SHREE JAY JALARAM SEVA TRUST,GANDHIDHAM, KUTCH vs. CIT (EXEMPTION), AHMEDABAD

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ITA 2996/AHD/2026Status: DisposedITAT Ahmedabad15 October 2026AY 2026-275 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that notices were issued to the assessee to furnish details and documents. The CIT(E) rejected the application on the ground that the assessee failed to furnish substantial documents. The assessee's counsel prayed for an opportunity to submit the same to the CIT(E). The Revenue's counsel argued that the assessee-trust needs to furnish requisite details/explanations and submissions before the CIT(E). Considering these submissions, the Tribunal held that the interests of justice would be served by remanding the matter to the CIT(E) for fresh consideration of the application under Section 12A(1)(ac)(iii), taking into account the submissions and explanations submitted by the assessee. Consequently, the issue regarding approval under Section 80G(5)(iii) was also set aside for fresh adjudication. The appeals were allowed for statistical purposes.

What were the facts?

The assessee, Shree Jay Jalaram Seva Trust, filed two appeals before the Income Tax Appellate Tribunal (ITAT), Ahmedabad, against separate orders dated 29.06.2026 passed by the Commissioner of Income Tax (Exemption) (CIT(E)). The CIT(E) had rejected the assessee's application for registration under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961, in ITA No. 2995/Ahd/2026, and its application for approval under Section 80G(5)(iii) of the Act in ITA No. 2996/Ahd/2026. The rejection was primarily on the grounds that the genuineness of the trust's activities was not established due to an absence of verifiable evidence of beneficiaries served, specific programs conducted, or outcomes achieved. The assessment year under consideration is 2026-2027. The assessee contended that it had provided all requested details and clarifications.

What were the issues?

1. Whether the Learned CIT(E) erred in rejecting the appellant's application for registration under Section 12A(1)(ac)(iii) on the ground that the genuineness of its activities was not established, despite the appellant submitting all requested details and clarifications sufficient to establish genuineness, and failing to appreciate that the scope of inquiry at the registration stage is prima facie? (Assessee's contention: All details were provided; rejection was based on grounds not put to the assessee; scope of inquiry is limited. Revenue's contention: Assessee failed to furnish requisite details/explanations and establish genuineness). 2. Whether the Learned CIT(E) erred in rejecting the application without appreciating the provisions of Section 12AB(1)(b)(i), which requires the Commissioner to satisfy himself about the genuineness of activities and compliance with other laws, and in failing to record any finding on the charitable character of the objects of the appellant? 3. Whether the Learned CIT(E) erred in rejecting the application for approval under Section 80G(5)(iii) of the Act, given that the issue of registration under Section 12A(1)(ac)(iii) was being challenged?

Which sections of the Income-tax Act were involved?

Section 12A(1)(ac)(iii),Section 80G(5)(iii),Section 12AB(1)(b)(i),Section 12AA(1)(b)

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 Dhruv Suchak, AR
For Respondent: Shri Kiran Unavekar, CIT. DR
Hearing: 13.10.2026Pronounced: 15.10.2026

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

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 29.06.2026, whereby the application of the assessee for registration under section 12A(1)(ac)(iii) of the Income Tax Act, 1961 in ITA No.2995/Ahd/2026 and the application for approval under section 80G(5)(iii) of the Act in ITA No.2996/Ahd/2026 were rejected.

ITA Nos. 2995-2996/Ahd/2026 Shree Jay Jalaram Seva Trust Asst. Year : 2026-27 - 2–

ITA No.2995/Ahd/2026

2.

The assessee has raised the following grounds of appeal:

1.

On the facts and in the circumstances of the case and in law, the Learned Commissioner of Income Tax (Exemption) ["Ld. CIT(E)"] has erred in rejecting the appellant's application for registration on the ground that the genuineness of its activities has not been established. The Ld. CIT(E) failed to appreciate that, the appellant had submitted all the details, documents and clarifications specifically called for which were sufficient to establish the genuineness of activities of the trust. The Ld. CIT(E) erred in holding that there was "absence of verifiable evidence of beneficiaries served, specific programmes conducted, or outcome achieved" contrary to the material on record. 2. Without prejudice to the above, the Ld. CIT(E) failed to appreciate the provisions of Section 12AB(1)(b)(i) of the Act which requires the Ld. CIT(E) to call for such documents or information from the trust or make such inquiries as he thinks necessary in order to satisfy himself about the genuineness of activities of the Trust. The Ld. CIT(E) erred in rejecting the application under consideration without appreciating that the appellant had submitted all the details, documents and clarifications called. In absence of any findings on failure of the appellant to submit the details, documents, clarifications or queries specifically called for by the Ld. CIT(E), The learned CIT(E) ought to have granted registration under section 12AB(1)(b)(i). 3. Without prejudice to the above and on the facts and in the circumstances of the case and in law, the learned CIT(E) erred in rejecting the application on a ground which was never put to the Appellant. At no stage was the Appellant called upon to show cause why registration should not be refused for want of "verifiable evidence of beneficiaries served, specific programmes conducted, or outcomes achieved". No such particulars were ever asked for, neither the questionnaire dated 24-04-2026 nor the notices dated 04-06-2026 and 24-06-2026 identified any deficiency in the material filed or specified what further evidence was required. Rejection on a ground not put to the assessee is impermissible. 4. Without prejudice to the above and on the facts and in the circumstances of the case and in law, the Learned CIT(E) has erred in rejecting the appellant's application for registration on the ground that the

