RAM NIWAS MODI CHARITABLE SOCIETY,JAIPUR vs. CIT-EXEMPTION, JAIPUR, JAIPUR

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"clean_text": "आयकर अपीलीय अधिकरण, जयपुर न्यायपीठ, जयपुर\nIN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A” JAIPUR\nडा० एस. सीतालक्ष्मी, न्यायिक सदस्य एवं श्री राठोड कमलेश जयन्तभाई, लेखा सदस्य के समक्ष\nBEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI,\nआयकर अपीलसं. / ITA No.118 & 779/JPR/2025\nRam Niwas Modi Charitable Vs. The CIT(E),\nSociety, Jaipur.\n152, Modi House, Gumanpura,\nKota.\nस्थायीलेखा सं. / जीआईआर सं. / PAN/GIR No.: AAATR8150J\nअपीलार्थी / Appellant प्रत्यर्थी / Respondent\nनिर्धारिती की ओरसे / Assesseeby : Shri Mahendra Gargieya, Adv. &\nShri Devang Gargieya, Adv.\nराजस्व की ओरसे / Revenue by: Mrs. Anita Rinesh, Ld. JCIT\nसुनवाई की तारीख / Date of Hearing : 23/09/2025\nउदघोषणा की तारीख / Date of Pronouncement: 20/11/2025\nआदेश/ORDER\nPER: RATHOD KAMLESH JAYANTBHAI, AM\nThe present two appeals filed by assessee, are arising out of the\norder of the learned Commissioner of Income Tax (Exemptions), Jaipur\nboth dated 31.12.2024 & 03.04.2025 [ for short “CIT(E)”] passed for\nregistration u/s 80G of the Income Tax Act [ for short Act ] respectively by\nthe assessee - appellant.\n2\nITA No. 118 & 779/JPR/2025\nRam Niwas Modi Charitable Society, Kota.\n2.1 In ITA No.118/JPR/2025, the assessee has raised following grounds:-\n“1. The impugned order dated 31.12.2024 of the Act is non-est, bad in law and\non facts of the case, for want of juri iction and various other reasons and hence,\nthe same kindly be quashed.\n2. The Id. CIT(E) seriously erred in denying the registration u/s 12AB and also\ncancelling the provisional registration and hence the registration so denied/\ncancelled may be restored and the appellant be held entitled to continue with the\nregistration u/s 12AB of the Act.\n3. The Ld. CIT(E) erred in law as well as on the facts of the case in rejecting the\napplication for granting the approval u/s 80G. The rejection so made and\nexemption so denied u/s 80G is totally contrary to the provisions of law and on\nfacts of the case on various grounds and hence the same may kindly be\nquashed.\n4. Alternatively, and without prejudice, the Id. CIT(E) further erred in law as well\nas on the facts of the case in not adjudicating the application filed on dated\n26.06.2024 seeking approval u/s 80G without adjudicating and deciding the\nsame. The absence of any order denying any such approval sought u/s 80G may\nbe declared as granted to the appellant.\n5. Alternatively and without prejudice, the impugned order dated 31.12.2024\nhaving being issued beyond the statutory period of six months as per the\nprovisions of the Act. Hence the same may kindly be quashed.\n6. The appellant prays your honour to add, amend or alter any of the grounds of\nthe appeal on or before the date of hearing.”\n2.2 In ITA No.779/JPR/2025, the assessee has raised following grounds:-\n\"1. The impugned order dated 03.04.2025 (read with earlier order 31.12.2024) of\nCIT(E) Jaipur u/s 80G(5) of the Act is bad in law and on facts of the case, for\nwant of juri iction, barred by limitation and various other reasons and hence,\nthe same kindly be quashed.\n2. The Ld. CIT(E) erred in law as well as on the facts of the case in cancelling\nprovisional approval granted earlier u/s 80G of the Act vide order dated\n3\nITA No. 118 & 779/JPR/2025\nRam Niwas Modi Charitable Society, Kota.\n10.03.2023 being totally contrary to the provisions of law and on facts of the case\non various grounds and hence the same may kindly be quashed.\n3. Alternatively, and without prejudice, the Id. CIT(E) further erred in law as well\nas on the facts of the case in not adjudicating the application filed on dated\n26.06.2024 seeking permanent approval u/s 80G without adjudicating and\ndeciding the same. The absence of any order denying any such approval sought\nu/s 80G may be declared as granted to the appellant.