ILA PALCHOUDHURI FOUNDATION,KOLKATA vs. C.I.T. (EXEMPTION), KOLKATA

ITA 2344/KOL/2026Status: DisposedITAT Kolkata30 September 20266 pages
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What did the Tribunal hold?

The Tribunal held that the order of the CIT(E) was not justified. The Tribunal found that the facts had not been properly appreciated by the CIT(E) and that the cancellation of the provisional approval without following the provisions of Section 12AB(4) of the Act was not justified. The Tribunal was of the view that one more opportunity should be provided to the assessee as the required evidence could not be properly appreciated by the CIT(E). Therefore, the Tribunal set aside the order of the CIT(E) and remanded the matter back to the CIT(E) for deciding the application afresh. The CIT(E) was directed to grant an opportunity of being heard to the assessee, consider any reply filed, and pass a speaking order in accordance with law. The assessee was directed not to seek unnecessary adjournments and to file the required evidence. For statistical purposes, the grounds of appeal were partly allowed.

What were the facts?

The assessee, Ila Palchoudhuri Foundation, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Kolkata Bench, challenging an order passed by the Commissioner of Income Tax (Exemption), Kolkata (CIT(E)). The assessment year is not specified. The appeal concerns registration under Section 12A(1)(ac)(ii) of the Income Tax Act, 1961. The appeal was filed 30 days beyond the limitation period, and the assessee sought condonation of delay, citing the ill health of a trustee responsible for financial and tax matters. The ITAT condoned the delay. The CIT(E) had rejected the assessee's application for renewal of registration, holding that the initial registration obtained under Section 12A(1)(ac)(i) was void ab initio due to the submission of wrong facts, specifically, the absence of a pre-existing registration under Section 12A/12AA prior to April 1, 2021, which was a prerequisite for the initial registration.

What were the issues?

1. Whether the order passed by the Ld. CIT(E) under Section 12A(1)(ac)(ii) of the Income Tax Act, 1961, rejecting the registration, is bad in law and on facts, and therefore, liable to be quashed or set aside? The assessee argued that the CIT(E) erred by declaring the initial registration under Section 12A(1)(ac)(i) void ab initio without recording any specific wrong facts, thus violating principles of natural justice. The assessee contended that the CIT(E) exceeded jurisdiction by declaring the initial registration void ab initio during a renewal application process, as cancellation can only be done under Section 12AB(4) after due process. The assessee also argued that any inadvertent error in selecting a sub-clause in the initial application is not fatal and does not defeat substantive rights of a genuine trust, citing judicial precedents. The assessee further argued that the genuineness of the trust's objects and activities were not disputed, and the rejection was based solely on a technical issue. The revenue, represented by the Ld. DR, relied on the order of the CIT(E) and requested it be confirmed, though it had no objection if the matter was remanded.

Which sections of the Income-tax Act were involved?

Section 12A(1)(ac)(ii),Section 12A(1)(ac)(i),Section 12AB(4),Section 12AB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘B’ BENCH AT KOLKATA

Before: SHRI GEORGE MATHAN & SHRI RAKESH MISHRA

PER RAKESH MISHRA, ACCOUNTANT MEMBER:

This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Exemption), Kolkata [Ld. ‘CIT(E)’] passed in respect of registration u/s 12A(1)(ac)(ii) of the Income Tax Act, 1961 [the 'Act'] for AY Not Applicable dated 22.03.2026. 1.1 The Registry has informed that the appeal is barred by limitation by 30 days. The assessee has filed a pe

The order continues below.

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