S R KALLA MEMORIAL CHARITABLE TRUST,JAIPUR vs. ITO EXEMPTION, JAIPUR

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ITA 1000/JPR/2026Status: DisposedITAT Indore29 September 2026AY 2027-2811 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee's appeals were not maintainable. The reasoning was that the assessee's first application, though filed under a wrong section, was decided on merits by the CIT(E) vide order dated January 16, 2026. When an application is rejected on merits, the statutory remedy available to the assessee is to challenge the order before a higher forum. Instead of doing so, the assessee filed a second application in Form 10AB, which amounted to a misuse of the process of law. The Tribunal noted that the CIT(E) had categorically recorded that since no appeal was filed against the order dated January 16, 2026, the findings for rejection had attained finality. Therefore, the second application was not maintainable, and consequently, the appeals against the orders rejecting the second application also did not lie. The Tribunal answered the framed question in the negative and dismissed both appeals.

What were the facts?

The assessee, S.R. Kalia Memorial Charitable Trust, filed appeals against orders dated March 27, 2026, and March 28, 2026, passed by the Commissioner of Income Tax (Exemption), Jaipur (CIT(E)). These orders rejected the Trust's applications filed in Form 10AB for registration under Section 12A(1)(ac)(ii) and for approval under Section 80G(5)(ii) of the Income Tax Act, 1961. The rejection was primarily based on the CIT(E)'s finding that the Trust failed to prove the genuineness of its activities. The Trust had initially filed an application under Section 12A(1)(ac)(iii) on August 4, 2025, which it later claimed was under the wrong section. This initial application was rejected by the CIT(E) on January 16, 2026. The Trust then filed a fresh application under Section 12A(1)(ac)(ii), which led to the impugned orders.

What were the issues?

1. Whether the Ld. CIT(E) erred in rejecting the application filed in Form 10AB under Section 12A(1)(ac)(ii) of the Act, holding that the Trust's activities were not genuine and were carried out beyond its objects, and that it could not be determined if the activities were genuine and as per the objects, thus making the order presumptive and based on suspicion. 2. Whether the Ld. CIT(E) erred in rejecting the application filed under Section 80G(5)(ii) of the Act by relying on the order rejecting the Section 12A(1)(ac)(ii) application, without specific reference to the section under which the order was passed, and by holding that the Trust's activities were not genuine and were carried out beyond its objects, and that the Trust failed to furnish complete replies. Assessee's Contentions: The assessee argued that the rejection of its initial application under Section 12A(1)(ac)(iii) was due to its withdrawal request, not on merits, and that the CIT(E) wrongly rejected it. The assessee contended that the impugned orders were presumptive, based on suspicion, and illegal. It argued that the non-filing of an appeal against the order dated January 16, 2026, was due to filing the application under the wrong clause, not an acceptance of allegations of non-genuine activities. Revenue's Contentions: The revenue contended that the assessee misused the process of law by filing a second application in Form 10AB instead of filing an appeal against the earlier order dated January 16, 2026. The revenue argued that a second application in Form 10AB is not maintainable and is liable to be dismissed.

Which sections of the Income-tax Act were involved?

Section 12A(1)(ac)(ii),Section 12A(1)(ac)(iii),Section 80G(5)(ii),Section 2(15)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR “B” BENCH, JAIPUR

Before: SHRI KULDIP SINGH & SHRI PRAKASH, ACCOUNTANCT MEMBER

IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR “B” BENCH, JAIPUR (PHYSICAL HEARING) BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER & SHRI PRAKASH, ACCOUNTANCT MEMBER ITA No: 1000 & 1001/JPR/2026

S.R. Kalia Memorial The ITO Charitable Trust Exemption , Vs 1-F-84 N Near Govt. Girls Jaipur. (Respondent) School, Satkar Market Malviya Nagar, Jaipur. PAN: AADTS7261A (Appellant) Assessee Represented: Sh. Vinod Kumar Gupta, C.A. Revenue Represented: Sh. Shravan Kumar Meena, CIT Date of hearing : 16-09-2026 Date of pronouncement : 29-09-2026 ORDER PER : KULDIP SINGH, JUDICIAL MEMBER:-

The Appellant, S.R. Kalia Memorial Charitable Trust by filing aforesaid interconnected appeals, sought to set aside the impugned orders both dated 27.03.2026 & 28.03.2026 passed by the Commissioner of Income Tax (Exemption), Jaipur [hereinafter referred to as the ‘CIT(E)’] on the grounds inter-alia that:- ITA No. 1000/JPR/2026 “1. Under the facts, circumstance of the case and in law, the Ld. CIT (Exemption), Jaipur has erred in passing the impugned order, dated

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27.03.2026, denying the application, filed in Form 10AB, by the appellant, under section 12A(1)(ac)(ii) of the Income Tax Act, 1961 (the Act). The said rejection is illegal and bad in law, hence, the impugned order deserves to be quashed.

