KAUSHALIYADEVI ATMARAM SINGHANIA CHARITABLE TRUSE,MUMBAI vs. CIT (EXEMPTION), MUMBAI

NATURAL JUSTICE 2.1 In the facts and the circumstances of the case, and in law, the impugned order is bad in law and illegal, as the same is framed in gross breach of the principles of Natural Justice. 2.2 Without prejudice to the generality of the above ground, the impugned order is bad in law and illegal as no sufficient and fair opportunity of being heard was provided to the Appellant. 2.3 It is submitted that in the facts and the circumstances of the case, and in law. the order is bad in law and illegal on this ground as well.

REJECTION OF THE APPLICATION FOR REGISTRATION 3.1 The CIT erred in rejecting the application for registration made by the Appellant u/s. 12AB r.w.s. 12A(1)(ac) (i) of the Act on the following grounds- (a) that the Appellant had not claimed exemption in previous years; and (b) that the Appellant had not fulfilled the stipulated conditions prescribed for filing application for approval in Form 10AB.

2 While doing so, the CIT erred in: (1) Basing his action on surmises, suspicion and conjecture; (ii) Taking into account irrelevant and extraneous considerations: (iii) Ignoring relevant material and considerations as submitted by the Appellant: (iv) Ignoring the fact that the initial application dated 27.08.2021 was correctly filed in Form 10AB and that it was mistakenly, only through oversight, that the section was selected as 10(23C)(iv) instead of section 12A (1) (ac) (i) of the Act; (v) Ignoring the fact that the surrender of the approval earlier granted and making fresh application was only at the instance of CPC, Bengaluru. (v) Ignoring the fact that there was no option available to make the application in Form 10AB seeking registration u/s. 12A(1)(ac)(i) of the Act as on 14.02.2024 and, therefore, the Appellant had filed the application in Form 10AB seeking registration u/s. 12A (1) (ac) (iv) of the Act on account of technical reasons on the part of CPC. Bengaluru. (vi) Ignoring the submissions made by the Appellant and arriving at the conclusion that the Appellant was required to file Form 10AB u/s. 12A(1)(ac) (vi)(B) of the Act.

3 It is submitted that in the facts and the circumstances of the case, and in law, no such rejection was called for.”

Brief facts of the case are that the assessee is a charitable trust registered u/s 12A of the Act w.e.f. 01.04.2001. Pursuant to the changes in the registration regime for the charitable organizations brought through the Finance Act, 2020, all the existing trusts had to apply for a fresh registration under the new provisions of section 12AB by filing an application in the prescribed Form. The assessee made efforts to comply with the requirements, but for one reason or the other, it has not been able to get the requisite registration. The chronology of events in this regard is as under: Sr. No. Date Events 1. 17.06.2002 Date of registration u/s 12A of the Act in the old regime 2. 27.08.2021 Application in Form 12A for provisional registration filed 3. 24.09.2021 Order for provisional registration received in Form 10 AC 4. 09.01.2024 Surrender of approval granted on 24.09.2021 as advised by CPC 5. 24.02.2024 Application in Form 10AC for registration u/s 12AB 6. 02.08.2024 Order of rejection of application for registration filed on 14.02.2024 4. It is seen that due to lack of understanding of the new provisions, the assessee erroneously filed for provisional registration that too wrongly mentioning section 10(23c)(iv) instead of section 12A(1)(ac)(i) of the Act whereas in view of the fact that it was already registered u/s 12A in the old regime, it had to file for regular registration directly. Subsequently, the assessee filed a fresh application for regular registration on 24.02.2024. Vide letter dated 12.06.2024, the assessee informed the Ld. CIT(E) that due to oversight it had wrongly mentioned an incorrect section earlier while filing the form and P a g e | 4 A.Y.2024-25. Kaushaliyadevi Atmaram Singhania Charitable Trust therefore a fresh form has been filed on 24.02.2024. Relevant portion of the assessee’s submissions is as under: “We submitted Form 10A on August 27, 2021, seeking registration and Approval was granted through Form No. 10AC on September 24, 2021, by PCIT/CIT. However, while applying through over sight, we have mentioned Clause (iv) of Clause (23C) of Section 10 instead of Sub-clause (i) of Clause (ac) of Sub-section (1) of Section 12A. Subsequently on realizing the clerical error we have contacted the Bangalore office of department and were informed that we need to surrender the certificate and make a fresh application. We have filed fresh application in form 10AB for obtaining registration under Sub Clause (iv) of Clause (ac) of Sub Section (1) of Section 12A on 14.02.2024. For your ready reference we enclose herewith Form 10AC Approval Order in Annexure- B and Copy of New application filed in Form 10AB in "Annexure - c". Thus, the fresh application filed due to error in original registration. In view of the circular no. 07/2024 dated 25.04.2024, We request you to kindly consider the matter sympathetically and grant the registration as requested. We shall be glad to provide any other information you may desire. We highly regret the inconvenience caused to your good-self.”

