SAMUDAYIK KENDRA SUBHASH NAGAR PRABHAND SAMITI,JAIPUR vs. COMMISSIONER OF INCOME TAX EXEMPTION , JAIPUR

ITA 1440/JPR/2026Status: DisposedITAT Jaipur30 September 2026AY 2027-287 pages
AI SummaryRemanded

What were the facts?

The assessee, Samudayik Kendra Subhash Nagar Prabhand Samiti, filed an application for registration under Section 12AB of the Income Tax Act, 1961, on 30.09.2025. The Commissioner of Income Tax (Exemption), Jaipur (CIT(E)), rejected the application on 24.03.2026. The assessee's appeal is against this rejection. The primary reason for rejection was the assessee's lack of registration under the Rajasthan Public Trusts Act, 1959. The assessee had stated that it maintains a community centre owned by the Jaipur Development Authority (JDA) and therefore believed it would not be registered under the Devasthan Department. The CIT(E) noted that the trust deed's dissolution clause indicated assets would pass to the Subhash Nagar Nagrik Samiti, not the JDA, and that the assessee was not a government entity. No reply was filed by the assessee to the show cause notice. The impugned order did not record adverse findings on the genuineness of the assessee's activities.

What did the Tribunal hold?

The Tribunal held that while compliance with the Rajasthan Public Trusts Act, 1959, is a relevant consideration for the CIT(E) under Section 12AB(1)(b)(i)(B) of the Act, the outright rejection of an application due to a deficiency that is in the process of being cured requires consideration on a case-by-case basis. The Tribunal noted that the assessee had applied for registration under the Rajasthan Public Trusts Act on 25.03.2026, which was the day after the impugned order. The Tribunal found that the CIT(E)'s observation regarding the inadmissibility of an appeal before the Tribunal by an unregistered trust was beyond the scope of his proceedings and disregarded it. The Tribunal also referred to a coordinate bench decision which held that in cases where the process for curing a deficiency has been set in motion, the application should be preserved, and the assessee given an opportunity to submit the certificate upon issuance, rather than compelling fresh registration proceedings. Therefore, the Tribunal set aside the impugned order and restored the application to the file of the CIT(E) for a fresh decision, allowing the CIT(E) to examine all aspects, including the status of the Rajasthan Public Trusts Act application and the arrangement with the JDA. The assessee was directed to provide the relevant documents. The Tribunal expressed no opinion on the merits of the application.

What were the issues?

1. Whether the rejection of the application for registration under Section 12AB of the Income Tax Act, 1961, solely on the ground of non-registration under the Rajasthan Public Trusts Act, 1959, is sustainable, especially when the assessee has initiated the process for such registration. Assessee's contention: The non-registration under the Rajasthan Public Trusts Act, 1959, is a technical breach for which compliance has been initiated by applying for registration on 25.03.2026. The deficiency is curable and should not lead to outright rejection. The assessee also argued that it believed it would not be registered under the Devasthan Department as it only maintains a property of the JDA and has no ownership. Revenue's contention: The learned Departmental Representative relied on the impugned order passed by the CIT(E).

Which sections of the Income-tax Act were involved?

Section 12AB,Section 12A(1)(ac)(ii),Section 10 (23C),Section 29,Section 253(1)(c)

AI-generated summary — verify with the full judgment below

IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, JAIPUR Before: Shri Kuldip Singh, Judicial Member And Shri Prakash, Accountant Member ITA No: 1440/JPR/2026 Assessment Year: 2027-28

Samudayik Kendra CIT Subhash Nagar Prabhand Exemption Jaipur Samiti Vs 0, Subahsh Nagar (Respondent) Shopping Centre, Subhash Nagar, Jaipur PAN: AACAS 07807C (Appellant) Assessee Represented: Sh. Vonod Gangwal, CA Revenue Represented: Sh. Shravan Kumar Meena, CIT Date of hearing : 23-09-2026 Date of pronouncement : 30-09-2026

PER : PRAKASH, ACCOUNTANT MEMBER:-

1.

This appeal by the Assessee is directed against the order of the learned Commissioner of Income Tax (Exemption), Jaipur [hereinafter referred to as "the learned CIT(E)"] dated 24.03.2026 passed in Form No. 10AD under section 12AB(1)(b)(ii) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), rejecting the application of the Assessee for registration under section 12AB of the Act.

2.

The grounds of appeal raised by the Assessee before us in the memorandum of appeal in Form No. 36 read as under:

"

1.

Application for obtaining registration u/s 12AB was rejected due to non- obtaining of registration of Trust under Rajasthan Public

The order continues below.

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