SHRI KHANDAL VIPRA SEWA SANSTHAN ,JAIPUR vs. CIT(E), JAIPUR, JAIPUR

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ITA 663/JPR/2026Status: DisposedITAT Indore22 October 20266 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the Commissioner of Income Tax (Exemption) had passed a well-reasoned order and found no grounds to interfere. Regarding the first issue, the Tribunal noted that the assessee itself, in its undertaking within Form 10AB, declared that it was applying under section code 4A relevant to Section 12A(1)(ac)(vi)(B) and also stated that no income had been excluded from total income on account of Sections 10, 11, or 12 for any previous year ending on or before the date of application. However, the assessee's Income Tax Returns for AY 2023-24, 2024-25, and 2025-26 clearly showed that it had claimed exemption under Sections 11 and 12 in earlier years. This contradicted the conditions for applying under Section 12A(1)(ac)(vi)(B). Therefore, the application was rightly rejected as non-maintainable on this ground. Concerning the second issue, the Tribunal observed that the assessee was not registered under the Rajasthan Public Trust Act, 1959. While the assessee claimed registration under the Rajasthan Society Registration Act, 1958, and argued that dual registration was not possible, the CIT(E) had specifically sought an explanation regarding non-registration under the Rajasthan Public Trust Act, 1959, in light of Section 12AB(1)(b)(i)(B) and the Supreme Court's decision in New Noble Education Society. The assessee's explanation did not negate the requirement or the CIT(E)'s finding. The Tribunal confirmed the CIT(E)'s order and dismissed the appeal.

What were the facts?

The assessee, Shri Khandal Vipra Sewa Sansthan, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Jaipur, challenging an order dated 07.02.2026 passed by the Commissioner of Income Tax (Exemption), Jaipur (CIT(E)). The CIT(E) rejected the assessee's application for registration under Section 12A(1)(ac)(vi) of the Income Tax Act, 1961, filed in Form 10AB. The grounds for rejection were that the application was filed under the wrong section code and that the assessee was not registered under the Rajasthan Public Trust Act, 1959. The assessee was represented by none before the ITAT, while the Revenue was represented by the CIT. The appeal was filed on 20.03.2026. After several adjournments, the assessee's representative, a Chartered Accountant, appeared but stated he had no instructions. The Tribunal proceeded to decide the appeal based on the material on record and the arguments of the Revenue.

What were the issues?

The Tribunal had to decide the following issues: 1. Whether the learned CIT(E) erred in rejecting the application filed by the assessee under Section 12A(1)(ac)(vi) in Form 10AB for registration under Section 12AB of the Income Tax Act, 1961, on the ground that the application was filed in the wrong section code and the assessee was not registered under the Rajasthan Public Trust Act, 1959. Assessee's contentions (as inferred from the CIT(E)'s order and the grounds of appeal): - The application should have been considered under Section 12A(1)(ac)(ii) for renewal of registration. - Technical errors like choosing the wrong section code are curable defects, and the CIT(E) should allow rectification or treat the application as filed under the correct provision, emphasizing substance over form, citing ITAT rulings. - The assessee is registered under the Rajasthan Society Registration Act, 1958, and registration under the Rajasthan Public Trust Act, 1959, is not possible as only one registration is permitted under state acts. Revenue's contentions (as inferred from the CIT(E)'s order and the Tribunal's findings): - The assessee filed Form 10AB under section code 4A, relevant to Section 12A(1)(ac)(vi)(B), which requires that the applicant has commenced activities and has not taken the benefit of Sections 10, 11, or 12 in earlier years. - The assessee's Income Tax Returns for Assessment Years 2023-24 to 2025-26 show that it has taken the benefit of Sections 11 and 12 in earlier years, making the application under Section 12A(1)(ac)(vi)(B) non-maintainable. - The assessee is not registered under the Rajasthan Public Trust Act, 1959, which is a violation of Section 12AB(1)(b)(i)(B) of the Income Tax Act read with Section 17 of the Rajasthan Public Trust Act, 1959, citing the Supreme Court decision in New Noble Education Society.

Which sections of the Income-tax Act were involved?

