UDHNA ACADEMY EDUCATION TRUST,SURAT vs. THE CIT(EXEMPTION), AHMEDABAD

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ITA 970/AHD/2026Status: DisposedITAT Ahmedabad07 May 20266 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the CIT(E)'s orders and restored the matters for de novo consideration. The CIT(E) was directed to provide adequate opportunity to the assessee to furnish documents and reconsider both applications.

What were the facts?

The assessee trust applied for registration under Section 12A(1)(ac)(ii) and approval under Section 80G(5)(ii). The CIT(Exemption) rejected the 12A application for non-furnishing of documents and the 80G application for not having a valid 12A registration.

What were the issues?

Whether the CIT(E) erred in rejecting the applications for registration and approval without granting adequate opportunity and whether the 80G approval is contingent on 12A registration.

Which sections of the Income-tax Act were involved?

Section 12A(1)(ac)(ii),Section 80G(5)(ii),Section 12AB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD

Before: SHRI SIDDHARTHA NAUTIYAL & SHRI NARENDRA PRASAD SINHA

For Respondent: Shri Rignesh Das, CIT-DR
Hearing: 05.05.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER I.T.A. Nos.970&971/Ahd/2026 (Assessment Year: N.A.) UDHNA Academy Education Trust, Vs. Commissioner of Central Road No.14, Udhyognagar, Income Tax (Exemption), Udhna, Surat-394210 Ahmedabad Jurisdictional AO ACIT/DCIT, Circle-2, Exemption, Ahmedabad [PAN No.AAATU0431F] (Appellant) .. (Respondent) Shri Arnav Jariwala, Adv. on behalf of Shri Appellant by : P.M. Jagasheth, CA Respondent by: Shri Rignesh Das, CIT-DR Date of Hearing 05.05.2026 07.05.2026 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.

ITA No. 970/Ahd/2026

2.

The assessee has taken the following grounds of appeal: “1. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of Income Tax (Exemption), Ahmedabad has erred in rejecting Application for registration U/s. 12A(1)(ac)(ii) of the Income Tax Act,

ITA Nos. 970&971/Ahd/2026 UDHNA Academy Education Trust vs. CIT(E) Asst. Year –NA - 2– 1961 and the provisional approval U/s. 12A(1)(ac)(ii) of the Income Tax Act, 1961 granted earlier has also been cancelled. 2. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of Income tax (Exemption), Ahmedabad has erred in not granting adequate opportunity to hear and passed the order, hence, the principal of natural justice is not abide. 3. On the facts and in the circumstances of the case as well as the law on the subject, the appellant Trust is qualifying for registration U/s.12A(1)(ac)(ii) of the Income Tax Act, 1961. 4. It is therefore prayed that the CIT(Exemption) should be directed passed U/s. 12A(1)(ac)(ii) of the Income Tax Act, 1961 may please be set aside to the file of the CIT (Exemption) with appropriate direction. 5. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of the hearing of the appeal.” 3. The brief facts of the case are that the assessee trust filed an application for registration in Form No. 10AB under section 12A of the Income-tax Act, 1961 (“the Act”). The application 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 prescribes the procedure as well as the documents to be furnished along with such application. During the course of proceedings, CIT(Exemptions) issued notices from time to time calling upon the assessee to furnish necessary details and documents, including those prescribed under Rule 17A(2), so as to enable verification of the genuineness of the activities of the trust and whether such activities were in accordance with its stated objects. However, as CIT(Exemptions) noted that the assessee neither furnished any submissions or documents in response to the notices nor sought any adjournment. In the absence of any supporting material, the CIT(Exemptions) held that he was unable to satisfy himself regarding the genuineness of the activities of the trust and

ITA Nos. 970&971/Ahd/2026 UDHNA Academy Education Trust vs. CIT(E) Asst. Year –NA - 3– the conformity of such activities with its objects. Accordingly, the application filed in Form No. 10AB was rejected and any provisional registration, if granted earlier, was also cancelled. The CIT(Exemptions) further directed the assessee to compute its tax liability under section 115TD of the Act read with Rule 17CB and comply with the provisions relating to payment of such tax within the prescribed time.

4.

The assessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee.

5.

