SHRI DASHA PALIVAL BRAHMAN GYATI TRUST,BHAVNAGAR vs. THE CIT(EXEMPTION), AHMEDABAD

ITA 45/AHD/2026Status: DisposedITAT Chandigarh29 September 20266 pages
AI SummaryRemanded

What were the facts?

The assessee, Shri Dasha Palival Brahman Gyati Trust, filed appeals ITA Nos. 45 & 46/Ahd/2026 before the Income Tax Appellate Tribunal (ITAT), Ahmedabad 'A' Bench. The appeals were filed belatedly with a delay of 778 days, which the Tribunal condoned due to the age and health-related difficulties of the active trustees. ITA No. 45/Ahd/2026 challenges an order dated 22/09/2023 by the Commissioner of Income Tax (Exemption) (CIT(E)), Ahmedabad, denying registration under section 12A of the Income Tax Act, 1961. The CIT(E) had cancelled the provisional registration granted to the assessee. ITA No. 46/Ahd/2026 pertains to the denial of renewal of registration under section 80G.

What did the Tribunal hold?

The Tribunal held that Section 13(1)(b) cannot be invoked at the stage of considering an application for registration under Section 12A/12AB. The scope of inquiry by the Commissioner at this stage is limited to the genuineness of the trust, its execution, and whether its activities conform to its declared objects. The question of denial of exemption under Section 11 on the ground of Section 13(1)(b) applicability arises only during assessment proceedings, not at the registration stage. The Tribunal noted that the CIT(E) had not recorded any finding that the assessee had actually incurred any expenditure for the benefit of the particular caste, relying solely on the objects of the trust. Therefore, the order of the CIT(E) denying registration under Section 12A was set aside and the matter was remanded for reconsideration. For the Section 80G renewal, the matter was also restored to the CIT(E) for adjudication based on the decision regarding Section 12A registration and the reasons for the delay in filing the application.

What were the issues?

1. Whether Section 13(1)(b) of the Income Tax Act, 1961, can be invoked at the stage of granting registration under Section 12A of the Act, when the trust's objects are restricted to a particular community or caste. The assessee contended that Section 13(1)(b) is not applicable at the registration stage and relied on decisions of the Gujarat High Court and ITAT Ahmedabad Bench. The revenue's contentions are not explicitly recorded, but the CIT(E)'s order implies reliance on Supreme Court judgments in CIT vs. Palghat Shadi Mahal Trust and CIT vs. Dawoodi Bohara Jamat to deny registration. 2. Whether the denial of renewal of registration under Section 80G was justified. The assessee argued for renewal, while the CIT(E) denied it due to a belated application and the absence of a valid Section 12A registration. The specific arguments of the revenue on this issue are not detailed.

Which sections of the Income-tax Act were involved?

Section 12A,Section 11,Section 13(1)(b),Section 12AB,Section 80G

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH

Before: DR. BRR Kumar & Shri Tapas Ram Misra

For Appellant: Shri Tushar Hemani, Sr. Advocate
For Respondent: Shri Kiran Unavekar, CIT-DR

PER TAPAS RAM MISRA, JUDICIAL MEMBER:

ITA No. 45/Ahd/2026 is filed by the Assessee against the order passed by the Commissioner of Income Tax (Exemption), Ahmedabad dated 22/09/2023 denying registration under section 12A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).

2.

Both these appeals have been filed belatedly with the delay of 778 days. The assessee has filed an Affidavit seeking condonation of delay. It is stated on affidavit that the active Trustees of the assessee trust were senior citizens and were facing various age and health related diff

The order continues below.

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