KADIWALA WELFARE TRUST,KADI vs. THE ITO (EXEMPTION), PALANPUR

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ITA 40/AHD/2026Status: DisposedITAT Ahmedabad29 April 2026AY 2014-154 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the rectification application, stating that the assessee was unaware of the Section 143(1) order. The matter was restored to the AO to examine the claim for deduction under Section 11 on merits.

What were the facts?

The assessee trust, registered under Section 12A, inadvertently failed to mention its 12AA registration details in the ITR-7 form, leading to the denial of exemption under Section 11. Upon receiving a demand recovery notice, the trust filed a rectification application, which was dismissed by the AO as time-barred.

What were the issues?

Whether the delay in filing a rectification application under Section 154 should be condoned when the assessee was unaware of the order passed under Section 143(1) and whether the claim for exemption under Section 11 should be examined on merits.

Which sections of the Income-tax Act were involved?

Section 11,Section 12A,Section 12AA,Section 143(1),Section 154,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

Before: SHRI SANJAY GARG & SHRI NARENDRA PRASAD SINHA

For Appellant: Ms. Nupur Shah, A.R, Smt. Ananya Kulshresth, Sr. DR
For Respondent: Smt. Ananya Kulshresth, Sr. DR
Hearing: 07/04/2026Pronounced: 29/04/2026

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. Nos. 40 & 41/Ahd/2026 (िनधा�रण वष� / Assessment Years : 2014-15 & 2015-16) Kadiwala Welfare Trust बनाम/ ITO(Exemptions) Near Sakkarpura Water Palanpur Vs. Tank, Kadi Kalol Darwaja, Kadi, Gujarat - 382715 �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AABTK1630P (Appellant) .. (Respondent) अपीलाथ� ओर से /Appellant by : Ms. Nupur Shah, A.R. ��यथ� क� ओर से/Respondent by : Smt. Ananya Kulshresth, Sr. DR Date of Hearing 07/04/2026 Date of Pronouncement 29/04/2026 (आदेश)/ORDER Per Sanjay Garg, Judicial Member: The captioned both the appeals relate to the same assessee and are against the separate orders passed by the Ld. Commissioner of Income Tax, Appeal, Thane (in short “Ld. CIT(A)”), dated 18.11.2025 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and relates to Assessment Year (A.Y.) 2014-15 & 2015-16. 2. The assessee trust in these appeals is aggrieved by the action of the Ld. CIT(A) in dismissing the appeals of the assessee holding that the AO has rightly dismissed the applications of the assessee filed u/s.154 of the Act being barred by limitation.

ITA Nos. 40 & 41/Ahd/2026 [Kadiwala Welfare Trust vs. ITO(Exemption)] - 2 – 3. The brief facts of the case are that the assessee trust is charitable trust registered u/s.12A of the Act. The assessee trust in the return of income had claimed exemption u/s.11 of the Act as it was registered u/s. 12AA of the Act, however, while filing return of income in ITR 7, the Accountant of assessee trust, by bonafide mistake forgot to enter the 12AA registration details in Column “Other details” of ITR 7. Thus, while processing return of income u/s. 143(1) of the Act by CPC, no exemption u/s.11 of the Act was granted and Income was determined at Rs. 5,43,226/- and demand was raised by CPC of Rs. 2,24,410/-. That the assessee trust on receipt of demand recovery notice from the Ld. AO vide notice dated 10.09.2022 only, came to know about the outstanding demand raised by CPC. After receipt of the above notice, assessee trust immediately filed rectification application before the Ld.AO on 07.11.2022. The AO, however, dismissed the application of the assessee holding the same as barred by limitation.

4.

In appeal, it was submitted before the Ld. CIT(A) that as the assessee trust was unaware of the Intimation order passed u/s. 143(1) of the Act, no rectification application could be filed with in the limitation period of 4 years, as the assessee trust came into knowledge about this after the said time limit had lapsed. It was, therefore, submitted that there was no delay in filing the rectification application before the AO as the assessee was not aware of the processing of the return by the CPC u/s.143(1) of the Act. That the assessee for the first time came to know about such disallowance made by the CPC, only when, the assessee trust

ITA Nos. 40 & 41/Ahd/2026 [Kadiwala Welfare Trust vs. ITO(Exemption)] - 3 – received the notice of recovery and immediately the rectification application was filed before the AO. Ld. CIT(A), however, dismissed the appeal of the assessee upholding the order of the AO dismissing the applications of the assessee filed u/s.154 of the Act.

5.

We have heard the rival contentions and gone through the records. Admittedly, the assessee trust is a registered charitable trust u/s.12A of the Act and, therefore, is entitled to claim deduction u/s.11 of the Act. However, due to inadvertent mistake on the part of the person/Accountant entrusted with online filing of the return of income of the assessee, the requisite registration details u/s.12A of the Act could not be filed, resulting into disallowance of the claim of the assessee u/s.11 of the Act as a Charitable Institution. Ld. Counsel has submitted that requisite form 10B was already submitted. That there is no dispute that the assessee trust is a registered charitable trust, therefore, the claim of the assessee is required to be examined at the end of the AO.

6.

The assessee had duly explained that the assessee was not aware about the passing of the order u/s.143(1) of the Act by the CPC. When the assessee trust was not aware of the passing of such order by the CPC, there was no question of filing any rectification application by the assessee. The assessee would file the rectification application only on becoming aware of passing such order. Therefore, rectification application of the assessee which is a registered Charitable Institution should not have been

ITA Nos. 40 & 41/Ahd/2026 [Kadiwala Welfare Trust vs. ITO(Exemption)] - 4 – rejected by the lower authorities on this technical ground when the assessee has duly explained the reasons for the delay. In view of this, the delay in filing the rectification application u/s.154 of the Act in both the appeals is hereby condoned. The matter in both the appeals is restored to the file of the AO with a direction to examine the claim of the assessee for deduction u/s.11 of the Act, irrespective of the fact, whether such details were mentioned in the return or not. The assessee will furnish the requisite details before the AO and, thereafter, the AO will examine the claim on merits and allow the deduction if the assessee is otherwise found eligible for the same. With the above observations, both the appeals of the assessee trust are treated as allowed for statistical purposes.

7.

In the result, both appeals filed by the assessee trust are treated as allowed for statistical purposes.

This Order pronounced on 29/04/2026 Sd/- Sd/- (NARENDRA PRASAD SINHA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 29/04/2026 S. K. SINHA True Copy आदेश क� �ितिल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��यथ� / The Respondent. 2. संबंिधत आयकर आयु� / Concerned CIT 3. आयकर आयु�(अपील) / The CIT(A)- 4. 5. �वभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad गाड� फाईल / Guard file. 6. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad

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