We have considered the facts of the case and the material available on record. It is observed that the rejection of the application by the CIT(Exemptions) is primarily on account of non-compliance by the assessee in furnishing the requisite details and documents. At the same time, it is also evident that only one opportunity of hearing was provided to the assessee and the matter has been decided without examining the relevant documents which the assessee now claims to be in a position to furnish. Considering the nature of proceedings relating to grant of registration under section 12AB, which has significant consequences for the assessee, and in the interest of justice, we are of the view that the assessee should be granted one more effective opportunity to substantiate its claim.

6.

Accordingly, we set aside the impugned order and restore the matter to the file of the CIT(Exemptions) for de novo consideration. The CIT(Exemptions) shall examine the application afresh in accordance with

ITA Nos. 970&971/Ahd/2026 UDHNA Academy Education Trust vs. CIT(E) Asst. Year –NA - 4– law, after providing reasonable and adequate opportunity of being heard to the assessee. The assessee is also directed to appear before the CIT(Exemptions) and furnish all requisite documents and evidences, including those prescribed under Rule 17A(2), to establish the genuineness of its activities and the alignment of such activities with its stated objects. Needless to say, the assessee shall fully cooperate in the proceedings and shall not seek unnecessary adjournments.

7.

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

ITA No. 971/Ahd/2026

8.

The assessee raised the following grounds of appeal:

“1. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Exemption), Ahmedabad has erred in rejecting Application for registration U/s.80G(5)(ii) of the Income Tax Act, 1961. 2. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Exemption), Ahmedabad has erred in not granting adequate opportunity to hear and passed the order, hence, the principal of natural justice is not abide. 3. On the facts and in the circumstances of the case as well as the law on the subject, the appellant Trust is qualifying for registration U/s. 80G(5)(ii) of the Income Tax Act, 1961. 4. It is therefore prayed that the CIT (Exemption) should be directed passed U/s. 80G(5)(ii) of the Income Tax Act, may please be set aside to the file of the CIT (Exemption) with appropriate direction. 5. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of the hearing of the appeal.”

ITA Nos. 970&971/Ahd/2026 UDHNA Academy Education Trust vs. CIT(E) Asst. Year –NA - 5– 9. The brief facts of the case are that the assessee filed an application in Form No. 10AB seeking approval under section 80G(5) of the Income- tax Act, 1961. On examination of the records, the CIT(Exemptions) observed that the assessee did not possess a valid registration under section 12A/12AB of the Act, either in the form of an existing registration order or a valid renewed registration. The CIT(Exemptions) noted that registration under section 12A/12AB is a mandatory pre-condition for grant of approval under section 80G. Reliance was placed on the decision of the Hon’ble Gujarat High Court in the case of CIT (Exemptions) vs. Shree Tapeshwar Hanumanji Bajrang Charity Trust, wherein it was held that in the absence of valid registration under section 12A, approval under section 80G cannot be granted. Accordingly, the CIT(Exemptions) held the application to be non-maintainable and rejected the same.

10.

We have considered the facts and the material available on record. It is observed that the rejection of approval under section 80G has been made solely on the ground that the assessee did not have a valid registration under section 12A/12AB of the Act. At the same time, it is pertinent to note that the issue relating to grant of registration under section 12AA/12AB in the assessee’s own case has already been set aside to the file of the CIT(Exemptions) for de novo consideration. Since the grant of approval under section 80G of the Act is intrinsically linked to and dependent upon the existence of a valid registration under section 12A/12AB, the outcome of the present proceedings is consequential to the decision to be taken in the registration proceedings.

ITA Nos. 970&971/Ahd/2026 UDHNA Academy Education Trust vs. CIT(E) Asst. Year –NA - 6– 11. In these circumstances, we deem it appropriate to set aside the impugned order and restore the matter to the file of the CIT(Exemptions) for fresh adjudication. The CIT(Exemptions) shall reconsider the application for approval under section 80G(5) of the Act afresh, in accordance with law, after deciding the issue of registration under section 12A/12AB and after providing adequate opportunity of being heard to the assessee.

12.

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

13.

In the combined result, both the appeals of the assessee are allowed for statistical purposes. This Order is pronounced in the Open Court on 07/05/2026

Sd/- Sd/- (NARENDRA P. SINHA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 07/05/2026 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)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad

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