SHREE SAGAR SANT SHREE DASARAM CHARITABLE TRUST- SAVARKUNDLA,SAVARKUNDLA vs. CIT(EXEMPTION)AHMEDABAD, AHMEDABAD

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ITA 432/AHD/2026Status: DisposedITAT Ahmedabad23 April 20264 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the rejection was unjustified as the notices and order were not effectively communicated to the trustees, violating principles of natural justice. The matter was restored to the CIT(E) for fresh adjudication on merits.

What were the facts?

The assessee trust applied for registration under Section 12A(1)(ac)(iii) read with Section 12AB. The CIT(E) rejected the application for non-compliance with show cause notices, stating that necessary details were not furnished.

What were the issues?

Whether the rejection of the application for registration due to non-compliance with notices, without effective service and adjudication on merits, is valid. Whether principles of natural justice were violated.

Which sections of the Income-tax Act were involved?

Section 12A(1)(ac),Section 12AB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD

Before: SMT. ANNAPURNA GUPTA & SHRI SIDDHARTHA NAUTIYAL

For Appellant: Shri Hatim Bharmar, AR
For Respondent: Shri Sher Singh, CIT-DR
Pronounced: 23.04.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I.T.A. No.432/Ahd/2026 (Assessment Year: N.A.) Shree Sagar Sant Shree Dasaram Vs. Commissioner of Charitable Trust-Savarkundla, Income Tax (Exemption), Zinzuda Gait, Sagar Valu Naku, Ahmedabad Chapraj Bapu Ni Jagya, Savarkundla, Gujarat-364515 [PAN No.ABBTS5817R] (Appellant) .. (Respondent) Appellant by : Shri Hatim Bharmar, AR Respondent by: Shri Sher Singh, CIT-DR 02.04.2026 Date of Hearing Date of Pronouncement 23.04.2026 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Exemption), (in short “Ld. CIT(E)”), Ahmedabad vide order dated 30.10.2025.

2.

The assessee has raised the following grounds of appeal:

“1. That the Learned Commissioner of Income-tax (Exemptions), Ahmedabad has erred in law and on facts in rejecting the Appellant Trust's application for registration under Section 12A(1)(ac)(iii) read with Section 12AB of the Income-tax Act, 1961, solely on the ground of alleged non-compliance with show cause notices, without adjudicating the application on merits. 2. That the impugned order is bad in law, arbitrary and unsustainable, inasmuch as all basic and mandatory documents required for verification under Section 12AB and Rule 17A, including the 3, 3, 3, 3, and 3, were already submitted along with Form No. 10AB at the time of filing of the application. 3. That the Learned CIT(E) failed to appreciate that only replies to the show cause notices were not submitted, whereas the foundational documentary evidence necessary to verify the objects, genuineness of activities and statutory compliance of the Trust was already available on record, and therefore the application could and ought to have been decided on the basis of the material already furnished. 4. That rejection of the application merely on account of non-reply to show cause notices, without examination of the documents already submitted, amounts to elevating

ITA No. 432/Ahd/2026 Shree Sagar Sant Shree Dasaram Charitable Trust-Savarkundla vs. CIT(E) Asst.Year –N.A. - 2–

procedural non-compliance over substantive justice, which is impermissible in proceedings relating to grant of registration to charitable or religious trusts. 5. That the Learned CIT(E) was fully empowered to examine and verify the documents already uploaded along with the application under Form No. 10AB and to record satisfaction or otherwise regarding the genuineness of activities and objects of the Trust, and mere non-response to portal-based notices could not have been treated as conclusive ground for rejection without such verification. 6. That in the absence of actual knowledge of issuance of show cause notices, no adverse inference ought to have been drawn against the Appellant Trust and passing of the impugned order without ensuring effective service amounts to violation of principles of natural justice. 7. That the non-submission of replies was neither deliberate nor with any intention to suppress facts or withhold information, and there is no finding in the impugned order disputing the charitable or religious nature of the objects or the genuineness of activities of the Trust. 8. That the impugned rejection has caused grave prejudice to the Appellant Trust and the same deserves to be set aside, and the matter be restored to the file of the Learned CIT(E) for fresh adjudication on merits after granting a reasonable and effective opportunity of being heard and permitting submission of replies and explanations, if required. 9. That the Appellant craves leave to add to, alter, amend or withdraw any of the above grounds at or before the time of hearing.”