Section 12A(1)(ac)(vi),Section 12AB,Section 10,Section 11,Section 12,Section 12A(1)(ac)(ii),Section 12AB(1)(b)(i)(B),Section 17

AI-generated summary — verify with the full judgment below

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

Before: S MT. ANNAPURNA GUPTA & SHRI KULDIP SINGH

IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR “A” BENCH, JAIPUR (PHYSICAL HEARING) BEFORE S MT. ANNAPURNA GUPTA, JUDICIAL MEMBER & SHRI KULDIP SINGH, JUDICIAL MEMBER ITA No: 663/JPR/2026

Shri Khandal Vipra Sewa The CIT (Exemption) Sansthan Jaipur. Vs (Respondent) 3-JA Opposite Lok Jumbis, Jhalana Sanstkanik Area, Jhalana Donngry, Jaipur. PAN: AAEAS5240B (Appellant)

Assessee Represented: None Revenue Represented: Sh. Ananad Swaroop, CIT Date of hearing : 12-10-2026 Date of pronouncement : 22-10-2026 ORDER PER : KULDIP SINGH, JUDICIAL MEMBER:-

The Appellants, Shri Khandal Vipra Sewa Sansthan by filing the present appeal, sought to set aside the impugned order dated 07.02.2026 passed by the Commissioner of Income Tax (Exemption), Jaipur [hereinafter referred to as the ‘CIT(E)’] on the ground that:- “1. The learned CIT(E) has erred on facts and in law in rejecting the application filed by the assessee u/s 12A(1)(ac)vi) in form 10AB seeking registration u/s 12AB of the IT Act, 1961 on the ground that (i) application filed in form 10AB is filed in wrong section code and taking benefit of section 10,11, &12(ii) assessee is not registered under Rajasthan Public Trust Act, 1959.

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2.

The appellant craves to alter, amend and modify any ground of appeal. 3. Necessary cost be awarded to the assessee.” 2. Briefly stated, facts necessary for consideration and adjudication of the issues at hand are : Appellant’s application moved in Form No. 10AB, seeking registration u/s 12A(1)(ac)(vi)(B) of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) was rejected on ground of non maintainability and for want of non- registration under Rajasthan Public Trust Act, 1959 (hereinafter referred to as the “RPT Act, 1959”) 3. Being aggrieved with the impugned order passed by the Ld. CIT(E), appellant has come up before the Tribunal by way of filing the present appeal. 4. We have heard Ld. DR for the Revenue and perused the record available on file. 5. The present appeal was filed by the appellant on 20.03.2026. thereafter notice was sent to the appellant. On one date i.e. 24.06.2026 the Bench did not function and case was adjourned to 23.09.2026, on which date Shri P.C. Parwal, C.A. appeared and made an oral request for adjournment, which was granted for 12.10.2026. Today on 12.10.2026 none appeared on behalf of the

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appellant. Shri P.C. Parwal, C.A. present in the court was asked to assist the court in this the matter, but he has feigned ignorance and pleaded no instruction on behalf of the appellant. It appears that the appellant is not interested in prosecuting the present appeal. So the Bench has decided to dispose off this appeal with the assistance of the Ld. DR for the Revenue on the basis of material on record. 6. We have perused the impugned order passed by the Ld. CIT(E), who has rejected the application on two grounds one maintainability and another non registration under RPT Act, 1959 by returning following findings as under:- “02. The applicant taking benefit of section 10, 11 & 12:- 2.1. Since applicant filed its application in form 10AB and verification of same says that applicant is applying for registration/ approval under the section code 4A relevant to section 12A(1)(ac) (vi) (B). The provision of section 12A(1)(ac)(vi)(B) are as under:-

"(vi) (B):- commenced and no income or part thereof of the said trust or institution has been excluded from the total income on account of applicability of sub-clause (iv) or sub clause (v) or sub clause (vi) or sub clause (via) of clause (23C) of section 10, or section 11 or section 12, for any previous year ending on or before the date of such application, at any time after the commencement of such activities".

From the plain reading of this section, it is evident that in this section, the applicant can apply only if, it has commenced activities and not taken benefit of section 10, 11 & 12 in earlier years. Thus, to verify taking of benefit of section 11 & 12, the applicant was asked vide notice dated 20.01.2026:-

"Since you have filed application in form 10AB for registration/ approval under the section code 4A relevant to section 12A(1)(ac) (vi)(B). It is evident that in this section, the applicant can apply only if it has commenced activities and not taken benefit of section 10, 11 & 12 in earlier years. But according to your

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reply it is seen that it has taken benefit of section 11, 12 or clause (iv), (v), (vi) & (via) of section 10(23C) in earlier years which is also evident from ITR filed for Α.Υ. 2023-24 to 2025-26. In view of the present application filed in Form No. 10AB is liable to be rejected as non-maintainable."

In response to above, the applicant furnished reply that :- "With regard to selection of section 12A(1)(ac) (vi) in filing the form we would like to submit that our application should be considered under section 12A(1)(ac)(ii) i.e. ): Used for the renewal of registration of trusts or institutions that are expiring after five years. Further Yes. Income Tax Appellate Tribunal (ITAT) rulings consistently state that 12A/12AA registration shouldn't be denied solely for technical errors like choosing the wrong section code; it's a curable defect, and the Commissioner (CIT-E) should allow rectification or treat the application as filed under the correct provision if the trust's genuineness and objects are sound, emphasizing substance over form. Denials are generally overturned if the core facts are clear and no material prejudice to the Revenue occurs, allowing for fresh consideration or allowing the assessee to correct the mistake. Key Findings on Form 10AB and Wrong Section Codes."

