THARWANI & GURNANI FOUNDATION,AJMER vs. CIT EXEMPTION, JAIPUR, JAIPUR

ORDER PER: DR. S. SEETHALAKSHMI, J.M. Both these appeals have been filed by the assessee against two different orders of the Ld.CIT (Exemption), Jaipur dated 03-12-2024 passed under section 12AB and 80G of the Income Tax Act, 1961 respectively. The grounds of appeal raised by the assessee in the above mentioned appeals are as under:-

2) It is further requested that the trust is a charitable trust established with the objective of welfare of general public, it provides all its charitable services for free of cost to the needy and underprivileged section of the society. There is no biasness in respect of any class, creed or status of person.

3) It is humbly requested that the trust maintain regular books of accounts and get them duly audited, it can be verified from income tax portal, where the financials and audit report of the assessee are uploaded. All the receipts of the trust are utilized for charitable purpose or for general public utility, it is clear from the financials that there are excess of expenses over income i.e. Deficit, from which it is evident that trust have no profit motive behind its functioning. The copies of last 2 years financials and audit report is enclosed.

4) It is humbly requested that trust is dedicated towards social welfare and all the expenditure is done for social welfare only, all the receipts which are incurred through donations are also utilized for the charitable objectives of trust only.

5) The assessee has applied for registration in the Devasthan Vibhag Rajasthan, Ajmer under Rajasthan Public Trust Act, 1959, and the registration under Devasthan Vibhag Rajasthan, Ajmer under Rajasthan Public Trust Act, 1959 is being granted to the assessee. The copy of registration is hereby enclosed.

6) It is humbly requested that the CIT Exemption has cancelled the provisional registration granted to the assessee under section 12(1)(ac)(vi), it is further requested that the cancellation of provisional registration was not correct. The cancellation of provisional registration is not just and fair as per law, as no opportunity of being heard was granted to the assessee before cancellation of provisional registration, this is a clear violation of principle of natural justice.

& 332/JP/2025 THARWANI & GURNANI FOUNDATION VS CIT (E), JAIPUR 7) It is humbly requested before your honour that the commissioner Exemption has wrongly rejected the registration granted under section 12(1) (ac)(vi) filled under section and it is further requested to kindly quash the order passed by CIT Exemption. 8) It is humbly requested that the assessee has already submitted all the requisite details that are required by Commissioner Exemption, but Commissioner has wrongly rejected the provisional registration, there by not considering the principle of natural justice which is an inherent right granted to the assessee by the law.’’ U/S 80G of I.T. Act, 1961 1) It is humbly requested that the trust was established by the trustees, which is dedicated towards the objective of social welfare, helping the needy, taking care of street animals, birds, etc. The copy of trust deed is enclosed.

2) It is further requested that the trust is a charitable trust established with the objective of welfare of general public, it provides all its charitable services for free of cost to the needy and underprivileged section of the society. There is no biasness in respect of any class, creed or status of person. 3) It is humbly requested that the trust maintain regular books of accounts and get them duly audited, it can be verified from income tax portal, where the financials and audit report of the assessee are uploaded. All the receipts of the trust are utilized for charitable purpose or for general public utility, it is clear from the financials that there are excess of expenses over income i.e. Deficit, from which it is evident that trust have no profit motive behind its functioning. The copies of last 2 years financials and audit report is enclosed. 4) It is humbly requested that trust is dedicated towards social welfare and all the expenditure is done for social welfare only, all the receipts which are incurred through donations are also utilized for the charitable objectives of trust only. 5) It is humbly requested that the assessee received all its donation via online mode only, through Form 1080, which can be verified from the income tax portal and with the copies of financials, it is evident that the assessee has utilizes all its & 332/JP/2025 THARWANI & GURNANI FOUNDATION VS CIT (E), JAIPUR donation receipts for the charitable and social welfare purposes only. Even in the first year of operation all the funds utilized in respect of charitable purposes are done out of own pockets of trustees.

6) The assessee has applied for registration in the Devasthan Vibhag Rajasthan, Ajmer under Rajasthan Public Trust Act, 1959, and the registration under Devasthan Vibhag Rajasthan, Ajmer under Rajasthan Public Trust Act, 1959 is being granted to the assessee. The copy of registration is hereby enclosed. 7) It is humbly requested that the CIT Exemption has cancelled the provisional registration granted to the assessee under section 80G(5)(iv), it is further requested that the cancellation of provisional registration was not correct. The cancellation of provisional registration is not just and fair as per law, as no opportunity of being heard was granted to the assessee before cancellation of provisional registration, this is a clear violation of principle of natural justice. 8) It is humbly requested before your honour that the commissioner Exemption has wrongly rejected the registration granted under section 80G(5)(iv) filled under section and it is further requested to kindly quash the order passed by CIT Exemption. 9) It is humbly requested that the assessee has already submitted all the requisite details that are required by Commissioner Exemption, but Commissioner has wrongly rejected the provisional registration, there by not considering the principle of natural justice which is an inherent right granted to the assessee by the law. 10) It is requested that assessee has always being co-operative and has done all the compliances but still honourable commissioner exemption has wrongly cancelled the provisional registration.’’ 2.1 Apropos to the ground so raised by the assessee in the ld. CIT(E) rejected the assessee’s claim of registration u/s 12AB of the Act by observing as under:-

& 332/JP/2025 THARWANI & GURNANI FOUNDATION VS CIT (E), JAIPUR ‘’02. Further, the applicant had requested for withdrawing the above application through ITBA portal dated 14.11.2024 for registration u/s 12AB stating as under:- ……."It is humbly requested to your honour that the trust is engaged in the charitable activities and actively dedicated toward the objective of social welfare, general public utility, helping needy and backward classes. But. presently due to some inevitable reasons we are unable to arrange all the requisite documents as required by your honour and besides that the sister and new born premature nephew of our authorized representative are in ICU. Therefore, it would not be possible for us to submit all the requisite documents as required by your honour sir. Therefore, we would like to withdraw the application and will resubmit the application as soon as we gather all the requisite documents"

3. Accordingly, the applicant's application for registration u/s 12AB, applied u/s 12A(1)(ac)(iii) is hereby rejected treated as withdrawn.