However, the assessee’s request as well as application for registration was rejected by Ld. CIT(E) vide order dated 02.08.2024 with the following observations: “3. On verification of the facts and circumstances of the case, it is found that the trust had registration u/s 12A on 17.06.2002, since, the assessee has Old registration before 01.04.2021 u/s 12A. Further, the assessee has filed ITR 7 and claimed exemption in previous years. 4 As per above mentioned provision of Income Tax Act, the assessee has to file Form 10AB u/s 12A(1)(ac)(vi)(B), if the assessee has not claimed exemption in previous year. Since the assessee has claimed exemption in previous years, therefore this application u/s 12A is not allowable. Further, the assessee is not fulfilling the stipulated conditions prescribed for filing application for approval in Form 10AB. In view of the above this application Form is hereby rejected.”

Aggrieved with the order of Ld. CIT(A), the assessee is in appeal before the Tribunal. Before us, Ld. AR has cited a plethora of decisions wherein the co- ordinate benches have allowed condonation of delay and/or rectification of inadvertent mistakes by the assessees and directed the revenue to consider the P a g e | 5 A.Y.2024-25. Kaushaliyadevi Atmaram Singhania Charitable Trust application for registration on merits. Some of the decisions cited by the assessee are as under: 1. Sharayu Foundation v. CIT (E) - [ITA No. 5115/M/2024, Order dated 21.01.2025 (Mumbai Tribunal)] 2. Chetna Organic Farmers v. CIT (E) - [ITA No. 984/ Hyd/2024, Order dated 20.01.2025 (Hyderabad Tribunal)] 3. ARREDS Trust v. CIT (E) [ITA No. 1665 / Chny / 2024, Order dated 08.01.2025 (Chennai Tribunal)] 4. Celebrate Life v. CIT (E) - [ITA No. 5692/M/2024, Order dated 31.12.2024 (Mumbai Tribunal)] 5. Datta Krupa Education Trust v. CIT (E) - [ITA No. 5152 /M/2024, Order dated 05.12.2024 (Mumbai Tribunal)] 6. Bombay Buddhist Association v. CIT (E) - [ITA No. 1527 /M/2024, Order dated 08.10.2024 (Mumbai Tribunal)] 7. Param Niketan Foundation v. CIT (E) - [ITA No. 1518/M / 2024, Order dated 04.07.2024 (Mumbai Tribunal)] 8. Shree Hari Samaj v. CIT (E) - [ITA No. 1517 /M/2024, Order dated 26.06.2024 (Mumbai Tribunal)] 9. Arya Samaj Safdarjung Enclave v. CIT (E) - [ITA No. 2810 / Del / 2022, Order dated 13.06.2023 (Delhi Tribunal)]

In view of the facts and circumstances of the case and decisions of the co- ordinate benches, we deem it appropriate to restore the issue back to the Ld. CIT(E) with the direction to consider the application filed by the assessee on 24.02.2024 and allow him to rectify any genuine mistake made in filling the P a g e | 7 A.Y.2024-25. Kaushaliyadevi Atmaram Singhania Charitable Trust application, by taking a physical form, if required. Ld. CIT(E) is, further, directed to decide the issue of registration on merits after giving due opportunity to the assessee for furnishing the requisite details as may be called for. 9. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 28.02.2025. MS. KAVITHA RAJAGOPAL RENU JAUHRI (न्यातयक सदस्य/JUDICIAL MEMBER) (लेखाकार सदस्य/ACCOUNTANT MEMBER