\n4. The appellant prays your honour to add, amend or alter any of the grounds of\nthe appeal on or before the date of hearing.\"\n3.\nAs is evident from the grounds of appeal that the issue raised in both\nthe appeals are identical and of the same assessee. As we have heard\nthese cases together with the consent of the parties and have decided to\ndispose these appeals by this common order.\n4.\nWith the consent of the parties the facts of the case ITA No.\n118/JPR/2025is considered as lead case. The brief facts of the case in ITA\nNo. 118/JPR/2025, as culled out from the records are that the applicant\nfiled an online application in Form No. 10AB seeking approval u/s 80G of\nthe Act was filed on 26.06.2024. A letter/notice dated 15.07.2024 was\nissued at the e-mail/ address provided in the application requiring the\napplicant to submit certain documents/explanations by 01.08.2024, in\ncompliance to which the applicant requested to adjourn its case.\nThereafter, a reminder letter was issued to the applicant vide notice dated\n4\nITA No. 118 & 779/JPR/2025\nRam Niwas Modi Charitable Society, Kota.\n26.10.2024 to submit complete details/information by 05.11.2024. In\ncompliance to thereof, the applicant had submitted a reply on 04.11.2024\nwhich was thoroughly examined on record and found various\ndiscrepancies. These discrepancies were conveyed to the applicant vide\nshow cause notice dated 08.12.2024 wherein date of hearing was given\n12.12.2024. After giving notice, the applicant had submitted its reply on\n12.12.2024 which was not found tenable and thereby the application made\nby the assessee trust was rejected by giving following finding by the Id.\nCIT(E):-\n\"In response, the applicant has furnished reply on 12.12.2021 wherein submitted\nonly final a/c alongwith its financial notes and on the basis these replies/details\nfollowing issued emerged:-\n1. Not furnished details of expenses/activity, ledger accounts, bills/vouchers,\nphotos, beneficiaries details.\n2. Not furnished details of professional charges/salary as asked whether these\npersons are related persons of management of trust, in absence possibility of\nsiphoning off the funds.\n3. Not furnished bank transaction details above Rs. 20,000/- in order to verify\nthe nature of debit and credit entries in bank account statement, thus, the\nnature of entries in back account is unverified and activities do not seem\ngenuine.\n4. Not furnished comparison chart containing the details of fees/charges from\npatients by other similar institutions in the area.\n5. No other charitable activity is done apart from hospital/ pharma activities in\nlieu of huge fees/bill amount.\n6. 6. Not furnished details of land on which hospital building was constructed\nlike:- Land document, Bill vouchers etc.\nHence from the above it is clear that the activities are not verifiable and it could\nnot be determined whether the applicant is genuinely carrying out charitable\n5\nITA No. 118 & 779/JPR/2025\nRam Niwas Modi Charitable Society, Kota.\nactivity. Therefore, the applicant claim of registration u/s 12AB is also liable to be\nrejected on ground of not proving its genuineness of activity.\n04. In view of above discussion assessee's claim of registration section 12AB is\nliable to be rejected and thus being rejected on following grounds:-\n• Registration under Rajasthan Public Trust Act, 1959.\n• Benefited to interested persons.\n• Non-Genuineness of activities.\n• Profitability\n06. Further 12AB (1)(b)(ii)(B) of the Income Tax Act, 1961 also state that if CIT is not\nsatisfied has to pass order rejecting such application and also cancelling its earlier\nregistration. Thus, it is clarified that applicant's provisional registration under clause\n(vi) of clause (ac) of sub-section (1) of section 12A of the Income Tax Act, 1961\ndated 10.03.2022 is also being cancelled. Further assessee has failed to give proper\njustification for regularisation of provisional registration, thus with this order\nprovisional registration is also lapsed and cancelled.