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Facts
Mondal Education Trust, an assessee, filed its return for AY 2021-22. The AO disallowed an exemption of ₹59,12,165/-, citing the trust's failure to provide details of new registration under Section 12AB or 10(23C), which was required due to amendments effective from June 2020. The CIT(A) upheld the disallowance, noting that the trust's approval was for AY 2022-23 onwards, making it ineligible for AY 2021-22.
Held
The ITAT, noting the lack of proper compliance and opportunity of being heard, set aside the CIT(A)'s order. The case was restored to the CIT(A) for a fresh hearing, granting the assessee a proper opportunity to make submissions on the merits of its appeal, with the possibility of remanding to the AO if necessary.
Key Issues
Applicability of new registration requirements under Section 12AB/10(23C) for charitable trust exemptions for AY 2021-22, and whether proper opportunity of hearing was provided to the assessee.
Sections Cited
250, 143(1), 12A, 12AA, 10(23C), 12AB, 246A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA ‘C’ BENCH, KOLKATA
Before: SHRI GEORGE MATHAN & SHRI RAKESH MISHRA
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Addl/JCIT(A)-4, Chennai [hereinafter referred to as Ld. ‘Addl/JCIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2021-22 dated 26.11.2024, which has been passed against the intimation order u/s 143(1) of the Act, dated 07.12.2022. During the course of hearing before us, the assessee filed an adjournment application. Since the adjournment was not on sufficient ground, therefore, the same was rejected and the appeal was heard.
The Registry has informed that the appeal is barred by limitation by 20 days. At the time of hearing, the Ld. Counsel for the assessee submitted the reasons for the delay in filing the appeal. After perusing the same, we find force in the reasons mentioned and are satisfied that I.T.A. No.: 367/KOL/2025 Assessment Year: 2021-22 Mondal Education Trust. the assessee had a reasonable and sufficient cause and was prevented from filing the instant appeal within the statutory time limit. We, therefore, condone the delay and admit the appeal for adjudication.
The assessee is in appeal before the Tribunal raising the following grounds of appeal: “The appellant being a Trust, filed the Return of Income for the A.Y. 2021- 22 on 09.12.2021 declaring total income of Rs. 2,31,667/-. The Trust was registered on 18.05.2009 vide Registration No. APE01188 and eligible for exemption u/s 12A/12AA/10(23C) (vi). The income was assessed by Ld. Asst Director of Income Tax, CPC, Bengaluru u/s 143(1) of the Income Tax Act, 1961 on 26.10.2022 for the A.Y. 2021-22. During the course of assessment u/s 143(1) of the Income Tax Act, 1961 the Ld. Assessing Officer has disallowed exemption of Rs. 59,12,165/- on the ground that "In the Schedule Part A General "Details of registration or approval under Income Tax details of Section 12AB Act" or 10(23)(iv)/10(23)(v)/10(23)(vi)/10(23)(via) is not provided in the column "section under which registration is applied." The act has been amended from 01.06.2020 and all entities have to get new registration/ approval u/s 12AB or 10(23)(iv)/10(23)(v)/10(23)(vi)/10(23)(via) to be eligible for exemption. Since in your case, new registration/ approval details is not available, exemption claimed in Sl. No. 4i to 4viii in Schedule Part B - TI is not allowable." Being aggrieved and dissatisfied with the order passed by the Ld. ADIT, CPC, Bengaluru u/s 143(1) of the Income Tax Act, 1961, the instant appeal was preferred by the appellant on 12.07.2022 claiming on merit that the disallowance of exemption was not tenable in the eye of law. Relying on the assessment order of the Ld. Assessing Officer, the ADDL/JCIT(A)-4 Chennai has dismissed the appeal, despite the fact that new registration u/s 12AB or 10(23)(iv)/10(23)(v)/10(23)(vi)/10(23)(via) was not applicable for the Assessment Year 2021-22. In the course of assessment proceedings u/s 143(1) of the Act and appeal proceedings u/s 250 of the Act, the Ld. Assessing Officer and Ld. ADDL/JCIT(A)-4 Chennai completely mi irected themselves on the application of new registration u/s 12AB 10(23)(iv)/10(23)(v)/10(23)(vi)/10(23)(via) as summarised below: or 1) The Authorised Representative of your appellant filed memorandum of appeal before Ld. ADDL/JCIT(A)-4, Chennai on 12.07.2022 u/s 246A. In I.T.A. No.: 367/KOL/2025 Assessment Year: 2021-22 Mondal Education Trust. connection with appeal opportunities were provided by sending notice u/s 250 of the Act to substantiate the grounds of appeal but the Authorised Representative of your appellant has not filed any response and for that Ld. ADDL/JCIT(A)-4 Chennai has dismissed the appeal. As your appellant fully relied upon the Authorised Representative so your appellant is not responsible for any negligence of the Authorised Representative. Therefore, the appellant urges that order passed by the Ld. ADDL/JCIT-4 Chennai, be set aside. 2) Now the facts of the case are as follows: a. The Finance Act 2020 has been amended from 01.06.2020 and all the entities have to get new registration/ approval u/s 12AB or 10(23)(iv)/10(23)(v)/10(23)(vi)/10(23)(via) to be eligible for exemption. The new scheme of registration is effective from 1 of April 2021, i.e., from the Financial Year 2021-22 relating to the Assessment Year 2022-23. While assessing income for the Assessment Year 2021-22, the Ld. A.O. misinterpreted provision of section 12AB of Act and held that this section is not applicable for the appellant, despite of the fact that the income in question was related to the Assessment Year 2021-22. The Ld. ADDL/JCIT(A)-4 Chennai has also wrongly relied on the order of Ld. A.O. and dismissed the appeal. b. The Ld. A.O. has written in his order u/s 143(1) that in ITR 7 of the Assessment Year 2021-22, the assessee has not provided details of 12AB new registration or approval u/s or 10(23)(iv)/10(23)(v)/10(23)(vi)/10(23)(via) in the column "Section under which registration is applied". The ITR 7 was filed on 09.12.2021 and application for new registration in Form 10A was filed on 24.11.2022. As application for new registration was filed after filing ITR 7 it was not possible to disclose the details of new registration in ITR 7 of the Assessment Year 2021-22. c. In the grounds of appeal before Ld. ADDL/JCIT(A)-4 Chennai it was mentioned that "Our Trust was registered under old registration policy. Since we have existing registration therefore, we have supposed to have complied with the above law and hence we are eligible for tax exemption for the A.Y. 2021-22." While passing order the Ld. ADDL/JCIT(A)-4 Chennai has not considered the applicability of above ground and dismissed the appeal. d. The appellant craves leave to add, alter or delete all or any of the grounds.” I.T.A. No.: 367/KOL/2025 Assessment Year: 2021-22 Mondal Education Trust.
