GUJARAT VALAND SEVA SANGH,AHMEDABAD vs. COMMISSIONER OF INCOME TAX (EXEMPTIONS), AHMEDABAD

ITA 2538/AHD/2026Status: DisposedITAT Ahmedabad29 September 20266 pages
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What did the Tribunal hold?

The Tribunal held that both the assessee and the CIT(E) failed to discharge their respective responsibilities under Section 12AB of the Income Tax Act, 1961. The assessee's applications were not accompanied by relevant supporting documents, and the CIT(E) rejected the applications without granting a reasonable opportunity of being heard. The Tribunal acknowledged that in some cases, the tax authority did not have sufficient time to await compliance due to the time-bound nature of the disposal of applications. This resulted in unintended consequences for charitable organizations. To serve the interest of justice and protect the rights of both parties, the Tribunal set aside the impugned rejection orders. The appeals were allowed for statistical purposes, with directions for a fresh adjudication. The assessee was directed to provide correct contact details, furnish all supporting documents, and respond to queries without unnecessary adjournments. The CIT(E) was directed to adjudicate the applications afresh after granting a reasonable opportunity of being heard and considering the submitted documents. It was clarified that if the assessee fails to comply, the CIT(E) can adjudicate based on the available material. For Section 80G applications, the assessee must provide the status of Section 12AB registration.

What were the facts?

The assessee, Gujarat Valand Seva Sangh, a charitable trust, filed two appeals (ITA Nos. 2537 & 2538/Ahd/2026) before the Income Tax Appellate Tribunal (ITAT) Ahmedabad 'B' Bench. The appeals challenged the rejection of its applications for registration/renewal under Section 12A/12AB of the Income Tax Act, 1961, and approval under Section 80G(5) of the Act by the Commissioner of Income-Tax (Exemptions) (CIT(E)). The appeals were filed with a delay of 33 days, which was condoned. The ITAT noted that both the assessee and the revenue had failed to discharge their respective responsibilities, leading to the rejection of the applications. The assessee contended that it was not confronted with the defects in its application, while the revenue argued that notices were issued and the assessee failed to respond.

What were the issues?

1. Whether the rejection of the assessee's applications for registration/renewal under Section 12A/12AB and approval under Section 80G(5) by the CIT(E) was justified, considering the alleged failure of both parties to discharge their statutory obligations and the provision for a reasonable opportunity of being heard under Section 12AB of the Income Tax Act, 1961? Assessee's Contentions: - The assessee argued that it was not confronted with the defects or deficiencies in its applications and was denied an effective opportunity of being heard. Reasons cited included non-service of notice, lack of knowledge of issuance of notice, or insufficient opportunity/time to respond. - The assessee sought restoration of the matters to the file of the CIT(E) for fresh adjudication. Revenue's Contentions: - The revenue contended that notices were issued to the assessee, but the assessee failed to respond, thus failing to establish the genuineness of its charitable activities. - The revenue argued that the rejection orders were warranted based on the available material.

Which sections of the Income-tax Act were involved?

Section 12A,Section 12AB,Section 80G

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH

Before: DR. BRR Kumar & Shri Tapas Ram Misra

For Appellant: Shri Mitul Panchani, A.R
For Respondent: Shri Ram Tiwari, CIT-DR

PER TAPAS RAM MISRA, JUDICIAL MEMBER:

These two appeals were preferred by the assessee, a charitable Trust, against rejection of its applications for seeking registration/renewal of registration under Section 12A/12AB of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] and approval under Section 80G(5) of the Act. The applications were rejected by the Learned Commissioner of Income-Tax (Exemptions) [hereinafter referred to as ‘the CIT(E)’]. Since similar grounds arising from similar circumstances were raised in the present appeals, the same are, therefore, being disposed by way of a common order. Dela

The order continues below.

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