The reply placed on record. On perusal of the Income tax returns filed by the applicant, it is seen that the applicant filed ITR-7 for the A.Y. 2023-24, 2024-25 and 2025-26. Hence, it is clear that the applicant is taking benefit of section 10, 11 & 12 during the A.Y. -24, 2024-25 and 2025-26 and earlier years since the date of incorporation in 08.07.1994.

Hence, it is transpired that the society has claimed the exemption under section 11 & 12 in earlier years.

Further, the applicant alongwith Form 10AB, given verification/ undertaken, relevant portion of verification/undertaking in form 10AB reproduced as under:

"I GOPAL LAL SHARMA, son of Rameshwar Lal Sharma, hereby declare that the details given in the form are true and correct to the best of my knowledge and belief.

I undertake to communicate forth with any alteration in the Non-profit Company, or in the rules governing the Institution, made at any time hereafter. I further declare that I am filling this form in my capacity as Member (designation) having Permanent Account Number (PAN) ACZPS7207E and that I am competent to file this form and verify it. I further undertake that I am applying for registration/approval under the section code 4A having commenced activities on 01.04.2024, and also that no income or part thereof of the SHRI KHANDAL VIPRA SEWA SANSTHAN having

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Permanent Account Number (PAN) AAEAS5240Bhas been excluded from the total income on account of applicability of sub-clause (iv) or sub- clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10 or section 11 or 12 for any previous year ending on or before the date of making this application on 31.03.2025, at any time after the commencement of such activities."

From the above, the applicant itself stated that it has taken benefit of section 11, 12 or clause (iv), (v), (vi) & (via) of section 10(23C) in earlier years. Thus, thus falls out of the scope of registration u/s 12A of the Act under which the applicant has applied.

In view of the above, the present application filed in Form No.10AB is liable to be rejected as non-maintainable. ………… ……….. 3.6 Assessee vide letter dated 14.11.2025 was required to submit documents/explanation by 01.12.2025, the relevant portion of which is reproduced as under: -

"Whether the institution is registered under Rajasthan Public Trust Act, 1959. If not, please give explanation that why the same should not be considered as violation of section 12AB(1)(b)(i) (B) of the Income Tax Act read with sec 17 of the Rajasthan Public Trust Act, 1959 and decision of Hon'ble Apex Court in the case of New Noble Education Society Civil Appeal No. 3795 of 2014 dated 19- 10-2022 and why the application filed by you should not be rejected."

In response, the applicant has furnished that: The Trust is fully compliant and there is no violation of section 12AB read with Rajasthan Public Trust Act."

Thus, it is clear from the above, that institution is not registered under RPT Act, 1959. Before passing any adverse order, applicant was again asked vide show cause noticed dated 20.01.2026, relevant query is as under:

"It is seen that your institution is not registered under Rajasthan Public Trust Act, 1959, please give explanation that why the same should not be considered as violation of section 12AB(1)(b)(i) (B) of the Income Tax Act read with sec 17 of the Rajasthan Public Trust Act, 1959 and decision of Hon'ble Apex Court in the case of New Noble Education Society Civil Appeal No. 3795 of 2014 dated 19-10-2022 and why the application filed by you should not be rejected.

In response, the applicant has furnished that: "The Assessee Shri khandal vipra sewa sansthan is a cooperative society allready registered under the

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state act under Rajasthan state society registration act 1958 Copy of which is enclosed at P.B. No 1-8 thus satisfying the condition of registration of state act, further registration under Rajasthan Public trust act(Devasthan Vibhag) cannot be done as only one registration is done under the state act the assesse cannot be granted registration under both the act as the society act govern the registration done in Rajasthan Society act".

Thus, it is clear that society is not registered under Rajasthan Public Trust Act, 1959. Therefore, in light of above discussion and in the absence of registration under Rajasthan Public Trust Act, 1959, assessee is not eligible for registration u/s 12AB.”

7.

We are of the considered view that the Ld. CIT(E) has passed well reasoned order. The appellant has not come forward to controvert the findings returned by the Ld. CIT(E). We find no ground to interfere into the impugned order, hence confirmed and appeal filed by the appellant is hereby dismissed. Order pronounced in the open court on 22-10-2026 .

Sd/- Sd/- (ANNAPURNA GUPTA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Jaipur Dated:- 22/10/2026. *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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