3.

The brief facts of the case are that the assessee trust filed an application for registration/renewal in Form No. 10AB under section 12A(1)(ac) of the Income-tax Act, 1961 ("the Act") before the learned Commissioner of Income-tax (Exemptions). The CIT (Exemptions) initiated proceedings in accordance with section 12AB(1)(b) of the Act and Rule 17A of the Income-tax Rules, 1962 and issued notices from time to time calling for necessary details and documents in order to examine the genuineness of activities of the trust and its compliance with the stated objects. However, CIT (Exemptions) observed that the assessee did not furnish any submissions or supporting documents in response to the notices issued and did not seek any adjournment. In absence of requisite details as prescribed under Rule 17A(2), the CIT (Exemptions) held that he was unable to satisfy himself regarding the genuineness of activities of the trust, the alignment of activities with its objects and compliance with other applicable laws. Accordingly, the

ITA No. 432/Ahd/2026 Shree Sagar Sant Shree Dasaram Charitable Trust-Savarkundla vs. CIT(E) Asst.Year –N.A. - 3– application filed by the assessee in Form No. 10AB for renewal of registration was rejected.

4.

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

5.

At the outset, it is observed that the assessee has filed application for condonation of delay along-with an Affidavit for delay of 47 days in filing of the present appeal. Considering the contents of the affidavit and the reasons explained therein that the notices and the impugned order were communicated only on the registered e-mail id of the Chartered Accountant and were not within the actual knowledge of the trustees, we find that the delay has occurred due to bona fide and reasonable cause. The Hon’ble Supreme Court in the case of Collector, Land Acquisition v. Mst. Katiji (1987) 167 ITR 471 (SC) and N. Balakrishnan v. M. Krishnamurthy (1998) 7 SCC 123 has held that a liberal approach should be adopted in condoning delay so as to advance substantial justice. Respectfully following the same, the delay of 47 days is condoned and the application for condonation of delay is allowed.

6.

On merits, we observe that the application of the assessee trust has been rejected for non-compliance of notices issued by the CIT (Exemptions). However, from the material placed on record and the affidavit filed by the assessee, it is evident that the notices as well as the rejection order were communicated only on the e-mail id of the Chartered Accountant of the assessee and were not brought to the knowledge of the trustees in time, resulting in non-compliance. It is further noted that the assessee trust had already been granted provisional registration earlier and the present application was for renewal of such registration. In such circumstances,

ITA No. 432/Ahd/2026 Shree Sagar Sant Shree Dasaram Charitable Trust-Savarkundla vs. CIT(E) Asst.Year –N.A. - 4– denial of registration without providing an effective opportunity of being heard is not justified.

7.

The Hon’ble Supreme Court in the case of Tin Box Company v. CIT (2001) 249 ITR 216 (SC) has held that where an assessee has not been given proper opportunity, the matter should be restored for fresh adjudication. Similarly, in Andaman Timber Industries v. CCE (2015) 62 taxmann.com 3 (SC), it has been held that denial of reasonable opportunity amounts to violation of principles of natural justice.

8.

In view of the above facts and respectfully following the aforesaid judicial precedents, we hereby restore the matter to the file of CIT (Exemptions) with a direction to adjudicate the application of the assessee afresh on merits after providing adequate opportunity of being heard to the assessee and after considering all relevant documents. The CIT (Exemptions) shall also take into consideration the fact that the assessee had earlier been granted provisional registration while deciding the issue.

9.

In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 23/04/2026

Sd/- Sd/- (ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 23/04/2026 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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