2.

Under the facts, circumstance of the case and in law, the Ld. CIT (Exemption), Jaipur has erred in denying application, filed under section 12A(1)(ac)(ii) of the Act, by holding on one hand that the activities of the appellant are not genuine and were being carried out beyond the objects of the trust and on the other hand holding that it could not be determined whether the applicant is genuinely carrying out charitable activity and that activities are as per objects. Thus, the impugned order is presumptive and based on suspicion. Hence, the order deserves to be quashed.

3.

Under the facts, circumstance of the case and in law, the Ld. CIT (Exemption), Jaipur has erred in denying the application, filed under section 12A(1)(ac)(ii) of the Act, by holding that the activities carried out by the appellant does not fall under charitable activities as per section 2(15) of the Act and the appellant trust has been used to siphoning off the funds without appreciating the documents/information/explanation submitted by the appellant in right perspective and past history of the appellant. Hence, the impugned order is illegal and deserves to be quashed.

4.

Under the facts, circumstance of the case and in law, the Ld. CIT (Exemption), Jaipur has erred in denying application, filed under section 12A(1)(ac)(ii) of the Act, by taking adverse inference on the non-filing of appeal by the appellant against the order, dated 16.01.2026, passed against the application, dated 04.08.2025, filed inadvertently, under section 12A(1)(ac)(iii) of the Act without appreciating that the non-filing of appeal was not due to acceptance of allegation of non-genuine activities rather due to filing of application under wrong clause. Hence, the impugned order is presumptive and unjustified and deserves to be quashed.

5.

The appellant craves your indulgence to add, amend or alter all or any grounds of appeal before or at the time of hearing.”

ITA No. 1001/JPR/2026

“1. Under the facts, circumstance of the case and in law, the Ld. CIT (Exemption), Jaipur has erred in passing the impugned order, dated 28.03.2026, denying the application, dated 27.09.2026, filed by the appellant,

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in Form 10AB, under section 80G (5)(ii) of the Income Tax Act, 1961 (the Act). The said order is illegal and hence deserves to be quashed.

2.

Under the facts, circumstances of the case and in law, the Ld. CIT (Exemption), Jaipur, has erred in passing the impugned order, without giving specific reference to the section/sub section/clause under which order has been passed. Thus, the impugned order deserves to be quashed.

3.

Under the facts, circumstance of the case and in law, the Ld. CIT (Exemption), Jaipur has erred in denying application filed under section 80G(5)(ii) of the Act, by placing reliance on the order, dated 27.03.2026, passed for denying the application, filed under section 12A(1)(c)(ii) of the Act without appreciating that the order, dated 27.03.2026, itself is presumptive, illegal and contrary to the law as well as facts of the case. Hence, the said order is illegal and hence deserves to be quashed.

4.

Under the facts, circumstance of the case and in law, the Ld. CIT(Exemption), Jaipur has erred in denying application, filed under section 80G(5)(i) of the Act, by holding that the activities of the appellant are not genuine and have been carried out beyond the objects of the trust without appreciating the extensive submission/documentary evidence, made/submitted by the appellant, during the course of proceedings and without considering the past history of the appellant. Hence, the said order is unsustainable in the light of the prevalent law and deserves to be quashed.

5.

Under the facts, circumstance of the case and in law, the Ld. CIT(Exemption), Jaipur has erred in denying application filed under section 800(5)(ii) of the Act, by holding that the appellant has failed to furnish complete replies during the proceedings which is against the material available on record. Thus, the impugned order is arbitrary and hence, deserves to be quashed.

6.

The appellant craves your indulgence to add, amend or alter all or any grounds of appeal before or at the time of hearing.”

2.

Briefly stated, facts necessary for consideration and adjudication of the issues at hand are : Appellant’s applications in Form No. 10AB, seeking registration u/s 12A(1)(ac)(ii) and for seeking approval u/s 80G(5)(ii) of the Income Tax Act, 1961

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(hereinafter referred to as the “Act”) were rejected by the Ld. CIT(E). On failure of the appellant, to prove genuineness of its activities as per object of the Trust. 3. Feeling aggrieved with the impugned orders passed by the Ld. CIT(E), appellant has come up before the Tribunal by way of filing the present appeals. 4. We have heard Ld. ARs for the appellant and Ld. DR for the Revenue and perused the record available on file. 5. Undisputedly the appellant trust is established with the object of providing medical relief, relief to the poor, promoting education, knowledge sharing and advancement of medical knowledge in the field of gastroenterology. It is also not in disputed that the appellant had filed an application in Form no. 10AB for seeking registration u/s 12A(1)(ac)(iii) of the Act on 04.08.2025, which was under wrong sections. The appellant had perused that application before the Ld. CIT(E) by submitting details and documents. Subsequently, the appellant came to know that application has been filed under wrong section, as it was required to be filed u/s 12A(1)(ac)(ii) of the Act, but has not preferred to withdraw the same as no such facility was available on the Income Tax Portal. Thereafter appellant filed fresh