\"\nAgainst the above finding of the Id. CIT(E) the assessee has\npreferred the appeal No. ITA no. 118/JP/2025.\n5.\nAs is evident from para 6 of the finding of the Id. CIT(E) that the\nassessee filed an application for recognition u/s 80G of the Act but while\nconsidering the application he has considered that the application is for\nregistration u/s. 12AB of the Act. Having noted that fact Id. CIT(E) on\n03.04.2025 passed an another order revising the para 6 as under :-\n“Please refer to this office order. No. ITBA/COM/F/17/2024-25/1071735774(1)\ndated 31.12.2024 wherein in last para (no. 6) of the order, some typographical\nmistake was occurred. The last para (no. 6) of the said order may kindly be read\nas under:-\n\"06. Further 2nd proviso to section 80G(5) of the Income Tax Act, 1961\nalso state that if CIT is not satisfied has to pass order rejecting such\n6\nITA No. 118 & 779/JPR/2025\nRam Niwas Modi Charitable Society, Kota.\napplication and also cancelling its earlier approval. Thus, it is clarified that\napplicant's provisional approval under clause (iv) of first proviso to sub-\nsection (5) of section 80G of the Income Tax Act, 1961 dated 10.03.2022\nis also being cancelled. Further assessee has failed to give proper\njustification for regularization of provisional approval, thus with this order\nprovisional approval is also lapsed and cancelled.\"\nAgainst the above finding of the Id. CIT(E) the assessee preferred the\nappeal no. 779/JP/2025.\n6.\nThus, as is evident from the above finding of the Id. CIT(E) that\nthough the assessee has dealt with the recognition of the trust u/s. 80G of\nthe Act firstly he rejected the same considering as if the same is filed for\nregistration u/s. 12AB of the Act and thereafter, having released that\napparent error and another order was passed on 03.04.3035. Thus,\neffectively as is evident from the record the application for the recognition\nof the trust has not been dealt with and thereby the assessee has preferred\nthe two appeals effectively challenging the order of the Id. CIT(E) on the\nissue of recognition of the trust as per provision of section 80G of the Act.\n7.\nAt the time of hearing of the present appeals the Id. AR of the\nassessee referring to page 190 of the paper book drawn our attention to\nthe fact that the assessee is already registered vide order dated\n24.09.2021 for assessment year 2022-23 to 2026-27.The Id. AR of the\n7\nITA No. 118 & 779/JPR/2025\nRam Niwas Modi Charitable Society, Kota.\nassessee thereby filed a detailed written submission to support the grounds\nraised in the present appeals;\n“Brief General Facts: The Id. CIT (E) noted in the impugned order as under:\n“The applicant filed an online application in Form No. 10AB seeking approval u/s\n80G of the Income Tax Act, 1961 was filed on 26.06.2024. A letter/notice No.\nITBA/EXM/F/EXM43/2024-25/1066715571(1) dated 15.07.2024 was issued at\nthe email/ address provided in the application requiring the applicant to submit\ncertain documents/explanations by 01.08.2024, in compliance to which the\napplicant requested to adjourn its case. Thereafter, a reminder letter was issued\nto the applicant vide this office DIN & Notice No. ITBA/EXM/F/EXM43/2024-\n25/1069969799(1) dated 26.10.2024 to submit complete details/information by\n05.11.2024. In compliance to thereof, the applicant had submitted a reply on\n04.11.2024 which was thoroughly examined on record and found various\ndiscrepancies. These discrepancies were conveyed to the applicant vide show\ncause notice dated 08.12.2024 wherein date of hearing was given 12.12.2024.\nAfter giving notice, the applicant had submitted its reply on 12.12.2024 which\nwas not found tenable. Reply furnished by the assessee has been examined and\napplicant not found eligible for the desired registration.