SHRI DWARKANATH TRUST,PILVAI vs. CIT (EXEMPTION), AHMEDABAD, AHMEDABAD

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ITA 1067/AHD/2026Status: DisposedITAT Ahmedabad19 May 20263 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The tribunal held that rejecting an application after only one opportunity violates principles of natural justice. Therefore, the matter was set aside to allow the assessee another opportunity to be heard and make necessary compliances.

What were the facts?

The assessee trust applied for registration under Section 12A(1)(ac)(ii) of the Income Tax Act. The CIT(E) rejected the application after providing only one opportunity for compliance, which the assessee failed to meet due to unfamiliarity with online proceedings.

What were the issues?

Whether the CIT(E) provided a reasonable opportunity of being heard to the assessee before rejecting the application for registration. Whether the rejection was hasty due to insufficient opportunities for compliance.

Which sections of the Income-tax Act were involved?

Section 12A,Section 12AB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD

Before: SIDDHARTHA NAUTIYAL & SHRI NARENDRA PRASAD SINHA

For Appellant: Shri Hasmukh V Doshi, CA
For Respondent: Shri Ajay Pratap Singh, CIT-DR
Hearing: 11.05.2026Pronounced: 19.05.2026

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 07.03.2026 in the proceeding u/s 12A of the Income Tax Act.

2.

The brief facts of the case are that the assessee had filed an application for registration of the Trust u/s. 12A(1)(ac)(ii) of the Act. The Ld. CIT(E) had called for certain details 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

ITA No. 1067/Ahd/2026 Shri Dwarkanath Trust Vs. CIT(E) 2 vide the impugned order and the provisional registration granted earlier was also cancelled.

3.

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 On the facts and in circumstances of the case as well as law on the subject, the learned CIT(E) has not provided reasonable opportunity of being heard as provided under Second Proviso to Section 12AB(1)(b)(ii)(B) of the Act. 2. On the facts and in circumstances of the case as well as law on the subject, the Ld. CIT(E) has hurriedly rejected the application in Form 10AB made by assessee by giving only one notice and not given further opportunity. 3. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.

4.

Shri Hasmukh V Doshi, the Ld. AR of the assessee submitted the Ld. CIT(E) had allowed only one opportunity on 20.02.2026. The notice was sent on the email but the trustees of the assessee trust were not conversant with the online proceedings and as a result no compliance could be made before the Ld. CIT(E). The Ld. AR requested that the assessee may be allowed another opportunity of being heard by setting aside the matter to the file of the Ld. CIT(E).

5.

Per contra, Shri Ajay Pratap Singh, 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.

6.

We have considered the request of the assessee. It is found that the assessee was allowed registration u/s. 12A(1)(ac)(i) of the Act on 24.09.2021 for the A.Ys. 2022-23 to 2026-27. The present application was filed for registration of the trust u/s 12A(1)(ac)(ii) of the Act. In the present

ITA No. 1067/Ahd/2026 Shri Dwarkanath Trust Vs. CIT(E)

proceeding the Ld. CIT(E) had allowed only one opportunity to the assessee for furnishing certain details and thereafter the application of the assessee was rejected. The interest of natural justice cannot be served by rejecting the application by allowing only one opportunity. In the interest of justice, we, therefore, deem it proper to set aside the matter to the file of Ld. CIT(E) with a direction to allow another opportunity of being heard to the assessee. The assessee is also directed to make compliance before the Ld. CIT(E) and produce the documents and evidences as required by him.

7.

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

Order pronounced in the Court on 19/05/2026 at Ahmedabad.

Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Dated – 19th May, 2026 (True Copy) Neelesh, Sr. P.S 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 अपीलीय आयकर अपीलीय अिधकरण अिधकरण, अहमदाबाद अहमदाबाद / ITAT, Ahmedabad आयकर आयकर अपीलीय अपीलीय अिधकरण अिधकरण अहमदाबाद अहमदाबाद

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