Brief facts of the case are that the assessee is a Trust and had filed its return of income for the on 09.12.2021 showing total income of ₹2,31,667/-. The Trust was registered on 18.05.2009 vide Registration No. APE01188 and eligible for exemption u/s 12A/12AA/10(23C)(vi). The income was assessed by the Ld. ADIT, CPC, Bengaluru u/s 143(1) of the Act on 26.10.2022 for the AY 2021-22. During the course of the assessment proceedings u/s 143(1) of the Act, the Assessing Officer (hereinafter referred to as Ld. 'AO') had disallowed exemption of ₹59,12,165/- on the ground that in the Schedule Part A General, details of registration or approval under Income Tax/details of Section 12AB Act or 10(23)(iv)/10(23)(v)/10(23)(vi)/10(23)(via) were not provided in the column "section under which registration is applied." The assessee has submitted that the Act has been amended from 01.06.2020 and all entities have to get new registration/approval u/s 12AB or 10(23)(iv)/10(23)(v)/10(23)(vi)/10(23)(via) of the Act to be eligible for exemption. Since in the assessee’s case, new registration/approval details were not available, the exemption claimed in Sl. No. 4i to 4viii in Schedule Part B - TI was not allowed by the Ld. AO, CPC. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who issued three notices for hearing but there was no response from the assessee to the notices issued. Accordingly, relying upon the judicial pronouncements in the cases of B.N. Bhattacharjee and Another (118 ITR 461) by Hon'ble Supreme Court and M/s. Chemipol vs. Union of India in Excise Appeal No. 62 of 2009 by Hon'ble Bombay High Court, the Ld. CIT(A) dismissed the appeal of the assessee by holding that the sec. 10(23C) approval had been granted to the appellant Trust from AY 2022-23. Since the present appeal was related to AY 2021-22 for which the appellant had no sec.10(23C) approval, the AO CPC was correct in I.T.A. No.: 367/KOL/2025 Assessment Year: 2021-22 Mondal Education Trust. disallowing the benefit claimed by the appellant. Hence, on this ground of merit too, the appeal was dismissed.
Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal.
Rival contentions were heard and the submissions made have been examined.
The Ld. AR submitted that Authorised Representative had not filed any response in connection with the appeal when opportunities were provided by sending notice u/s 250 of the Act to substantiate the grounds of appeal. The assessee fully relied upon the Authorised Representative and the assessee is not responsible for any negligence of the Authorised Representative. Therefore, the assessee urges that order passed by the Ld. ADDL/JCIT-4 Chennai, be set aside. The Ld. DR relied upon the order of the Ld. CIT(A) and requested that the same may be upheld.
We have considered the submissions made. Since there was no proper compliance before both the Ld. AO as well as before the Ld. CIT(A), in the interest of justice and fair play it was considered that the request of the assessee to set aside the case may be allowed so that a proper opportunity of being heard may be provided. After examining the facts of the case and the law, we deem it appropriate to set aside the order of the Ld. CIT(A) and restore the appeal back to the Ld. CIT(A) for disposal of the grounds of appeal taken by the assessee on merit by passing a speaking order as even though the Ld. CIT(A) has mentioned in para-4.6 that the approval under section 10(23C) has been granted to the trust from assessment year 2022–23 onwards and is not I.T.A. No.: 367/KOL/2025 Assessment Year: 2021-22 Mondal Education Trust. applicable for the assessment year 2021-22 and on this ground of merit too, the appeal is dismissed, however, he has merely confirmed the findings of the AO, CPC, as the assessee did not make any proper submission. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission it wants to make in support of its grounds of appeal and shall not seek unnecessary adjournments and rule 46A of the I.T. Rules, 1962 shall also be followed and an opportunity of being heard may be provided to the Ld. AO, if required. Accordingly, the grounds taken by the assessee in his appeal are partly allowed for statistical purposes.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 6th November, 2025. [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 06.11.2025 Bidhan (Sr. P.S.) I.T.A. No.: 367/KOL/2025 Assessment Year: 2021-22 Mondal Education Trust. Copy of the order forwarded to:
Mondal Education Trust, Uttarayan, Chinsurah, Station Road, Chinsurah, Hooghly, West Bengal, 712102. 2. DCIT, Circle 23(1), Hooghly.
CIT(A)-
CIT-
CIT(DR), Kolkata Benches, Kolkata.
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