VEER BACHE CHARITABLE TRUST ,MUMBAI vs. COMMISSIONER OF INCOME TAX EXEMPTIONS, MUMBAI

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ITA 590/MUM/2025Status: DisposedITAT Mumbai18 March 2025AY 2025-26Bench: S/Shri Anikesh Banerjee (JM) & Omkareshwar Chidara ( (Accountant Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the appellant should be given an opportunity to explain its case on merits before the Ld. CIT(E). The Ld. CIT(E) is directed to decide the issues on merits, and if the Trust amends its MOA and reapplies, the Ld. CIT(E) can pass an order as per law.

What were the facts?

The appellant, Veer Bache Charitable Trust, applied for registration under Section 12AB of the Income-tax Act. The CIT(E) rejected the application citing a delay in replying to a show-cause notice and a clause in the MOA allowing funds to be used for studies abroad, which was considered a violation of Section 11.

What were the issues?

Whether the Ld. CIT(E) erred in rejecting the registration application without providing sufficient opportunity, and if the clauses in the MOA violated Section 11 of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 12A,Section 12AB,Section 11

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Mumbai “F” Bench, Mumbai.

For Appellant: Shri Ashish Heliwal
Pronounced: 18/03/2025

5. The order passed is contrary to the principles of natural justice, as no reasonable opportunity was given to present the appellant's case or file the requested clarifications.

6. The appellant prays for a remand of the matter to the Learned Commissioner to allow a fresh opportunity to file the 2 Veer Bache Charitable Trust required documents and demonstrate compliance with the provisions of the Income-tax Act.

2.

From the above grounds of appeal before the ITAT, it is observed that the Ld. CIT(E) has rejected the registration of the Trust u/s. 12AB for two reasons :- a) The appellant-Trust filed its reply for the Show Cause Notice issued by the Ld. CIT(E) with delay of three days and hence not taken into consideration. b) The Memorandum of Association (MOA) conveys the applicant’s intention to utilise the funds outside India which is a violation of section 11 of the Income Tax Act. The Ld. CIT(E) has stated that the Trust Deed/MOA point No. 6(ii) of the objects clause allows the trustees to provide funds to deserving students to study abroad also and this violated section 11 of the Act. Hence, the application for Registration was rejected.

3.

During the hearing before the ITAT, Ld. AR of the appellant has stated that no proper opportunity was given to the appellant to explain its case and the delay of three days is not intentional and due to administrative problems. It was pleaded that an opportunity may be given to the appellant before Ld. CIT(E) on merits. In the open court, Ld. AR of the appellant has stated the appellant Trust would amend the grounds suitably and file the same afresh.

4.

The Ld. DR relied on the order of Ld. CIT(E).

5.

After hearing the rival submission, it is decided to give an opportunity to the appellant to explain the case on merits before Ld. CIT(E) . The Ld. CIT(E) is directed to decide the issues on merits. If the appellant Trust amends the clause 6(ii) and file the application again, the Ld. CIT(E) may pass an order as per law. In this connection, the order of this ITAT in the case of Sila for Change Foundation (ITA no. 4274/Mum/2024, “G” Bench dated 20.12.2024) may be taken into consideration by both the parties.

3 Veer Bache Charitable Trust

6.

The appeal of the appellant is allowed for statistical purposes.

Order pronounced in the open Court on 18/03/2025.

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