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Facts
The appellant trust applied for registration under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961. The CIT(E) rejected the application due to delay in filing and its objects being confined to a particular caste, not for the general public. The provisional registration was also cancelled.
Held
The Tribunal held that the CIT(E) did not verify the financials of the trust and did not properly adjudicate the aspect of its objects relating to charity to the general public. The Tribunal also noted that the applicant was not given an opportunity of hearing.
Key Issues
Whether the CIT(E) erred in rejecting the registration application and cancelling provisional registration without proper verification and hearing; and if the trust's objects were for the general public.
Sections Cited
12A(1)(ac)(iii), 12A, 115TD, 17CB, 10AB, 10AC
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH
Before: Ms. Suchitra Kamble & Shri Makarand V. MahadeokarShri Dasha Khadayata
आदेश/ORDER Per Suchitra Kamble, Judicial Member:
This is an appeal filed against the order dated 28-06- 2025 passed by CIT(Exemption), Ahmedabad.
The grounds of appeal
are as under:-
1. 1. That the Learned Commissioner of Income Tax (Exemption), Ahmedabad, has erred in law and facts by rejecting the application in Form No 10AB under section 12A(1)(ac)(iii) of the Income Tax Act 1961 for the Registration under section 12A of the Act and further cancelling of provisional registration granted under Form 10AC dated 23- 09-2021 Your Honors are requested to direct the Commissioner of Income Tax (Exemption) to grant registration under section 12A of the Act and the provisional registration shall not be cancelled.
Shri Dasha Khadayata Vanik Panch Savli 2. That the Learned Commissioner of Income Tax (Exemption), Ahmedabad has erred in law and facts by giving direction that applicant should compute its tax liability under section 115TD of Income Tax Act, 1961 read with Rule 17CB of IT Rules and report the same in return of Income and also pay the tax so computed within timeline provided under section 115TD(5) of Income Tax Act, 1961. The said direction is required to quashed. That the appellant craves leave to add, amend or withdraw any ground of appeal before or during the hearing.”
3. The applicant/appellant filed application for registration in Form 10AB on 05.12.2024 seeking regular registration under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961. The CIT(E) issued notices seeking information and documents which were responded by the applicant/appellant vide letters dated 11.03.2025 and 26.03.2025. Only final show cause notice dated 12.06.2025 was not responded by the Managing Trustee who was handling the matter personally as he went abroad to visit his family. The CIT(E) rejected the application vide order dated 28.06.2025 for the reasons of delay in filing Form 10AB beyond the time prescribed under Section 12A(1)(ac)(iii) and the objects were confined to particular caste viz, Dasha Khadayata Vanik Panch holding that the trust is not for the benefit of the general public.
Being aggrieved by the order dated 28.06.2025 passed by the CIT(E), the applicant/appellant filed the present appeal.
Shri Dasha Khadayata Vanik Panch Savli 5. The Ld. AR submitted that the application in Form 10AB was filed after the due date and the extended timeline under CBDT Circular No. 7 of 2024 dated 25.04.2024, which allowed filing up to 30.06.2024. Thus, delay was purely procedural and unintentional. The trust was having valid provisional registration in Form 10AC up to A.Y. 2024- 25 and there was no lapse of charitable purpose. As relates to the objects, the Ld. AR submitted that the objects of the trust, though making reference to “Dasha Khadayata Vanik Panch” are not confined to that community only but open to all beneficiaries, irrespective of caste, or religion who meet the criteria for aid under its charitable activities. 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.
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 gone through the financials of the the applicant/appellant trust as well as the aspect of the objects related to charity to the general public. Therefore, it will appropriate to remand this matter to the file of the Shri Dasha Khadayata Vanik Panch Savli 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) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद