21 GAM CHAROTAR KADVA PATIDAR SAMAJ,ANAND vs. THE DY.CIT, CIRCLE-2(EXEMPTION), AHMEDABAD

Before us, the Counsel for the assessee submitted that the assessee/applicant trust has not been formed the benefit of any particular religious community, and accordingly the application for grant of approval has been rejected by CIT(Exemptions) on an incorrect appreciation of facts of the assessee’s case. Further, the counsel for the assessee placed reliance on several judicial precedents which have held that where the objects of the assessee/applicant trust are both religious and charitable (to public at large) in nature, it could not be denied registration under section 12AB by invoking the provisions of section 13(1)(b) of the Act. The Counsel for 21 Gam Charotar Kadva Patidar Samaj (Trust) vs. DCIT(E) Asst.Year –N.A. - 4– the assessee also placed reliance on judicial precedents which have held that provisions of section 13(1)(b) of the Act could be attracted only at the time of assessment and not at the time of grant of registration under section 12A(1) of the Act.

On going to the facts of the instant case, we observe that at the time of hearing before CIT(Exemptions), despite issuance of notices of hearing, none appeared on behalf of the assessee/applicant trust. Before us, the counsel for the assessee submitted that the application for grant of approval under section 12AB has been rejected by CIT(Exemptions), without giving adequate opportunity of hearing and without appreciating the facts of the assessee/applicant trust’s case, wherein on going through the objects, it would be evident that the activities of the assessee/applicant trust are of a charitable nature and not aimed for benefit of any particular community. Further, it was submitted before us that CIT(Exemptions) in his order rejecting grant of approval has itself noted specifically that from the reading of the “objects” of the trust, it is evident that the trust has been formed for charitable purposes, though its activities are restricted for the benefit of a particular religious community. Accordingly, looking into the instant facts and in the interest of justice, the matter is hereby restored to the file of CIT(Exemptions) for de novo consideration, after giving due opportunity of assessee/applicant trust to file response to specific queries raised by Ld. CIT (Exemptions) regarding the “objects” of the trust and their applicability to a particular community. However, we make it clear that in case there is any further non-compliance by the assessee/applicant 21 Gam Charotar Kadva Patidar Samaj (Trust) vs. DCIT(E) Asst.Year –N.A. - 5– trust in response to notices issued by CIT(Exemptions), then he would be at liberty to pass appropriate order is in accordance with law, on the basis of material available on record.

In the result, the appeal of the assessee/applicant trust is allowed for statistical purposes. This Order pronounced in Open Court on 26/05/2025