ITA Nos. 2995-2996/Ahd/2026 Shree Jay Jalaram Seva Trust Asst. Year : 2026-27 - 3– genuineness of its activities has not been established. The Ld. CIT(E) failed to appreciate that, at the stage of grant of registration, the scope of enquiry is limited to examining the objects of the applicant and the genuineness of its activities on a prima facie basis. The registration proceedings are not in the nature of assessment proceedings, and therefore, the Ld.CIT(E) was not justified in undertaking a detailed examination of the activities or rejecting the application on such grounds. 5. Without prejudice to the above and on the facts and in the circumstances of the case and in law, the learned CIT(E) erred in failing to record any finding whatsoever on the objects of the Appellant. Section 12AB(1)(b)(i) requires the Commissioner to satisfy himself about (A) the genuineness of the activities of the trust and (B) the compliance of such requirements of any other law as are material for the purpose of achieving its objects and, in the scheme of registration, about the charitable character of the objects themselves. The objects of the Appellant, namely relief of the poor, education, medical relief, yoga, preservation of environment and preservation of monuments, are squarely within section 2(15) of the Act and were never doubted An order that is silent on one of the twin conditions is not a lawful order of rejection. 6. Without prejudice to the above, the learned CIT(E) ought to have appreciated that the expression "genuineness of activities" means that the activities are real and are directed towards the objects of the trust, and not that they have achieved a particular scale or measurable "outcome". The Appellant's Annakshetra, ration distribution and clothes distribution programmes are, on the material on record, real and genuine activities in furtherance of the object of relief of the poor. 7. Without prejudice to the above, the Ld. CIT(E) has erred by passing the impugned order by invoking section 12AA(1)(b) of the Act and further concluding that the Appellant had failed to satisfy him of "this foundational requirement of section 12AB(1)(a) read with Item (A)". Therefore, the impugned order is passed invoking incorrect provisions of law and hence is vitiated by non-application of mind. 8. Without prejudice to the above, the Ld. CIT(E) erred in passing the impugned order without affording the Appellant any effective opportunity of being heard by fixing the hearing on 29-06-2026 through a notice dated 24-06-2026, having an interval of only five days, of which only three were working days. The Appellant craves leave to add to, alter, amend, substitute or delete any of the above grounds and to file additional evidence and additional grounds

ITA Nos. 2995-2996/Ahd/2026 Shree Jay Jalaram Seva Trust Asst. Year : 2026-27 - 4– at or before the hearing of this appeal. Each of the grounds as mentioned above is without prejudice to each other.

3.

The facts of the case are that the assessee is a Trust and had applied for registration under Form No.10AB under the provisions of the Act. The Ld. CIT(E) rejected the application for registration u/s.12A(1)(ac)(iii) of the Income Tax Act, 1961, on the ground that the assessee-trust failed to furnish the requisite details/explanation and to establish the genuineness of its activities.

4.

Aggrieved by the order of the Ld. CIT(E), the Assessee filed appeal before the Tribunal.

5.

At the outset, we find that notices were issued from time to time to furnish details/documents as called for. The Ld. CIT(E) rejected the application of the assessee on the ground that that the assessee-trust failed to furnish substantial documents. Therefore, the Ld. Counsel prayed that given an opportunity, the same would be apprised to the Ld. CIT(E). Ld. CIT(DR) argued that the assessee-trust needs to furnish requisite details/explanations and submissions before the Ld. CIT(E). Having considered the facts on record, we hold that interests of justice would be well served by remanding the matter to the Ld. CIT(E) for consideration of the application afresh and to pass an order by taking into consideration the submissions /explanations submitted by the assessee.

ITA Nos. 2995-2996/Ahd/2026 Shree Jay Jalaram Seva Trust Asst. Year : 2026-27 - 5–

ITA No.2996/Ahd/2026

6.

Since we have remanded the issue to the Ld. CIT(E) in ITA No.2995/Ahd/2026 regarding the rejection of application u/s.12A(1)(ac)(iii) of the Act, we also set-aside the issue for approval of registration u/s.80G(5)(iii) of the Act in ITA No.2996/Ahd/2026 for fresh adjudication.

7.

In the result, both the appeals of the assessee are allowed for statistical purposes.

The order is pronounced in the open Court on 15.10.2026. Sd/- Sd/- (TAPAS RAM MISRA) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT (True Copy) Ahmedabad; Dated 15.10.2026 MV आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��थ� / The Respondent. 2. संबंिधत आयकर आयु� / Concerned CIT 3. 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad गाड� फाईल / Guard file. 6.

आदेशानुसार/ BY ORDER, True Copy सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad

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