SRI VARDHAMAN STHANAKVASI JAIN SHRAVAK SANGH,BANGALORE vs. COMMISSIONER OF INCOME TAX(EXEMPTIONS), BANGALORE

This appeal is filed by the assessee against the order of the Learned Commissioner of Income Tax (Exemptions), Bangalore [hereinafter referred to as "CIT (Exemptions)"] dated 22.03.2025, rejecting the application for registration under section 12AB of the Income-tax Act, 1961 (hereinafter referred to as "the Act").

The assessee, a registered trust named Sri Vardhman Sthanak Vasi Jain Shravak Sangh, filed an application in Form No. 10AB on 27.09.2024 seeking registration under section 12AB of the Act. The case was assigned to the Jurisdictional Assessing Officer (JAO) for necessary verification. Based on the report received from the JAO, the ld. CIT (Exemptions) rejected the application for registration on the following grounds: 1. That a sum of ₹3,25,000 was debited from the assessee’s bank account, but the financial statements did not disclose any corresponding explanation for this transaction.

Based on these two points, the Learned CIT (Exemptions) held that the application was not fit for registration under section 12AB of the Act and rejected it accordingly.

Being aggrieved by the order of the learned CIT exemption, the assessee is in appeal before us.

The Learned Authorized Representative (AR) appeared before us and filed a paper book running from pages 10 to 83. He submitted the following: • The amount of ₹3.25 lakhs debited from the bank account was actually invested in Fixed Deposits and this is clearly shown in the financial statements, which are placed at pages 47 to 53 of the paper book.

The Learned Departmental Representative (DR) did not object to the request of the assessee for restoring the matter to the file of the ld. CIT (Exemptions) for fresh consideration in accordance with the law.

We have carefully considered the submissions made by both sides and have also gone through the documents placed on record. From the preceding discussion, we note that the rejection of registration under section 12AB has been made only on two grounds — (i) the alleged unexplained bank debit of ₹3.25 lakhs, and (ii) the food expenses of ₹83,160 not being supported by vouchers/ bills.

Regarding the food expenses like ₹83,160, we note that there is no allegation for any misuse of funds or deviation from the charitable objects. As such, the only allegation is this that there is no supporting . bills or vouchers. It is also important to remember that the purpose of granting registration under Section 12AB is to verify whether the institution or trust is genuinely existing for charitable purposes and carrying out activities in accordance with its stated objects. Minor accounting deficiencies or absence of a few supporting bills should not be the sole basis to deny registration when the overall conduct and financials support the genuineness of the trust and its activities. Further, the assessee has expressed willingness to fully cooperate and furnish all necessary explanations and supporting documents. The Department also has no objection to restoring the matter.

In view of the above facts and in the interest of justice and fair play, we are of the considered opinion that the matter needs to be examined in the light of the above stated discussion by the ld. CIT (Exemptions) and adjudicate the same as per the provisions of law. Accordingly, we set aside the order dated 22.03.2025 passed by the ld. CIT (Exemptions), and restore the matter to his file for adjudication in the light of the above stated discussion and in accordance with law after giving proper opportunity to the assessee to present its case and supporting documents.

In the result, the appeal filed by the assessee is hereby allowed for statistical purposes.