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application u/s 12A(1)(ac)(ii) of the Act. It is also not in dispute the appellant vide its reply dated 15.01.2026 made a request to Ld. CIT(E) to consider the application filed u/s 12A(1)(ac)(ii) of the Act and to treat the earlier application filed u/s 12A(1)(ac)(iii) of the Act as withdrawn and the said application was rejected by the Ld. CIT(E) vide order dated 16.01.2026. It is also not in dispute that the second application filed by the appellant was pursued by filing necessary details and got it decided on merits. 6. Ld. AR for the appellant challenging the impugned order contended that in the earlier application moved by the appellant in Form No. 10AB under wrong section, it had moved an application for withdrawal of the said application moved under wrong section, which was not accepted, rather Ld. CIT(E) has wrongly rejected his application vide order dated 16.01.2026. Ld. AR for the appellant further contended that its first application filed in Form No. 10AB was rejected on account of withdrawal of the application and not on merits. 7. However on the other hand, Ld. DR for the Revenue in order to controvert the contention raised by the appellant argued that the appellant has misused the process of law by filing second

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application in Form No. 10AB instead of filing the appeal against the earlier order dated 16.01.2026 passed by the Ld. CIT(E) rejecting his application seeking registration u/s 12A & 80G of the Act on merits. Ld. DR for the Revenue further contended that a second application in Form No. 10AB is not maintainable and is liable to be dismissed. 8. In the backdrop of the aforesaid undisputed facts and argument address by Ld. AR for the appellant and Ld. DR for the Revenue the sole question arises for determination in this appeal “as to whether appeals filed by the appellant against the impugned order dated 27.03.2026 is maintainable in the face of the fact that on his earlier application moved in Form No. 10AB before the Ld. CIT(E) seeking registration u/s 12A(1)(ac)(ii) of the Act was dismissed on merits vide order dated 16.01.2026, which order was never challenged before the higher forum, rather got decided 2nd application moved in Form 10AB by the Ld. CIT(E).” 9. Ld. CIT(E) while passing the impugned order noticed that the earlier application filed by the appellant in Form No. 10AB, though under wrong section, was rejected on merits, which order has never been challenged by filing the appeal before the Tribunal, thus

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attained finality operative part of the findings returned on this issue

is extracted for ready perusal as under:- “"1. On perusal of the office records and documents furnished by you, it is noted that the application seeking registration u/s 12A(1)(ac) (iii) of the I.T. Act, 1961 filed on 04.08.2025 in form 10AB was rejected by this office vide order DIN No. ITBA/EXM/F/EXM45/2025-26/1084832366(1) dated 16.01.2026 on the following ground-  Non-Genuineness of Activities For reference the relevant part of earlier rejection order is reproduced as under "Hence, it is clear that the activities of the applicant trust are not genuine and conclusion drawn from above is under: -  Not furnished the declaration u/s 13(1)(c).  Not furnished the copy of land document/NOC/rent agreement etc. for the premise used by the applicant's trust  Not furnished any explanation about what is the advance against the land of Rs.3,24,368/-in F.Y. 2022-23? When was it advanced and to whom? Also not produced the copy of agreement and the PAN, address of the seller, where is the property located & for what use it shall be taken. Has the land deal been completed as on date.  On perusal of I&E account, the applicant has shown accumulated fund of F.Y 2020-21 [Rs 4,65,000/-) and of F.Y. 2021-22 (Rs. 21,05,000/-] but not furnished when the accumulated fund is used and for what purpose along with supporting documents  Not furnished the copy of ledger account of various expenses claimed like medical help and camp expenses, Conference expenses, Salary (Ankur mittal], consultancy charges, faculty travelling expenses. Donation to NGO from the FY. 2023-24 to 31.10.2025.  Not explained the previous contributions reversed. Why, to whom and reflected banking entries.  On perusal of the reply furnished by the applicant, it is noticed that various conferences were organised at S.R. KALLA MEMORIAL GASTRO & GEN HOSPITAL, Grand Uniara hotel, Ashok Club, HOTEL RAJPUTANA SHERATON. The applicant not produced the literature, details of participants, organisers of these conferences, who are the beneficiaries of these conferences, who were attended these conferences.  Not explained following entries reflecting in bank account: -  Rs. 15,00,000/- from MARUDHAR ISG CHAPTER (Credit)  Rs. 5,88,000/- from AXS-LA RENIOR (Credit)  Rs. 2,71,920/- to SEVEN SKY CATERERS (Debit)  Rs. 50,000/- and Rs. 23,950/- to ROYAL TULIP HOTELS & RESORTS (Debit)