\"\nThereafter the Ld. CIT(E) continued to make discussion with reference to the application\nfiled u/s 80G(5) of the Act.Continuing with the above, in the concluding Para 6 again,\nthe Ld. CIT has cancelled the aforesaid Provisional Registration, also granted vide order\ndt. 10.03.2023 (PB-193). However, a perusal of the aforesaid order shows that it was an\norder granting Provisional Registration in Form 10AC under Rule 17A/11AA/2C, for the\nperiod from 10.03.2022 to 2024-25, granted under Section 80G(5) First Proviso\nclause(iv). Thus whereas, the appellant made an application before the CIT€ in Form\n10AB seeking conversion of Provisional registration into Final Registration under\nSection 80G, filed on 26.06.2024. However, in response, the Registration and the\nProvisional Registration u/s 12A and 12 AB, etc. were rejected.\nFinally, the Ld. CIT(E) rejected the prayer(seemingly) for approval u/s 80G(5) filed\nthrough FORM 10B but in the following words:\n“04. In view of above discussion assessee's claim of registration section 12AB is\nliable\nto be rejected and thus being rejected on following grounds:\n• Registration under Rajasthan Public Trust Act, 1959.\n• Benefited to interested persons.\n8\nITA No. 118 & 779/JPR/2025\nRam Niwas Modi Charitable Society, Kota.\n• Non-Genuineness of activities.\n• Profitability\n06. Further 12AB (1)(b)(ii)(B) of the Income Tax Act, 1961 also state that if CIT is\nnot satisfiedhas to pass order rejecting such application and also cancelling its\nearlier registration. Thus, it is clarified that applicant's provisional registration under\nclause (vi) of clause (ac) of sub-section (1) of section 12A of the Income Tax Act,\n1961 dated 10.03.2022 is also being cancelled. Further assessee has failed to give\nproper justification for regularisation of provisional registration, thus with this order\nprovisional registration is also lapsed and cancelled.”\nHence this Appeal.\nGOA 1:This is a general ground and may kindly be considered while deciding the other\ngrounds.\nComplete non-application of mind by the Ld. CIT(E):\nAt the outset there is no hesitation to say that there has been complete non-application\nof mind by the Ld. CIT(E)which is evident from the fact that firstly, the Ld. CIT(E) vide its\nearlier order of dt. 28.12.2024 which perhaps belong to some other assessee,\nwrongly/mistakenly passed the order in the case of the assessee and this fact he\nhimself has admitted in Pg.1 Para 1 in the impugned order in the following words:\n\"Please refer to this office order No.\nITBA/EXM/F/EXM45/2024-\n25/1071648752(1) dated 28.12.2024. You are requested to ignore the rejection\norder passed by this office, as there was some mistake & some other order was\npasted in your case.”\nThe registration granted u/s12AB(1)(b)(i) as also the provisional registration\nu/s12A(1)(ac)(vi), have been erroneously cancelled on misconception and showing\nexample of complete non-application of mind on the part of the Ld. CIT(E), as evident\nfrom his findings recorded on page 17 of the impugned order reproduced here in above\nthat the claim of registration u/s 12AB is also liable to be rejected on the ground of non-\nproviding of its genuine activities. However, he has completely ignored that the\nappellant trust was already granted permanent approval u/s s12A(1)(ac)(i) from AY-\n2022-23 to AY-2026-27 vide order for registration in form 10 dated 24.09.2021(PB 190-\n192). There being no obligation on the part of the appellant to apply for continuation of\nregistration at that point of time, such an observation by the Ld. CIT(E) is contrary to the\nfacts of law. Otherwise also, the Ld. CIT(E) has completely ignored the statutory\nrequirement mandated upon him u/s 12AB(4)(II) that before cancelling the registration\nthrough an order in writing, he was bound to have afforded an opportunity of being\n9\nITA No. 118 & 779/JPR/2025\nRam Niwas Modi Charitable Society, Kota.