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Facts
The assessee, a Trust, applied for registration under Section 12A(1)(ac)(iii) and approval under Section 80G(5)(iii) of the Income Tax Act, 1961. The Ld. CIT(E) rejected the applications, citing the assessee's failure to furnish requisite details/explanations, establish genuineness of its activities, and questioned an incurred 'Religious Expenditure' of Rs. 5,00,000/-.
Held
The Income Tax Appellate Tribunal remanded both appeals back to the Ld. CIT(E) for fresh consideration, directing that the assessee be given an opportunity to present all necessary submissions and explanations before a new order is passed. Both appeals were allowed for statistical purposes.
Key Issues
Whether the Ld. CIT(E) was justified in rejecting the Trust's applications for registration under Section 12A(1)(ac)(iii) and approval under Section 80G(5)(iii) due to alleged failure to furnish details and establish genuineness of activities and expenses.
Sections Cited
12A(1)(ac)(iii), 80G(5)(iii)
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Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD
Before: DR. B.R.R. KUMAR, VICE-Ms SUCHITRA KAMBLE
PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-
These two appeals have been filed by the assessee against the separate orders passed by the Ld. Commissioner of Income Tax (Exemption), Ahmedabad, both dated 27.12.2024. Since the issues raised in these appeals are interconnected, we consider it appropriate to reproduce the grounds of appeal in for the purpose of adjudication.
-420/Ahd/2025 Dadaji Farming and Self Employment Charitable Trust Vs.CIT(E) Asst. Year : N.A - 2– ITA No.419/Ahd/2025
The assessee has raised the following grounds of appeal:
“…Ld. CIT(E) erred on facts as also in law in by not granting registration under section 12A(1)(ac)(iii) of the Income-tax Act, 1961 by stating that the appellant trust has incurred 'Religious Expenditure' of Rs. 5,00,000/- without considering the fact that contribution of Rs. 5,00,000/- has been given for charitable purpose only and not for religious purpose. The order of Ld.CIT(E) is baseless and totally unwarranted under the circumstances and facts of the appellant's case and deserves to be quashed and therefore may kindly be quashed…”
The facts of the case are that the assessee is a Trust and had applied for registration under Form No.10AB under the provisions of the Act. The Ld. CIT(E) rejected the application for registration u/s.12A(1)(ac)(iii) of the Income Tax Act, 1961, on the ground that the assessee-trust failed to furnish the requisite details/explanation and to establish the genuineness of its activities.
Aggrieved by the order of the Ld. CIT(E), the Assessee filed appeal before the Tribunal.
At the outset, we find that notices were issued from time to time to furnish details/documents as called for. The Ld. CIT(E) rejected the application of the assessee on the ground that that the assessee-trust failed to furnish substantial documents. Therefore, the Ld. Counsel prayed that given an opportunity, the same would be apprised to the Ld. CIT(E). Ld. CIT(DR) argued that the assessee-trust needs to furnish requisite details/explanations and submissions before the Ld. CIT(E).
-420/Ahd/2025 Dadaji Farming and Self Employment Charitable Trust Vs.CIT(E) Asst. Year : N.A - 3– Having considered the facts on record, we hold that interests of justice would be well served by remanding the matter to the Ld. CIT(E) for consideration of the application afresh and to pass an order by taking into consideration the submissions /explanations submitted by the assessee.
Since we have remanded the issue to the Ld. CIT(A) in regarding the rejection of application u/s.12A(1)(ac)(iii) of the Act, we also set-aside the issue for approval of registration u/s.80G(5)(iii) of the Act in for fresh adjudication.
In the result, both the appeals of the assessee are allowed for statistical purposes.
The order is pronounced in the open Court on 04.09.2025.
Sd/- Sd/- (SUCHITRA KAMBLE) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT (True Copy) Ahmedabad; Dated 04.09.2025 MV -420/Ahd/2025 Dadaji Farming and Self Employment Charitable Trust Vs.CIT(E) Asst. Year : N.A - 4– आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file.