GURU BRAHMAN SAMAJ VIKAS TRUST VAV THARAD SUIGAM,BANASKANTHA vs. THE CIT(EXEMPTION), AHMEDABAD

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ITA 452/AHD/2025Status: DisposedITAT Ahmedabad20 May 2025Bench: SMT. ANNAPURNA GUPTA (Accountant Member), MS. SUCHITRA KAMBLE (Judicial Member)1 pages
AI SummaryRemanded

What did the Tribunal hold?

The Income Tax Appellate Tribunal (ITAT) found that the CIT(E)'s denial of registration was based on an incorrect assumption that no details were furnished. However, acknowledging the necessity for the CIT(E) to be satisfied with the genuineness of activities, the ITAT restored both the Section 12A registration and Section 80G(5) approval issues back to the file of the CIT(E) for reconsideration. The CIT(E) was directed to pass a fresh order after due verification of all facts.

What were the facts?

The assessee, Guru Brahman Samaj Vikas Trust, filed appeals against the Ld. Commissioner of Income Tax (Exemption)'s orders denying registration under Section 12A and approval under Section 80G(5) of the Income Tax Act. The CIT(E) rejected the applications, citing the assessee's alleged failure to substantiate the genuineness of its activities and non-submission of details sought in a final notice. The assessee contended that all relevant facts were submitted in response to earlier notices and highlighted that the trust was newly incorporated with minimal income from donations and bank charges.

What were the issues?

Whether the denial of Section 12A registration and Section 80G(5) approval by the CIT(E) was justified when the assessee claimed to have furnished all required details, thus warranting a remand for fresh consideration.

Which sections of the Income-tax Act were involved?

Section 12A,Section 12AB,Section 80G(5)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD

Before: SMT. ANNAPURNA GUPTA & MS. SUCHITRA KAMBLE

For Appellant: Shri Mehul Thakkar, A.R
For Respondent: Shri Alpesh Parmar, CIT-DR
Pronounced: 20.05.2025

O R D E R PER ANNAPURNA GUPTA - AM: Both appeals related to the same assessee and are against orders passed by the Ld. Commissioner of Income Tax (Exemption), Ahmedabad (in short “Ld. CIT(E)”), denying grant of registration under Section 12A of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and denying approval under Section 80G(5) of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) dated 18.12.2024.

2.

The orders of the authorities below reveal that the assessee was denied registration under Section 12A of the Act and consequently in the absence of any registration available with the assessee under Section 12A of the Act his application for approval under Section 80G(5) of the Act was also rejected,since &453/Ahd/2025 Guru Brahman Samaj Vikas Trust Vav Tharad Suigam vs. CIT(E) Asst.Year –N.A. - 2 - the registration of the assessee under Section 12A of the Act was a mandatory condition for grant of approval under Section 80G(5) of the Act.

3.

We shall first therefore deal with the appeal of the assessee against the denial of registration under Section 12A of the Act in ITA No. 452/Ahd/2025

The assessee has raised the following grounds of appeal are as under: 4.

1.

1. “1. The CIT (Exemptions), Ahmedabad, erred in rejecting the appellant’s application for registration under Section 12Ab on the ground that the appellant failed to substantiate the genuineness of its activities, despite the fact that all relevant documents were already submitted. The rejection is based on the non-submission of details sought in the final notice dated 05.12.2024, whereas the appellant had already submitted a detailed response on 20.11.2024, which sufficiently covered the required information.

2. Without prejudice to above and in the interest of natural justice, the CIT (Exemptions) may please be directed to grant one more opportunity to produce the details sought in the notice dated 05.12.2024.

3. The appellant craves leave to add, alter or delete any ground either before or in the course of hearing of the appeal.”

5.

The order of the Ld. CIT(E) reveals that the registration was denied by him for the reason that the assessee had failed to file requisite details to satisfy him about the genuineness of the activities of the trust. The Ld. CIT(E) has specifically noted that the assessee had failed to furnish details regarding the activities being undertaken by it, verification of which was necessary to establish the genuineness of the activities of the trust so as to grant registration under Section 12A of the Act. The Ld. Counsel for the assessee though admitted that out of the three notices issued to the assessee 03.10.2024, 05.11.2024 and 05.12.2024 ,the assessee did not respond to the notice dated 05.12.2024, however, he pointed out that in his response to the earlier two notices the assessee had brought on record clearly all facts relating to the activities of the trust pointing out that the trust had been recently incorporated on 02.08.2023 &453/Ahd/2025 Guru Brahman Samaj Vikas Trust Vav Tharad Suigam vs. CIT(E) Asst.Year –N.A. - 3 - and the only income earned by it was donation of Rs. 1,31,000/- and the only expenditure incurred by it was in relation to bank charges of Rs. 763.80/-. He drew our attention to the letter filed by the assessee to Ld. CIT(E) dated 2.11.2024 bringing out the above facts. He, therefore, contended that the Ld. CIT(E) was wrong in stating that the assessee had failed to submit details of activities carried out by it and therefore, he stated his order refusing grant of registration to the assessee under Section 12A of the Act was incorrect.

6.

The Ld. D.R. though supported the order of the Ld. CIT(E), however, he was unable to counter the factual contention of the Ld. Counsel for the assesee that all facts regarding the activities of the assessee trust were furnished to the Ld. CIT(E) which he could have fairly examined for the purposes of grant of registration to the assessee trust.

7.

In light of the above since it is evident and clear that the Ld. CIT(E) has denied grant of registration to the assessee trust on an incorrect assumption of fact, that no details of activities carried out by the trust were furnished by the assessee, when evidently the assessee had furnished all such details, the order passed by the Ld. CIT(E) denying grant of registration to the assessee under Section 12A of the Act is not sustainable. However, noting that the Ld. CIT(E) needs to be satisfied regarding the genuineness of the activities carried out by the trust before granting registration, we consider it fit to direct the Ld. CIT(E) to reconsider the application of the assessee and after due verification of all facts pass an appropriate order in accordance with law.

8.

In the result, the appeal of the assessee, therefore, stands allowed for statistical purposes. &453/Ahd/2025 Guru Brahman Samaj Vikas Trust Vav Tharad Suigam vs. CIT(E) Asst.Year –N.A. - 4 - 9. We shall now take up assessee’s appeal in The assessee has raised the following grounds of appeal: 10.

“1. The Ld. CIT-Exemption, Ahmedabad has erred in law in rejecting the application for registration of the trust u/s 80G(5)(iv) of the Income Tax Act on the ground that appellant does not have any valid order for registration u/s. 12A / 12AB of the Income Tax Act either in form No.10AD or in Form No. 10AC.

2. The appellant craves leave to add, alter or delete any ground either before or in the course of hearing of the appeal.” 11 The assessee has been denied approval under Section 80G(5) of the Act since its application for grant of registration under Section 12A of the Act was rejected . The assesses appeal against rejection of registration u/s 12A of the Act has been decided by us above in wherein we have restored the issue back to the file of the Ld.CIT ( E) for reconsideration and the issue of approval u/s 80G of the Act being intricately linked to the subsistence of registration u/s 12A of the Act, the present appeal is also restored back to the file of the Ld. CIT(E) to be decided alongwith assessee’s application under Section 12A of the Act.

12.

In effect, both the appeals of the assessee stand allowed for statistical purposes.

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