ALL INDIAN SKI & HIDE TANNERS AND MERCHANTS ASSOCIATES,CHENNAI vs. CIT(E), CHENNAI

ITA 2115/CHNY/2026Status: DisposedITAT Chennai25 September 2026AY 2027-283 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the order of the Ld. CIT(E) required reconsideration both in law and in facts. The Tribunal noted that the assessee trust was formed in 1983 and had been enjoying exemption since inception, with no change in its objects as originally approved by the Revenue. This principle of consistency was considered important. The Tribunal also relied on Ground No. 3 raised by the assessee, which highlighted the trust's activities in scientific research, pollution control, and promotion of sustainable manufacturing processes. The Tribunal observed that these activities clearly fall within the definition of charity as discussed in Section 2(15) of the Act. Therefore, the order of the Ld. CIT(E) could not be sustained. The matter was restored back to the file of the Ld. CIT(E) with a direction to rehear the matter after giving the assessee an opportunity of being heard as per Section 282 of the Act. The assessee was directed to participate without seeking adjournments and substantiate its Ground No. 3. The grounds taken by the assessee were allowed for statistical purposes only in terms of these directions. No issue was expressly left undecided.

What were the facts?

The assessee, All Indian SKIN & Hide Tanners and Merchants Association, filed an appeal against the order of the Commissioner of Income Tax (Exemption), Chennai, dated 28.03.2026, for Assessment Year 2027-28. The assessee had applied for registration under Section 12AB of the Income Tax Act, 1961, in Form 10AB on 26.09.2025. The Ld. CIT(E) rejected the application, holding that the trust was not for public benefit but confined to a pre-defined group, thus failing the test of charity. The assessee contended that its activities involved scientific research and initiatives to control pollution from the leather tanning industry and promote sustainable manufacturing processes. The assessee also pointed out that it was formed in 1983 and had been enjoying exemption since inception without any change in its objects. Previous orders from co-ordinate benches in the assessee's own case had confirmed its entitlement to benefits under Sections 11 and 12.

What were the issues?

1. Whether the order of the Commissioner of Income Tax (Exemptions) is without jurisdiction, contrary to law, facts, and principles of natural justice, equity, and fair play? (Mixed question of law and fact, concerning the validity of the order). 2. Whether the Honourable CIT(E) erred in rejecting the application in Form 10AB seeking registration u/s 12AB of the Income Tax Act, 1961? (Question of law and fact, concerning the applicability of Section 12AB). 3. Whether the Honourable CIT(E) erred in rejecting the registration u/s 12AB by failing to appreciate that the appellant trust's activities, aimed at scientific research, pollution control in the leather tanning industry, and promoting sustainable manufacturing, fall within the definition of charity under Section 2(15) of the Act? (Question of law and fact, concerning the interpretation of Section 2(15) and the nature of the assessee's activities). 4. Whether the Honourable CIT(E) erred in rejecting the registration u/s 12AB on the assumption that the appellant trust's activities are in the nature of mutual benefit for members and thus fail the test of charity? (Question of law and fact, concerning the distinction between charitable and mutual benefit activities). Assessee's Contentions: - The Ld. CIT(E)'s order is without jurisdiction and contrary to law, facts, and principles of natural justice. - The Ld. CIT(E) erred in rejecting the application for registration u/s 12AB. - The Ld. CIT(E) failed to appreciate that the trust's activities (scientific research, pollution control, sustainable manufacturing) qualify as charity under Section 2(15). - The rejection was based on an incorrect assumption that the activities were for mutual benefit and failed the test of charity. - The trust has been enjoying exemption since inception without change in objects, and previous co-ordinate bench decisions in its own case have confirmed entitlement to benefits under Sections 11 and 12. Revenue's Contentions: - The judgment records no specific contentions for the revenue.

Which sections of the Income-tax Act were involved?

Section 12AB,Section 2(15),Section 11,Section 12,Section 282

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: HONOURABLE SHRI ABY T. VARKEY & SHRI GAGAN GOYAL

Hearing: 19.08.2026Pronounced: 25.09.2026

PER GAGAN GOYAL, AM: This is an appeal preferred by the assessee against the order of Ld. Commissioner of Income Tax (E), (hereinafter referred to as the ‘Ld. CIT(E)’), Chennai dated 28.03.2026 for the Assessment Year (hereinafter referred as the ‘AY’) 2027-28. GROUDS OF APPEAL

1.

The order of the Honourable Commissioner of Income Tax (Exemptions) is without juri iction, is contr

The order continues below.

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