SEVASETU FOUNDATION,VADODARA vs. COMMISSIONER OF INCOME TAX (EXEMPTION), AHMEDABAD

ITA 3149/AHD/2026Status: DisposedITAT Ahmedabad19 October 20264 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the interests of justice would be well served by remanding the matter to the Learned Commissioner of Income Tax (Exemption) for consideration of the application afresh. This decision was based on the fact that the assessee had failed to furnish substantial documents and explanations, and the assessee's counsel prayed for an opportunity to present these to the CIT(E). Consequently, the Tribunal set aside the order rejecting the application for registration under section 12A(1)(ac)(iii) and also set aside the order rejecting the application for approval under section 80G(5)(iii) for fresh adjudication. The ratio decidendi is that when an assessee demonstrates a willingness to provide pending details and seeks an opportunity, remanding the matter to the lower authority for a fresh consideration, including the submitted explanations, serves the interests of justice. The operative direction is to remand both matters to the CIT(Exemption) for fresh adjudication.

What were the facts?

The assessee, Sevasetu Foundation, filed two appeals before the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, against separate orders dated 09.03.2026 passed by the Commissioner of Income Tax (Exemption), Ahmedabad. These orders rejected the assessee's application for registration under section 12A(1)(ac)(iii) of the Income Tax Act, 1961 (in ITA No.3148/Ahd/2026) and its application for approval under section 80G(5)(iii) of the Act (in ITA No.3149/Ahd/2026). The rejection was primarily on the grounds that the assessee failed to furnish requisite details/explanations and establish the genuineness of its activities, despite notices being issued. The assessment year(s) are not recorded.

What were the issues?

1. Whether the rejection of the assessee's application for registration under section 12A(1)(ac)(iii) of the Income Tax Act, 1961, by the CIT(Exemption) was illegal, unlawful, and against the principles of natural justice, particularly concerning the failure to respond to notices of hearing (turning on section 12A(1)(ac)(iii)). 2. Whether the CIT(Exemption) erred in rejecting the application for registration despite the objects and activities of the appellant being charitable and genuine, as discernible from the IT Portal (turning on section 12A(1)(ac)(iii)). 3. Whether the rejection of the application for approval under section 80G(5)(iii) of the Act was justified. Assessee's Contentions: The assessee argued that there was a sufficient cause for failure to respond to the notices and that it ought to have been allowed a further opportunity. It also contended that its objects and activities are charitable and genuine, and the CIT(E) erred in rejecting the application by ignoring these facts. Revenue's Contentions: The revenue, through the CIT.DR, argued that the assessee-trust needed to furnish requisite details/explanations and submissions before the CIT(E).

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD

Before: DR. B.R.R. KUMAR, VICE- & TAPAS RAM MISRA

For Appellant: Shri Samir Vora on behalf of Shri S N Divatia, AR
For Respondent: Shri Kiran Unavekar, CIT. DR
Hearing: 15.10.2026Pronounced: 19.10.2026

PER DR. B.R.R. KUMAR, VICE-PRESIDENT:

- Delay Condoned These two appeals have been filed by the assessee against the separate orders passed by the Learned Commissioner of Income Tax (Exemption), Ahmedabad both dated 09.03.2026, whereby the application of the assessee for registration under section 12A(1)(ac)(iii) of the Income Tax Act, 1961 in ITA No.3148/Ahd/2026 and the application for approval under section 80G(5)(iii) of the Act in ITA No.3149/Ahd/2026 were rejected.

ITA Nos. 3148-3149/Ahd/2026 Sevasetu Foundation AY NA - 2–

2.

The assessee has raised the following grounds of appeal:

1.

1 The order passed u/s.12A(1)(ac) on 09.03

The order continues below.

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