\nheard to the Appellants, which in this present case is completely missing in as much as\nno SCN u/s 12AB(4)(II) was given to the appellant and there is no dispute on this fact.\nThe way the Id. CIT(E) has created a chaos. He has acted in a perfunctory manner as\nevident from the fact that he has cancelled/denied the registration granted u/s 12AB has\nalso refused/cancelled provisional registration u/s 12A, which was not an issue before\nhim at all and on the other hand, he has left the approval sought under section 80G(5)\npending. The entire impugned order therefore deserves to be quashed on this ground\nalone.\nThe CIT(E) rejected the same on the grounds which are summarised herein below:\nA. Non-registration/non-compliance under Rajasthan Public Trust Act, 1959:\nB. Benefit given to interested person u/s 13(3):\nC. Profitability\nD. Non-Genuineness of Activities\nOur submission thereon proceeds hereinafter.\nGOA 2: Denial of registration u/s 12AB and cancellation of provisional registration:\nA. The Rajasthan Public Act – Not Applicable:\nFacts: The CIT(E) discussed this aspect at Pg.1-5 Para 2.1-2.5 and finally concluded\nas under:\n“In response, vide reply, the applicant stated that it has applied for RPT under\nDevasthanVibhag.\nThe above reply of the applicant that it has applied for the Devasthan\nDepartment is not tenable as till date they are not registered but only applied for\nthe same. Application to the concerned department is not enough proof whether\napplication has accepted and verified all the formalities at their end. Therefore, in\nview of the above, contention of the applicant is not tenable that they have\napplied for the registration under RPT Act, 1959. Thus, it is clear that as on date,\ntrust is not registered under Rajasthan Public Trust Act, 1959. Therefore, in light\nof above discussion and in the absence of registration under Rajasthan Public\nTrust Act, 1959, assessee is not eligible for registration u/s 12AB.”\nSubmission:\n10\nITA No. 118 & 779/JPR/2025\nRam Niwas Modi Charitable Society, Kota.\n1.1At the outset it is submitted that the provisions relating to registration under the RPT\nAct, appears to have been misinterpreted with reference to 80G(5)(i)(b), reproduced\nhere under:\n“(B) The compliance of such requirements of any other law for the time being in\nforce by the trust or institution as are material for the purpose of achieving its\nobjects;\"\nSimilar requirement appears under section 12AB(1)(b)(i)(B) also.\nThus, a bare reading of the provision make it obligatory on the part of the competent\nauthority to have shown that what were such other requirement of other laws (RPT\nhere) which was material, for the purpose of achieving its object. However, there is no\nwhisper on this mandatory condition, but the learned CIT(E) straight away alleged non-\ncompliance of RPT, simply because the appellant trust was not registered under RPT\nAct, without showing that how the registration was material for the purpose of achieving\nits object. The result of the object shows that (PB 16-30) There apart, the concerned\ncompetent authority under RPT Act, has not alleged any violation of non-compliance\nunder the respective provisions of RPT Act, nor it is so alleged by the CIT(E) here.\nTherefore, such allegation could not have been levelled blindly, and was not a good\nbasis for cancellation of registration.