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 Rs. 3,24,368/- to DR. MUKESH KALLA (Debit) and where these entries reflecting in Balance Sheet and I&E account. Hence from the above it is clear that the activities are not verifiable. Further it is amply clear that the trust has been used to siphoning of funds by the trustees and obtaining grants from the pharma companies which in any case are related to the hospital business of the trustees. Therefore, the applicant's claim of registration u/s 12AB is also liable to be rejected on ground of not proving its genuineness of activity." On this ground of rejection, no appeal was filled by the applicant. Thus, it is. logically assumed that findings on this ground are admitted finally. Thus, please furnish an explanation as to why your application for registration u/s 12A(1)(ac)(ii) on 27.09.2025 and 80G(5)(ii) on 27.09.2025 may not be rejected on the aforementioned ground ie. Non-Genuineness of Activities."

10.

The appellant instead of withdrawing application filed in Form No. 10AB, in which impugned order was passed, continued to justify that second application is maintainable by filing the following explanation before Ld. CIT(E) as under:- “7. The explanation to above findings is as follows:

a) The appeal was not filed by the assessee as the rejection was not due to Non genuineness of activities, rather it was due to suo-moto act of the assessee, to withdraw the application filed under the incorrect section 12A(1)(ac) (iii) since, the assessee has already filed the application under the correct section.

b) The reason for non-response to the pending questions to the notice u/s 12A(1)(ac)(iii) dated 16.12.2025 and 10.01.2026 was simply that the assessee had filed the application in Form 10AB under this section by mistake and this section is not applicable to the assessee.”

11.

Undisputedly appellant’s application moved in Form No. 10AB, though filed under wrong section, has been disposed off primarily on

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the ground that the appellant had failed to prove “genuineness of its activities”. It is a matter of common knowledge that when the appellant’s application has been rejected by the Ld. CIT(E) on merits, the only statutory remedy lie with appellant was to challenge the order before the higher forum because mere filing of the application under wrong section does not disentitle, the appellant to file the appeal, but appellant continued to raise contention that he had sought to withdraw his application, but was not allowed. 12. It is surprising as to why the appellant has continued to pursue his second application filed in Form 10AB despite pointing out by Ld. CIT(E) that instead of filing the appeal against the order passed in Form 10AD dated 16.01.2026. It is also surprising as to why the second application filed by the appellant, in which impugned order was passed, was not dismissed by ld. CIT(E) on the ground of maintainability. 13. We are of the considered view that when the appellant’s first application filed in Form 10AB was rejected in Form No. 10AD dated 16.01.2026, it had the only remedy to challenge that order before the higher forum and not to misuse the process of law by again moving an application in Form 10AB before Ld. CIT(E) particularly

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when his first application was decided on merits. Moreover Ld. CIT(E) while passing the impugned order has categorically recorded the findings; “that when the appellant had not filed any appeal against rejection of its application filed in Form No. 10AD vide order dated 16.01.2026, it is logically assumed that the findings for rejection in the order had attained finality.” Even then appellant has not preferred to challenge the order dated 16.01.2026 (supra) before the higher forum. 14. We are further of the considered view that when the appellant has proceeded under wrong advise to file the second application in Form No. 10AB and continued the pursue the same by filing documents/submission despite pointing out by the Ld. CIT(E) during proceedings of the second application, in which impugned order was passed, it amounts to misuse of the process of law by filing one application after the other. 15. When the appellant had statutory remedy to challenge the order dated 16.01.2026(supra) passed on its first application, though filed under wrong section, which it has got disposed of on merits, the second application in Form No. 10AB before the ld.

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CIT(E) was misused of the process of law. So in the face of order dated 16.01.2026, passed by Ld. CIT(E) on application filed by the appellant in Form no. 10AB on 04.08.2025, second application filed on the same cause of action was not maintainable and in return the appeal against the said order also does not lie. So the question framed by the Bench is answered in negative and as such present appeal is not maintainable. 16. Resultantly, both the appeals filed by the appellant are dismissed. Order pronounced in the open court on 29-09-2026 .

Sd/- Sd/- (PRAKASH) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Jaipur Dated:- 29/09/2026. *Santosh. Copy of the order forwarded to: 1. The Appellant- 2. The Respondent- 3. CIT 4. CIT(A) 5. DR, ITAT, Jaipur. 6. Guard File By order,

Asst. Registrar

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