& 332/JP/2025 THARWANI & GURNANI FOUNDATION VS CIT (E), JAIPUR ‘’02. In compliance to the above notice, the applicant has requested to withdraw its application through ITBA portal dated 14.11.2024 for approval u/s 80G of the Income Tax Act, 1961 which is stated as under- ……."It is humbly requested to your honour that the trust is engaged in the charitable activities and actively dedicated toward the objective of social welfare, general public utility, helping needy and backward classes. But presently due to some inevitable reasons we are unable to arrange all the requisite documents as required by your honour and besides that the sister and new born premature nephew of our authorized representative are in ICU Therefore, it would not be possible for us to submit all the requisite documents as required by your honour sir. Therefore, we would like to withdraw the application and will resubmit the application as soon as we gather all the requisite documents.

4. Further 2nd proviso to 80G(5) also state that if CIT is not satisfied has to pass order rejecting such application and also cancelling its earlier approval. Thus, it is clarified that applicant provisional approval under clause (iv) of first proviso to sub- section (5) of section 80G of the Income Tax Act, 1961 dated 03.08.2022 is also being cancelled. Further assessee has failed to give proper justification for regularization of provisional approval, thus with this order provisional approval is also lapsed and cancelled.’’ 2.3 During the course of hearing, the ld. AR of the assessee in the above appeals mainly submitted that the assessee was not provided adequate opportunity of being heard by the ld. CIT(E) and thus the orders should be quashed being ex- parte orders and against the principles of natural justice. Further, the ld.AR of the & 332/JP/2025 THARWANI & GURNANI FOUNDATION VS CIT (E), JAIPUR assessee has filed the certificate issued by the Office of Assistant Commissioner, Devsthan Vibhag, Ajmer on 5-02-2025 under RPT Act, 1959. . Conclusively, the ld AR of the assessee prayed that the assessee trust may be provided one more opportunity to the contest the case before the ld CIT(E) and restore the appeals to the file of ld CIT(E) for afresh adjudication as the assessee was ex-parte before the ld. CIT(E). It is also pertinent to mention that the ld. AR of the assessee to support his case has filed the following documents before the Bench. S.N. Particulars Description Pages 1. Submission before ITAT Submission 1-4 2. Trust Deed Exhibit-A E-1 to E-20 3. Registration Certificate under Devasthan Exhibit-B E-21 to E-21 Vibhag 4. Provisional Registration Certificate u/s Exhibit-C E-22 to E-23 80G(5)(iv) 5. Receipts of Form 10BE Exhibit-D E-24 to E-25 6. Duly Audited financials Exhibit-E E-26 to E-37 7. Copy of Bank statements Exhibit-F E-38 to E-41 8. Donation receipts to other institutions with the Exhibit-G E-42 to E-45 same object 9. Photographs of the Charitable Activities Other E-46-E54 supporting documents 2.4. Per contra, the ld. DR relied on the orders of the ld. CIT(E). 2.5 After hearing both parties and perusing the materials available on record, we noticed that the ld. CIT(E) has rejected the assessee’s claim of registration u/s 12AB of the Act. It is also noticed that the ld.CIT(E) has & 332/JP/2025 THARWANI & GURNANI FOUNDATION VS CIT (E), JAIPUR cancelled the provisional registration of the assessee for the reason that the assessee trust had failed to give proper justification for regularization of provisional registration. The prayer of the ld.AR of the assessee was that the assessee may be provided one more chance to adduce the documents before the ld. CIT(E) to resolve the issue in question and the assessee trust has been granted the Registration by the Devsthan Vibhag, Ajmer under RPT Act, 1959, Therefore, in these circumstances, we restore the matter back to the file of the ld. CIT(E) with the direction that as and when the assessee trust produces the copy of the Registration under RPT Act, 1959 and other documents required by him then the application of the assessee trust for registration u/s 12AB of the Act be decided afresh in accordance with law. The assessee trust is also directed to produce the complete Form 10AB and produce the documents relating to the genuineness of the activities etc. before the ld CIT(E) 2.6 Since we have restored the appeal of the assessee with regard to the registration u/s 12AB of the Act to the file of the ld. CIT(E) for afresh adjudication, therefore, the outcome of appeal of the assessee u/s 80G of the Act is consequential in nature. 2.7 Before parting, we may make it clear that our decision to restore the matter back (supra) to the file of the ld. CIT(E) shall in no way be construed as having & 332/JP/2025 THARWANI & GURNANI FOUNDATION VS CIT (E), JAIPUR any reflection or expression on the merits of the dispute, which shall be adjudicated by the ld. CIT(E) independently in accordance with law.