\n1.2The Hon'ble ITAT has recently in the case of APJ Abdul Kalam Education and\nWelfare Trust Vs CIT(E) vide ITA No. 567/JPR/2024 dated 06.01.2025 (DC 1-14),\nadjudicated upon similar issue whether a trust is mandatorily required to obtain\nregistration under the Rajasthan Public Trust Act, 1959 from the DevasthanVibhag for\nthe purpose of seeking registration u/s 12AA/12AB of the Income Tax Act. In this\nlandmark decision, the Hon'ble Tribunal has categorically held that the absence of such\nregistration does not render the application for registration untenable. The Hon'ble ITAT,\nhas held as under:\n“2. The assessee submitted before us the copy of application filed online before\nthe DevasthanVibhag, Rajasthan vides dated: 22.09.2024, as required by the\nLd. CIT (E), Jaipur. Although the requirement of obtaining registration with the\nDevasthanVibhag, Rajasthan as per the Rajasthan Public Trust Act, 1959 is\nreally required or not in the context of section 12AB (1) (b) (ii) (b) of the Act, is a\nmatter raised before us by the counsel of the assessee and certainly a question\nof law to be decided by us in the coming paras of this order considering the\nprovisions of section 12AB (1) (b) (ii) (B) of the Act, Judicial Pronouncements\nrelied upon by the Ld. CIT(E), Jaipur. For sake of clarity and ready reference we\n11\nITA No. 118 & 779/JPR/2025\nRam Niwas Modi Charitable Society, Kota.\nare reproducing herein below the relevant provisions of section 12AB of the Act\nas under:\nProcedure for fresh registration.\n12AB. (1) The Principal Commissioner or Commissioner, on receipt of an\napplication made under clause (ac) of sub-section (1) of section 12A, shall,\n(a) Where the application is made under sub-clause (i) of the said clause,\npass an order in writing registering the trust or institution for a period of five\nyears;\n(b)\nWhere the application is made under sub-clause (ii) or sub-clause (iii) or\nsub-clause (iv) or sub-clause (v) [or item (B) of sub-clause (vi)] of the said\nclause,\n(i) Call for such documents or information from the trust or institution or make\nsuch inquiries as he thinks necessary in order to satisfy him about—\n(A) The genuineness of activities of the trust or institution; and\n(B) the compliance of such requirements of any other law for the time being in\nforce by the trust or institution as are material for the purpose of achieving its\nobjects;\n(ii)\nafter satisfying himself about the objects of the trust or institution and the\ngenuniness of its activities under item (A) and compliance of the requirements\nunder item (B), of sub-clause (i),\n(A)\nPass an order in writing registering the trust or institution for a period of\nfive\nyears; or\n(B)\n(1)\nIf he is not so satisfied, pass an order in writing,\nin a case referred to in sub-clause (ii) or sub-clause (iii) or sub-clause (v)\nof clause (ac) of subsection (1) of section 12A rejecting such application and\nalso cancelling its registration;\n(II) In a case referred to in sub-clause (iv) or in item (B) of sub-clause (vi) of\nsub-section (1) of section 12A, rejecting such application, after affording a\nreasonable opportunity of being heard.\n4. The relevant provisions reproduced (supra) in bold and underlined, is an\nattempt by us to analyze the provision in proper perspective of Law in the light of\nJudicial Pronouncement of Hon'ble Apex Court, specifically the citations being\nrelied upon by the Ld. CIT (E), Jaipur, i.e. [2012] 20 taxmann.com 46 (A.P.)\nAurora Educational Society vs. CCIT, relevant paras are reproduced as under:\n“10. The scope and amplitude of section 10(23C) (vi) of the Income-tax Act, the\nprovisos there under and the rules and forms applicable thereto, which were the\n12\nITA No. 118 & 779/JPR/2025\nRam Niwas Modi Charitable Society, Kota.\nsubject-matter of examination in New Noble Educational Society vs. Chief CIT\n[2011] 334 ITR 303/201 Taxman 33/ 12 taxmann.com 267(AP) and in R. R. M.\nEducational Society vs. Chief CIT [2011] 339 ITR 323 (AP) can, conveniently,\nbe summarized as under:\n1.\nAs section 20A of the A. P. Education Act prohibits individuals from\nestablishing educational institutions, it is only societies/associations/ trusts\nwhich can establish educational institutions in the State of Andhra Pradesh.\n“19. On a conjoint reading of sub-sections (3) and (4) of section 8 of the A. P.\nSocieties Registration Act, 2001, it is only when the amendment to the objects\nof a society (educational agency) is intimated and the