THE KILKARI EDUCATIONAL TRUST,GORAKHPUR vs. COMMISSIONER OF INCOME TAX (EXEMPTION), LUCKNOW

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ITA 205/VNS/2024Status: DisposedITAT Varanasi30 June 20263 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that non-commencement of activities due to unavailability of funds does not necessarily cast doubt on the genuineness of the trust. The assessee should be given an opportunity to explain its case.

What were the facts?

The assessee, Kilkari Education Trust, applied for registration under Section 12AB of the Income Tax Act. The CIT(Exemption) rejected the application stating that the trust had not commenced its charitable activities.

What were the issues?

Whether the rejection of registration under Section 12AB is justified solely on the ground that charitable activities have not yet commenced, and whether adequate opportunity of being heard was provided.

Which sections of the Income-tax Act were involved?

Section 12AB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VARANASI CIRCUIT BENCH, VARANASI

Before: SHRI KUL BHARAT & SHRI ANADEE NATH MISSHRA

For Appellant: Shri Arvind Shukla, Advocate
For Respondent: Shri Sanjay Kumar, CIT- DR

PER KUL BHARAT, VICE PRESIDENT.:

This appeal, by the assessee is directed against the order of the Learned Commissioner of Income-tax (Exemptions), Lucknow dated 24.10.2024 rejecting the assessee’s application for registration u/s 12AB of the Income Tax Act, 1961 (“Act”, for short) The assessee has raised the following grounds of appeal:-

“1. Because the learned CIT(E) has erred in law as well as on facts in not allowing registration to a genuine institution u/s 12AB with vague, irrelevant and flimsy grounds. 2. Because the learned CIT(E) has erred in rejecting the petition for registration u/s 12AB without giving proper opportunity of being heard. 3. Because the learned CIT(E) has erred in rejecting the registration simply on the grounds that the charitable activities of the institution had not commenced whereas it is not necessary that such activities must have commenced as a precondition to registration.”

ITA No. 205/VNS/2024 Page 2 of 3 2. Briefly stated the facts are that the assessee filed an application seeking for registration u/s 12AB of the Act on 22.04.2024 along with Form No. 10AB under Rule 17A of the Income Tax Rules, 1962 (“Rules”, for short). The said application came to be rejected by the Ld. CIT(E) on the basis that the assesse has not carried out any activities as per the objects of the assessee trust. Therefore, the application of the assessee was rejected. Aggrieved against this, the assessee is in appeal before this Tribunal.

3.

Apropos to the grounds of appeal, the Ld. Counsel for the assessee contended that the authorities below failed to appreciate the fact that at the time of registration the concerned authority has to satisfy itself about the nature of the objects of the assessee whether the objects are charitable or not. Therefore, he prayed that the order of the Ld. CIT(E) may be set aside and the Ld. CIT(E) be directed to grant registration u/s 12AB of the Act.

4.

On the other hand, the Ld. CIT-DR opposed the submissions and supported the order of lower authorities and submitted that there is no infirmity in the order of the Ld. CIT(E).

5.

We have heard rival submissions and perused the material available on records. It is submitted on behalf of the assesseee that the adequate opportunity was not granted to the assessee for representing his case effectively. We find merit into the contention of the assessee that non carrying out of the activity due to unavailability of fund does not give reason for suspecting the genuineness of activity. We are of the considered view that the assessee should be given an opportunity to explain its case before the Ld. CIT(E) to sub-serve the principles of natural justice. Therefore, the impugned order is hereby set aside the

ITA No. 205/VNS/2024 Page 3 of 3 order of the Ld. CIT(E) and restore the application filed by the assessee to the Ld. CIT(E) for considering the same afresh. Needless to say that the Ld. CIT(E) would provide reasonable opportunity of being heard to the assessee to explain its case. Grounds of appeal of the assessee are allowed for statistical purposes.

6.

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

Order pronounced in the open Court on 30/06/2026.

Sd/- Sd/- [ANADEE NATH MISSHRA] [KUL BHARAT] ACCOUNTANT MEMBER VICE PRESIDENT DATED: 30/06/2026 Vijay Pal Singh, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. DR By order Sr. Private Secretary

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