SHREE GOREGAON DIGAMBER JAIN MANDIR TRUST,MUMBAI vs. ITO-EXEM WARD 1(3), MUMBAI

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ITA 4886/MUM/2026Status: DisposedITAT Mumbai21 September 2026AY 2023-2414 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the assessee trust has a long-standing charitable credential, being in existence for 50 years. The denial of registration under the new scheme appeared to be due to a genuine and bona fide procedural error. The Tribunal emphasized that procedural laws should facilitate justice and that a flexible and pragmatic approach is necessary, rather than strict adherence leading to injustice. It noted that the legislature, through the Finance Act, 2024, had introduced a proviso to Section 12A(1)(ac) allowing condonation of delay if reasonable cause is shown. Applying the principles laid down by the Supreme Court in Mst. Katiji, the Tribunal found that substantial justice should be preferred over technical considerations. It concluded that the delay in filing Form 10A was to be condoned as there was sufficient cause and no allegation of deliberate delay from the Revenue. Consequently, the order of the CIT(A) was set aside, and the matter was restored to the CIT(A) for proper adjudication on merits after giving the assessee due opportunity. The grounds were allowed for statistical purposes.

What were the facts?

The assessee, Shree Goregaon Digamber Jain Mandir Trust, is a religious and charitable trust originally registered under Section 12A of the Income-tax Act, 1961, since May 9, 1974. For Assessment Year 2023-24, it filed its return claiming exemption under Section 11. The Central Processing Centre (CPC) issued an intimation under Section 143(1) denying this exemption, stating it was due to the trust's failure to renew/re-register its 12A registration under the new scheme introduced by the Finance Act, 2020, which mandated re-registration under Section 12AB. Consequently, the CPC treated the entire gross receipts of Rs. 57,28,286 as taxable income. The assessee admitted to not obtaining fresh registration under Section 12AB for the year. The Commissioner of Income-tax (Appeals) upheld the CPC's order, stating that compliance with statutory provisions is mandatory and ignorance of law is not a valid ground for non-compliance.

What were the issues?

1. Whether the denial of exemption under Section 11 by the CPC, upheld by the CIT(A), was erroneous, considering the trust's long-standing charitable status and registration since 1974, and whether the denial due to a procedural lapse (non-renewal/re-registration under Section 12AB) was against the principles of natural justice? - Assessee's contention: The denial of exemption due to a bona fide procedural lapse, especially given the trust's 50-year charitable history and the fact that trustees are not tax professionals, is unreasonable. The adjustment made by CPC under Section 143(1) requires verification of facts and application of funds, which is outside its limited scope. - Revenue's contention: Compliance with statutory provisions is mandatory, and ignorance of law is not a valid ground. The CPC's adjustment was permissible under Section 143(1)(a) as the return did not contain details of valid registration under Section 12AB. 2. If exemption under Section 11 is denied, whether the entire gross receipts of Rs. 57,28,286 could be treated as taxable income without allowing for legitimate expenditure? - Assessee's contention: Even if exemption is denied, the income should be computed as per normal provisions for an Association of Persons (AOP), allowing for actual legitimate expenditure, and not taxing the entire gross receipts. - Revenue's contention: The assessee had not furnished any revised computation or documentary evidence before the CPC substantiating allowable expenditure at the stage of processing under Section 143(1).

Which sections of the Income-tax Act were involved?

Section 11,Section 12A,Section 12AB,Section 143(1),Section 143(1)(a)

AI-generated summary — verify with the full judgment below

Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI PRABHASH SHANKAR

For Respondent: Shri Rajgopal K Parthsarthy (Sr.DR)
Hearing: 19.08.2026Pronounced: 21.09.2026

आदेश की प्रतितलति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file.

P a g e | 14 ITA No. 4886/Mum/2026 A.Y. 2023-24 Shree Goregaon Digamber Jain Mandir Trust सत्यावपि प्रवि //True Copy// आदेशानुसार/ BY ORDER,

उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीलीय अतिकरण/ ITAT, Bench, Mumbai.

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