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Facts
The assessee, a trust, applied for registration under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961. The CIT(E) rejected the application on grounds of insufficient documentary evidence regarding application of income for poor relief, lack of approvals for courses conducted, and running the trust on commercial lines.
Held
The Tribunal found that the CIT(E)'s rejection was primarily due to the lack of documentary evidence. In the interest of natural justice, the case was remitted back to the CIT(E) to provide the assessee with one more opportunity to present its case and furnish necessary details.
Key Issues
Whether the CIT(E) was justified in rejecting the registration application without providing sufficient opportunity for the assessee to submit documentary evidence.
Sections Cited
12A, 12A(1)(ac)(iii), 2(15)
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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI S.S. VISWANETHRA RAVI & SHRI S. R. RAGHUNATHA
आदेश /O R D E R
PER S. R. RAGHUNATHA, AM :
The present appeal is filed by the assessee against the order dated 23.11.2024 passed by the Commissioner of Income Tax(Exemptions) (hereinafter referred to as “ld.CIT(E)”), rejecting the approval sought u/s.12A of the Income Tax Act, 1961 (hereinafter referred to as the “Act”).
The assessee is a trust and filed an application dated 02.05.2024 in Form 10AB under Rule 17A, seeking registration u/s.12A(1)(ac)(iii) of the :-2-: ITA. No.:3214 /Chny/2024 Act. The ld.CIT(E) rejected the said application dated 02.05.2024 on the grounds that the assessee did not furnish documentary evidence to justify that the trust had applied its income towards the relief of the poor, did not produce necessary approvals from government authorities for the courses conducted, did not furnish details of fees collected for each class / course and that the assessee is running the trust on ‘commercial lines’.
Aggrieved by the order passed by the Ld.CIT(E), the assessee is in appeal before us.
Before us, the Ld.AR submitted that the assessee is indeed a charitable trust and it is very well eligible to get the approval u/s.12A(1)(ac)(iii) of the Act. It further submitted that the observations of the ld.CIT(E) are not correct and that it was given a very short notice to respond to the Show Cause Notice. It was contended that the notice is dated 15.11.2024, while the submissions are to be given on or 19.11.2024. The assessee had provided the details to the extent possible and submitted that if one more opportunity is given, it would establish before the ld.CIT(E) that the activities of the trust are indeed charitable in nature and thus prayed for remitting the matter back to file of the ld.CIT(E) for fresh consideration.
Per contra, the Ld.DR supported the views taken by the ld.CIT(E) and argued that the rejection is justified. The Ld.DR further submitted that when the assessee files its application before the ld.CIT(E) for approval u/s.12A of :-3-: ITA. No.:3214 /Chny/2024 the Act, it should be ready with all the records and documents and the plea of short notice is unjustified, given the fact the Form 10AB was filed as early as 02.05.2024. The Ld.DR thus prayed that the appeal of the assessee may be dismissed.
We have heard the rival submissions and perused the materials on record and gone through the order of the ld.CIT(E). We find that the ld.CIT(E) had held that the assessee is not eligible for approval u/s.12A of the Act for the reason that no documentary evidence was submitted by the assessee that income is applied towards the ‘relief of the poor’ or for ‘medical relief’.
Elaborate discussions were made to hold that the activity of the assessee would not fall within the ambit of ‘education’ as envisaged u/s.2(15) of the Act since the assessee failed to produce necessary approvals from government authorities for starting the educational institutions and certified courses, did not furnish details of fees collected for each class / course and that the assessee is running the trust on ‘commercial lines’. We find that the conclusion arrived at by the Ld.CIT(E) is for the reason that the assessee had not furnished the documentary evidence in support of its case. In the interest of natural justice and fairness, we deem it appropriate to remit the case back to the file of the Ld.CIT(E) for providing one more opportunity to the assessee to present the case by allowing the grounds of appeal filed by the assessee. Needless to say that the assessee be diligent and furnish all
:-4-: ITA. No.:3214 /Chny/2024 the required details before the ld.CIT(E) as and when called for without seeking unnecessary adjournments.
In the result the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the court on 20th November, 2025 at Chennai.