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Facts
Clean & Green Charitable Trust applied for registration under Section 12A(1)(ac)(iii) of the Income Tax Act, but the CIT(E) rejected it. The CIT(E) found the trust's activities (waste management) inconsistent with its stated objects and noted a lack of supporting evidence, directing the trust to calculate tax liability under Section 115TD.
Held
The Tribunal remanded the case back to the CIT(E) for proper verification of the amended objects submitted by the appellant as additional evidence. The CIT(E) is directed to adjudicate the issues on merit, ensuring the appellant is granted an opportunity of hearing based on the principles of natural justice.
Key Issues
The key issue was the justification for the CIT(E)'s rejection of the trust's application for registration under Section 12A(1)(ac)(iii) and whether newly submitted amended objects should be considered during the registration process.
Sections Cited
12A(1)(ac)(iii), 12AB, 12(1)(ac)(iv), 115TD, 17CB
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Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH
Before: Ms. Suchitra Kamble & Shri Narendra Prasad Sinha
आदेश/ORDER
Per Suchitra Kamble, Judicial Member:
This is an appeal filed against the order dated 29-09- 2024 passed by CIT(Exemption), Ahmedabad for assessment year N.A.
The grounds of appeal
are as under:-
1. That on facts, and in law, the learned CIT (Exemption) Ahmedabad has grievously erred in not granting sufficient and reasonable opportunity of hearing to the appellant.
Clean & Green Charitable Trust, A.Y. N.A. 2. That on facts, and in law, the learned CIT(Exemption) Ahmedabad has grievously erred in rejecting the application for registration u/s 12A (1) (ac) (iii) of the Act as the commissioner is not satisfied 3. Your appellant craves leave to add/alter or amend any of the grounds till the appeal is finally heard and decided.”
The application for registration of trust u/s. 12AB of the Income Tax Act, 1961 was filed by the appellant trust on 13-03- 2024 u/s. 12A(1)(ac)(iii) of the Act. The date for provision approval as per Form No. 10AC was 22-06-2022 u/s. 12(1)(ac)(iv). The appellant trust after receiving the notices dated 02-07-2024 and 05-08-2024 from the CIT(E), submitted the partial details vide reply dated 06-08-2024. The CIT(E) observed that the activities undertaken related to the privatization of waste management for Udvada Gram Panchayat for waste management and related expenditure recorded in the audit accounts are not in accordance with the object of the appellant trust. The CIT(E) once again issued show cause notice dated 21-08-2024 and the appellant rust submitted its reply on 24-08- 2024. After considering the appellant trust reply, the CIT(E) observed that the activities carried out by the appellant trust are not in line with any of the objects of the trust. The CIT(E) further observed that the appellant trust failed to file documentary evidences related to genuineness of the activities of the trust or institution and the activities of the trust or institution are not in consonance with the objects of the trust or institution. Thus, the CIT(E) rejected the application filed in Form 10AB u/s. 12A(1)(ac)(iii) of the Act and also cancelled the provisional registration. The CIT(E) also directed the appellant trust to compute tax liability u/s. 115TD of the Income Tax Act, 1961 r.w.s. 17CB of Income Tax Rules and report the same in return of income.
Clean & Green Charitable Trust, A.Y. N.A.
Being aggrieved by the order dated 29-09-2024 passed by the CIT(E), the appellant trust filed the present appeal.
Ground No. 1 is not pressed hence dismissed.
As relates to ground no. 2, the ld. A.R. submitted that the CIT(A) was not justified in rejecting the application for registration u/s. 12A(1)(ac)(iii) of the Act as the assessee has submitted the details. Further, the ld. A.R. submitted that the appellant trust has filed the additional/amended objects as an additional evidence before the Tribunal along with the letter of the appellant trust to the Charity Commissioner/public trust resolution of trustee, which should be taken into account by the CIT(E). Therefore, the ld. A.R. praying that the matter should be remanded back to the file of the CIT(E) after verifying the objects, adjudicate the same as per Income Tax Act.
The ld. D.R. relied upon the order of the CIT(E).
We have heard both the parties and perused all the relevant materials available on record. It is pertinent to note that the appellant trust filing the amended objects as an additional evidence before the Tribunal along with the letter to the Charity Commissioner, which needs to be verified. Hence, the matter is remanded back to the file of the CIT(E) for proper verification and adjudication of the issues on merit as per Income Tax Act. The appellant trust be given opportunity of hearing by following principles of natural justice.
Clean & Green Charitable Trust, A.Y. N.A. 9. In the result, the appeal of the assessee is partly allowed for statistical purposes.
Order pronounced in the open court on 16-05-2025 Sd/- Sd/- (Narendra Prasad Sinha) (Suchitra Kamble) Accountant Member Judicial Member Ahmedabad : Dated 16/05/2025 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