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Facts
The appellant trust filed an application for registration under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961. The CIT(E) rejected the application and cancelled the provisional registration, holding that the trust was for the benefit of a specific community and not for the general public.
Held
The Tribunal found that while some objects were specific, the CIT(E) had not gone through the financials to ascertain the trust's activities. Therefore, the matter was remanded back to the CIT(E) for verification of financials and proper adjudication.
Key Issues
Whether the CIT(E) erred in cancelling the provisional registration without proper verification of the trust's activities and financials, and whether the trust's objects and activities are for the general public or a specific community.
Sections Cited
12A(1)(ac)(iii), 12AB(4)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH
Before: Ms. Suchitra Kamble & Shri Makarand V. MahadeokarShri Mewad
आदेश/ORDER Per Suchitra Kamble, Judicial Member:
This is an appeal filed against the order dated 26-06- 2025 passed by CIT(Exemption), Ahmedabad.
The grounds of appeal are as under:-
1. “1. The Comm. Of Income-tax (Exemption) has erred both in Law and in Fact in cancelling the provisional of Registration granted in Form u/s.12A(1)(ac)(iii) on the fallacious Grounds that the Appellant is for member/family of Mewad Maheswari Samaj community as held by him in para 7.3 of the Order.
Shri Mewad Maheswari Samaj Tower (Baroda) 2. The Comm. Of Income-tax (Exemption) has erred in coming to the conclusion that your Appellant has failed to prove with corroborative evidence that he has not incurred any expenditure beyond the members and money is spent only for Mewad Maheswari Samaj community.
Your Appellant also submits that Appellant after giving necessary submission and explanation the Comm. Of Income-tax (Exemption) has failed to issue Show Cause Notice in support of contention raised by the Appellant in support of it not being engaged in a particular community as alleged.
A perusal of the Trust shows beyond doubt that the Trust is firm for General Public Community at large and is engaged in social Medical, educational activities for all without cast or creed and it is not solely and exclusively for the community of Mewad Maheswari Samaj community has alleged by the Commissioner of Income-tax (Exemption).
5. In view of facts of the case and principle of Law as well as keeping in mind the various activities undertaken by the Trust. The Appellant ought to have been granted approval in Form 12AA Trust Registration certificate.
It is therefore submitted that relief claimed above be allowed and the order of the Assessing Officer be modified accordingly.
Your Appellant reserves right to add, alter, amend to withdraw any or all Grounds of Appeal.”
3. The applicant/appellant trust filed application in Form No. 10AB on 19.10.2024 for registration of the Trust under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961. Due to the clerical error in Form No. 10AB, and to comply as per Circular No. 7 of 2024 issued by CBDT dated 25.04.2024, the applicant/appellant subsequently filed on 19.10.2024 i.e. after notification of the Finance Act, 2024 which came into effect on 01.10.2024. The CIT(E) rejected the application and also cancelled the provisional registration 2 Shri Mewad Maheswari Samaj Tower (Baroda) on the ground that the object of the assessee are not as per the scheme of provisions provided under Income Tax Act, 1961 granting of registration in this case will lead to specified violation under clause (d) below explanation to Section 12AB(4) of Income Tax Act, 1961. The CIT(E) held that on combined reading of the objects of the applicant/appellant and as per definition of ‘Membership’ it is evident that the trust is created by and for the benefit of the members/families of ‘Mewad Maheshwari Samaj/Community’ and not for the benefit of public at large.
4. Being aggrieved by the order dated 26.06.2025 passed by the CIT(E), the applicant/appellant filed present appeal.
The Ld. AR submitted that the applicant/appellant trust has been established with the intent to serve the public at large, without any bias based on caste or community. The Ld. AR also pointed the main object at the time of hearing from the Trust Deed. Besides that the Ld. AR submitted that the CIT(E) has not given any opportunity of hearing to the applicant/appellant before rejecting the application of the appellant trust. Therefore, the Ld. AR submitted that the matter may be remanded back to the file of the CIT(E) for proper adjudication on merits.
The Ld. DR relied upon the order of the CIT(E) and submitted that the trust is for only one community and not for general public.
Shri Mewad Maheswari Samaj Tower (Baroda) 7. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the object clause shown by the Ld. AR clearly set out that out of fourteen objects only four objects are for specific community and besides that CIT(E) has not gone through the financials which can set out that the applicant/appellant trust is working only for one particular community and not for general public as well as the applicant/appellant trust is not for charity purpose. Therefore, it will appropriate to remand this matter to the file of the CIT(E) and directed to verify the financials of the applicant/appellant trust as given under the provisions of Income Tax Act and thereafter adjudicate the same as per law. Needless to say, the applicant/appellant be given opportunity of hearing by following principles of natural justice. The appeal of the applicant/appellant is partly allowed for statistical purpose.
In result, appeal of the applicant/appellant is partly allowed for statistical purpose.
Order pronounced in the open court on 17-10-2025 Sd/- Sd/- (Makarand V. Mahadeokar) (Suchitra Kamble) Accountant Member Judicial Member Ahmedabad : Dated 17/10/2025 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 4 Shri Mewad Maheswari Samaj Tower (Baroda) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद