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Facts
The assessee filed an application for registration under section 12AB of the Income Tax Act. The CIT(E) rejected the application and cancelled provisional registration, stating the trust's objects were confined to a particular community. The assessee contested this, arguing the trust benefits are open to all needy individuals.
Held
The Tribunal held that the CIT(E) had not considered all submitted details and had not provided an opportunity for a hearing. Therefore, the matter was remanded back to the CIT(E) for fresh adjudication after verifying the details and providing a hearing.
Key Issues
Whether the rejection of the registration application was justified due to the alleged confinement of trust objects to a specific community, and whether the order was procedurally flawed due to lack of digital signature and hearing.
Sections Cited
12AB(1)(ac)(iii), 12AB(4), 282A, 12A(1)(ac)(iii)
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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
आदेश/O R D E R आदेश आदेश आदेश PERSUCHITRA KAMBLE, JM:
1. This appeal has been preferred by the assessee against the order passed by the Commissioner of Income-tax (Exemptions), Ahmedabad [hereinafter referred to as “CIT(Exemption)”], dated 26.12.2024whereby the learned CIT(Exemption) rejected the assessee’s application filed in Form No. 10AB under section 12AB(1)(ac)(iii) of the Income-Tax Act, 1961 [hereinafter referred to as “the Act”] for grant of registration under section 12AB and also cancelled the provisional registration earlier granted to the assessee under the said provision.
The ground raised by the assessee in appeal reads as under:
That on facts, and in law, the impugned rejection order passed u/s.12AB(4) of the Act is bad in law and without jurisdiction in as much as the same having been issued without any digital signature as is evident from the rejection order as uploaded by the Ld. ClT(Exemptions), Ahmedabad on the ITBA portal. That since the said order and communication having not been passed in conformity with the provisions laid down u/s. 282A of the Income Tax Act, 1961 and Rule 127A of the Income Tax Rules, 1962, renders the rejection order legally untenable under the law and deserves to be quashed as null and void on this ground itself.
2. That on facts, and in law, the learned CIT (Exemptions), Ahmedabad has grievously erred in rejecting the application for registration u/s.12A(l)(ac)(iii) of the Act on the ground that the objectives of the appellant trust are restricted to the benefit of a particular community, despite the trust's activities being open to the general public, including underprivileged and needy individuals, irrespective of caste, creed, or religion.
3. That the Ld. CIT (Exemption) erred in rejecting the appellant's application on the grounds of Explanation (d) to Section 12AB(4), without properly considering the facts and evidence submitted regarding the scope of the trust's beneficiaries and hence ought to have allowed the application for approval filed by the appellant on merits.
The applicant/appellant filed application for registration of the trust u/s 12AB of the Income Tax Act, 1961. The applicant/appellant was granted provisional approval as per Form 10AC on 22.06.2022 from A.Y. 2023-24.The CIT(E) rejected the application vide order dated 26.12.2024 for the reason that the objects were confined to particular community/caste viz, DashaModhSajanGnati holding that the trust is not for the benefit of the general public.
Being aggrieved by the order of the CIT(E), the applicant/appellant filed the present appeal.
The Ld. AR submitted that vide reply dated 18.12.2024 the applicant mentioned clearly that the trust is created for uplifting of poor families/underprivileged persons of the village mention in the trust deed the benefit is not restricted to member of the trust but it is open to all needy, underprivileged family persons. Trust is providing Education, Medical and also provide relief in the form of monitory help to poor, widow women’s and also provide monitory help at the time of death of any members of poor/underprivileged families for the help trust is created various specific fund such as Medical Help Fund, Education/Higher Education Fund, Death Benevolent Fund, Group Insurance Fund, Aarthik Sahay Fund and provide all types of helps to members as well as other poor/underprivileged families. The Ld. AR also relied upon the decision of the Tribunal in case of Leuva Patidar Samaj Seva Trust vs. CIT(E) (ITA No. 1082/Ahd/2024 order dated 06.06.2025) and the decision of the Hon’ble Supreme Court in case of Ahmedabad Rana Caste Association vs. CIT 82 ITR 704 (SC).
The Ld. DR relied upon the order of the CIT(E).
We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the CIT(E) has not considered all the details of the applicant/appellant which was filed during the application in Form No.10AB and also not given opportunity of hearing to the applicant /Appellant, therefore, it will be appropriate to remand back this matter to the file of the CIT(E) for verifying the details filed by the applicant/appellant and decide/adjudicate the matter a fresh on merit and as per Income Tax Statute. Needless to say, the applicant be given opportunity of hearing by following principles of natural justice. Thus, the appeal of the applicant/appellant is partly allowed for statistical purpose.
In the result, the appeal of the applicant/appellantis partly allowed for statistical purpose.
Order pronounced in the Court on 17th November, 2025 at Ahmedabad.