SOCIETY FOR VILLAGE DEVELOPMENT IN PETROCHEMICALS AREA,VADODARA vs. THE DY.CIT,CIRCLE-2- EXEMP, AHMEDABAD

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ITA 881/AHD/2026Status: DisposedITAT Ahmedabad22 June 2026AY 2023-244 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the assessee was granted registration retrospectively after the assessment order was passed. Therefore, the assessment order was set aside, and the matter was remanded for fresh assessment considering the valid registration.

What were the facts?

The assessee, a trust, claimed exemption under Section 11 of the Income Tax Act for AY 2023-2024. The Assessing Officer rejected the claim due to lack of valid registration and made an addition. The CIT(A) dismissed the assessee's appeal.

What were the issues?

Whether the denial of exemption under Section 11 was justified when registration was granted retrospectively. The validity of the assessment order in light of the subsequent registration.

Which sections of the Income-tax Act were involved?

Section 11,Section 143(3),Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, C” BENCH, AHMEDABAD

IN THE INCOME TAX APPELLATE TRIBUNAL "C” BENCH, AHMEDABAD DR. B.R.R. KUMAR VICE PRESIDENT SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER ITA No. 881/AHD/2026 Assessment Year:2023-2024 Society for Village Development In Petrochemicals Area C/882, Petrochemicals Township, Sector-1, Vadodara-391346, Gujarat [PAN:AABTS2198E] …………. Appellant Deputy Commissioner of Income Tax, Vs Central Circle-2 , Ahmedabad Sachin Tower, 100 Feet Road AaykarBhawan, Ashram Road, Ahmedabad-380015, Gujarat …………. Respondent Appearance For the Appellant/Assessee : Shri Samir Parikh For the Respondent/Department : Shri Ravindra Date Conclusion of hearing : 09.06.2026 Pronouncement of order : 22.06.2026

O R D E R Per Rahul Chaudhary, Judicial Member: 1. The appeal has been preferred by the Assessee against the Order, dated 22/01/2026, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘CIT(A)’] whereby the Learned CIT(A) had dismissed the appeal against the Assessment Order, dated 13/02/2025 passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] for the Assessment year 2023-2024.

2.

The Assessee has raised the following grounds: “1. The Id. CIT (Appeals) has erred both in law and on facts in not granting benefits of exemption under section 12A of the Income tax Act, 1961 even though the appellant is having Registration Certificate granted vide order dated 11.07.2025 from A.Y. 2023-24 to 2025-26. He wrongly

ITA No.881/AHD/2026 Assessment Year: 2023-2024 considers that trust is not registered and not given benefit of section 11 && 12 of the Act. 2. Without prejudice to the above, The Id. CIT (Appeals) further erred both in law and on facts in confirming an addition Rs. 1,93,68,720/- towards 30% of Total Receipts of Rs. 6,45,62,400/- on adhoc basis as Income from other sources. The addition made without verifying factual position in the accounts submitted at the time of assessment and not understood accounting effect given in the accounts by ignoring the submissions made. 3. Without prejudice to the above, the Appellant prays that if status of the appellant is consider as AOP than total expenditure of Rs. 6,38,08,603/- and Depreciation on fixed assets of Rs. 39,040/- which are otherwise allowable from income and having been incurred for earning income considering the provisions of Income Tax Act, 1961 including 57 or 37 of the Income Tax Act, 1961 and not allowed by the Assessing Officer, be allowed while computing the income of the trust even though exemption u/s 11 of the Act is denied by the Officer. 4. The Id AO failed to consider properly the explanations and submissions made before the authorities below which ought to be considered while passing high pitched assessment order. 5. The order passed by ld. AO by not affording adequate opportunity of being heard and without adhering to principles of natural justice be quashed. 6. There being no inaccurate particulars or concealment of particulars, the proceedings initiated is unjustified.” 3. The relevant facts in brief are that the Assessee is a trust registered under the Bombay Public Trust Act, 1950. For the Assessment Year 2023-2024, the Assessee filed return of income declaring ‘Nil’ income. The aforesaid return was selected for regular scrutiny, and Assessing Officer completed the assessment vide Assessment Order, dated 13/02/2025 at assessed income of INR.1,93,68,720/-. The Assessing Officer rejected the exemption claimed by the Assessee under Section 11 of the Act on the ground that the Assessee did not hold valid registration, and proceeded to computed taxable income by disallowing 30% of expenses (computed at INR.1,93,68,720/-) on the ground that the Assessee had failed to furnish any supporting documents. The appeal preferred by the Assessee before the Learned CIT(A) was dismissed by vide Order, dated 22/01/2026, which has been impugned by the Assessee by way of the present appeal on the grounds reproduced in

ITA No.881/AHD/2026 Assessment Year: 2023-2024 Paragraph 2 above.

4.

Having heard both the sides and on perusal of record it becomes clear that subsequent to passing of the Assessment Order, dated 13/02/2025, the Assessee was granted registration by the Learned Commission of Income Tax (Exemptions) vide Order, dated 11/07/2025, for five Assessment Years 2023-2024 to 2027-2028. The aforesaid approval was not considered by the Learned CIT(A) while dismissing the appeal preferred by the Assessee and therefore, the same cannot be sustained. Since it is admitted position that now in terms of the aforesaid approval the Assessee is eligible to claim exemption under Section 11 of the Act for the Assessment Year 2023-2024, the Assessment Order, dated 13/02/2025, passed by the Assessing Officer is set-aside, with the directions to the Assessing Officer to frame assessment after taking into consideration the aforesaid approval. The Assessee would be at liberty to place before the Assessing Officer such submission/documents as the Assessee may deem appropriate in response to inquiry/requisition, in any, made by the Assessing Officer. In terms of the aforesaid, Ground No.1 raised by the Assessee is allowed, while all the others grounds raised are dismissed as having been rendered infructuous granting leaving open all the rights and contentions of the Assessee. The Assessee would be granted a reasonable opportunity of being heard.

5.

In result, in terms of paragraph 4 above, the present appeal preferred by the Assessee is partly allowed.

Order pronounced on 22.06.2026,

Sd/- Sd/- (Dr. B.R.R. Kumar) (Rahul Chaudhary) Vice President Judicial Member िदनांक Dated :22.06.2026 अहमदाबाद Ahmedabad; True Copy H.C. PS

ITA No.881/AHD/2026 Assessment Year: 2023-2024 आदेशक��ितिलिपअ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent. 3. संबंिधतआयकरआयु�/ Concerned CIT 4. आयकरआयु�(अपील) / The CIT(A) 5. िवभागीय�ितिनिध, आयकरअपीलीयअिधकरण/ DR, ITAT, 6. गाड�फाईल /Guard file. आदेशानुसार/BY ORDER, उप/सहायकपंजीकार (Dy./Asstt.Registrar) आयकरअपीलीयअिधकरण, अहमदाबाद / ITAT, Ahmedabad

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