,38,925. The case was selected for scrutiny and a show cause notice was issued on 09.12.2022 proposing to bring the entire gross receipts of Rs 3,30,38,925 to tax. The assessee filed its reply on 15.12.2022.The AO held that the aggregate receipts of Rs 3,30,38,925 shown under a single PAN exceeded the limit of Rs One Crore prescribed under Rule 2BC(1) of the Income Tax Rules, 1962, and further that the assessee’s application for registration under section 12AA/AB of the Act stood rejected by the order of the CIT(E) dated 31.03.2021. On this basis, the AO added Rs 17,39,066 being the amount accumulated or set apart as reported in Form No. 10B, and Rs 5,80,991 being the surplus for the year, and assessed the total income at Rs 23,20,057. The reason assigned in both the paragraphs was that the assessee “is not eligible to 10(23C)(iiiad) and 12AA rejection”.

4.

Before the CIT(A), the assessee raised eight grounds, which have been extracted in paras 4.1 to 4.8 of the impugned order. By Ground No. 2, extracted in para 4.2, it pleaded as under:

“That on the facts and in the circumstances of the case and in law, the Ld. AO has grossly erred in misstating in assessment order that the assessee appellant is not registered u/s 12A/12AA of the Act, while the copy of the same was provided to him on 15.12.2022, which makes the entire proceedings vitiated.” In its written submission, reproduced in para 5 of the impugned order (in page no. 16 of the impugned order), the assessee stated that Form No. 10AC granting registration under section 12AA of the Act for the assessment years 2021-22 to 2023-24 was issued on 21.05.2021 and was furnished to the AO on 15.12.2022 along with the reply to the show cause notice.The operative part of the impugned order, contained in paras 6.1.1, 6.3 and 7, reads as under: “6.1.1 Now before me in the appellate proceedings, the appellant has filed written submission. The appellant has contended that the calculation of Rs. 1,00,00,000 crore made by the AO is not correct. The AO has wrongly taken the amounts of all the four educational institutions. I don’t agree with the submission of the appellant as the appellant trust is not registered u/s 12A/ 12AA of the Income Tax Act. The registration u/s was cancelled by CIT exemption as emanating from the assessment order. In the assessment order, The AO has made detailed analysis how the total receipts amount to Rs.

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33038925. I agree with the contention of the AO that on single PAN the receipts is over Rs. 1,00,00,000 and hence the appellant is not eligible for exemption u/s 10(23C)(iiiad) of the Income Tax Act. Hence the addition of the AO is confirmed and appeal of the appellant is dismissed. 6.3 Ground No.4 & 5: These grounds are consequential and general in nature and do not require to be adjudicated. 7. The appeal of the appellant is Dismissed.” 5. We have heard the rival contentions and perused the material available on record. Section 250(6) of the Act provides as under:

“(6) The order of the Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision.” 6. The CIT(A) has decided only Ground No. 1. He has held Grounds No. 4 and 5 to be consequential and general in nature, and has dismissed the appeal. Ground No. 2, which corresponds to Ground No. 2 raised before us, has not been adjudicated and does not even find a mention in the decision. Grounds No. 3, 6, 7 and 8 raised before him have likewise gone undecided.

7.

The omission to decide Ground No. 2 is material. While rejecting Ground No. 1, the CIT(A) has himself relied upon the assessee’s non-registration under section 12A/12AA of the Act. That is the very fact which Ground No. 2 had put in issue and which the assessee sought to displace by producing Form No. 10AC.

8.

The Explanation to section 251(2) of the Act permits him to consider and decide any matter arising out of the proceedings in which the order appealed against was passed, even if such matter was not raised before him by the appellant. An authority who may decide a matter never raised has no discretion to leave undecided a matter expressly raised.

9.

The CIT(A) has recorded no finding on the assessee’s registration under section 12AA of the Act, and the claim under section 10(23C)(iiiad) of the Act has been rejected without that question being examined. We

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accordingly set aside the impugned order and restore the appeal to the file of the CIT(A) with a direction to decide all the grounds raised before him afresh, by a speaking order, in accordance with section 250(6) of the Act, after affording the assessee a reasonable opportunity of being heard. The assessee shall cooperate in the proceedings. We express no opinion on the merits of any issue and all the contentions of both the parties are left open. The grounds of appeal are allowed for statistical purposes. 10. In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open court on 25-08-2026

Sd/- Sd/- (T.R. SENTHIL KUMAR) (PRAKASH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated 25/08/2026 *Ganesh Kr., Sr. PS आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT 6. Guard file. By order/आदेश से, सहायक पंजीकार आयकर अपील�य अ�धकरण, t;iqj

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