SARASWATI PUNYARTH TRUST,AJMER ROAD, NEAR TEGORENAGAR, HERAPURA vs. COMMISSIONER OF INCOME TAX (EXEMPTIONS), III FLOOR, KAILASH HEIGHTS, TONK ROAD, JAIPUR

ITA 1123/JPR/2026Status: DisposedITAT Jaipur08 October 2026AY 2026-279 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal allowed the appeal for statistical purposes, setting aside the impugned order and restoring the application to the file of the CIT(E) for a fresh decision. On the issue of opportunity of being heard (Ground No. 1), the Tribunal found that the opportunity provided was not reasonable and effective. A single letter with a very short compliance date, without a show cause notice detailing proposed reasons for rejection, was insufficient. The Tribunal noted inconsistencies in the record regarding notices and the assessee's response, which indicated an application for RPT Act registration was pending. Regarding incomplete documents (Grounds 2 & 3), the Tribunal acknowledged that Rule 17A(2)(e) required copies of prior registration orders. However, it noted these were defects curable by furnishing copies and that the CIT(E) had not doubted the existence of the prior registration. The Tribunal dismissed the contention that re-registration inquiry is limited to objects and genuineness, stating compliance with other laws is relevant under section 12AB(1)(b)(i). Ground 2 was allowed for statistical purposes. On the RPT Act registration (Ground 4), the Tribunal noted the assessee was not registered but was pursuing it. It refrained from deciding the merits, stating the CIT(E) would decide afresh on available facts. Ground 4 was allowed for statistical purposes. The Tribunal also addressed an observation by the CIT(E) regarding the maintainability of appeals by unregistered trusts under the RPT Act, stating it was beyond the scope of the CIT(E)'s proceedings and did not bind the Tribunal. The assessee was granted liberty to furnish documents and the CIT(E) was directed to provide a reasonable opportunity of hearing, examining all issues afresh without being bound by prior observations.

What were the facts?

The assessee, Saraswati Punyarth Trust, filed an appeal against the order of the Commissioner of Income Tax (Exemptions) (CIT(E)), Jaipur, dated 14.03.2026. The CIT(E) rejected the trust's application in Form No. 10AB for registration under section 12AB(1)(b)(ii) of the Income Tax Act, 1961, for Assessment Year 2026-27. The application was filed on 30.09.2025. The CIT(E) issued a deficiency letter on 25.02.2026, setting 02.03.2026 as the compliance date. The rejection was based on incomplete documentation, specifically the absence of copies of prior registration under section 12AA and approval under section 80G, and the trust's lack of registration under the Rajasthan Public Trust Act, 1959 (RPT Act). The trust argued that the opportunity to be heard was inadequate and the defects were procedural and curable.

What were the issues?

1. Whether the Ld. CIT(E) erred in rejecting the application without providing an adequate and effective opportunity of being heard, as required by section 12AB(1)(b) of the Act? 2. Whether the rejection of the application on the ground of incomplete documents (copies of prior registration under section 12AA and approval under section 80G) was justified, considering these were procedural defects and the trust was already registered? 3. Whether the Ld. CIT(E) erred in holding that registration under the Rajasthan Public Trust Act, 1959, is a mandatory precondition for granting registration under section 12AB of the Income-tax Act, 1961? Assessee's Contentions: - The deficiency letter provided insufficient time to obtain registration under the RPT Act and no further opportunity was given before rejection. - The absence of copies of prior registration/approval was a curable procedural lapse, as the Department already possessed this information. - Clause (g) of the Explanation to section 12AB(4) pertains to false or incorrect particulars, not mere omissions of copies. - At the re-registration stage, the inquiry should be confined to the objects and genuineness of activities. - There is no explicit provision in the Income-tax Act making registration under the RPT Act a precondition. Revenue's Contentions: - The assessee failed to furnish documents required by Rule 17A(2) of the Income Tax Rules, 1962. - The assessee is admittedly not registered under the RPT Act. - The revenue supported the reasons recorded in the impugned order.

Which sections of the Income-tax Act were involved?

Section 12AB(1)(b)(ii),Section 12A(1)(ac)(ii),Section 12AB(4),Section 12AB(1)(b)(i),Section 12AB(1)(b),Section 12A(1)(ac)(i),Section 12AA,Section 80G,Section 12A,Section 10(23C),Section 253(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH, JAIPUR

Before: Shri Kuldip Singh & Shri Prakash

PER : PRAKASH, ACCOUNTANT MEMBER:-

1.

This appeal by the Assessee is directed against the order of the learned Commissioner of Income Tax (Exemptions), Jaipur [hereinafter referred to as “the learned CIT(E)”] dated 14.03.2026 passed under section 12AB(1)(b)(ii) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), rejecting the application of the assessee in Form No. 10AB for registration under section 12A(1)(ac)(ii) of the Act. Saraswati Punyarth Trust

2.

The grounds of appeal raised by the Assessee before us in the memorandum of appeal in Form No. 36 read as under:

“1. The Ld CIT(E) has erred in law as well as in facts in rejecting

The order continues below.

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