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Facts
The assessee filed two appeals against orders rejecting their application for registration under Section 12AB and approval under Section 80G of the Income Tax Act, 1961. The rejection was primarily based on non-registration under the Rajasthan Public Trust Act, 1959, and non-genuineness of activities.
Held
The Tribunal held that the assessee's application for registration under Section 12AB was rejected by the CIT(E) without providing adequate opportunity. The Tribunal restored the matter to the CIT(E) for fresh adjudication, directing the assessee to furnish the RPT Act registration and details about the genuineness of activities.
Key Issues
Whether the CIT(E) erred in rejecting the application for registration u/s 12AB and approval u/s 80G on grounds of non-registration under RPT Act and non-genuineness of activities without affording adequate opportunity and proper verification.
Sections Cited
12AB, 80G, 12A, 10(23C)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES,”A” JAIPUR
ORDER PER: DR. S. SEETHALAKSHMI, J.M. These are two appeals filed by the assessee against two different orders of the Ld.CIT (Exemption), Jaipur both dated 18-12-2024 passed under section 12AB and 80G of the Income Tax Act, 1961 respectively. The grounds of appeal raised by the assessee in both the appeals are as under:-
2 ITA150 & 149/JPR/2025 SHREE PA DIGAMBER JAIN SAHITYA SHODH SANSTHAN, BHILWARA VS CIT (E), JAIPUR U/s 12AA of I.T. Act, 1961 “1. Rejection application for registration u/s 12AB of the Income Tax Act, 1961 for the reasons (a) non registration under Rajasthan Public Trust Act, 1959, (b) Non-genuinenes of activities. 2. Not regularization of provisional registration dated 24-09-2021 as granted u/s 12A(1)(ac)(vi) of Income Tax Act, 1961 and lapsing the same.
Rejecting provisional registration granted u/s 80G(5)(iv) dated 24-09-2021 and not regularizing the same (considering lapsed and cancelled).’’ 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:- ‘’(Page 19)- Hence from the above, it is clear that the activities are not verifiable and it could not be determined whether the applicant is genuinely carrying out charitable activity and it cannot be ascertained that activities are as per objects. Therefore, the applicant claim of registration u/s 12AB is also liable to be rejected on ground of not proving its genuineness of activity.
In view of above discussion applicant’s application for registration u/s 12AB is liable to be rejected and thus being rejected on following grounds:- Non-registration under Rajasthan Public Trust Act, 1959. Non-genuineness of activities.
3 ITA150 & 149/JPR/2025 SHREE PA DIGAMBER JAIN SAHITYA SHODH SANSTHAN, BHILWARA VS CIT (E), JAIPUR 06. Further 12AB (1)(b)(ii) (B) of the Income Tax Act, 1961 also state that if CIT is not satisfied has to pass order rejecting such application and also cancelling its earlier registration. Thus, it is clarified that applicant's provisional registration under clause (vi) of clause (ac) of sub-section (1) of section 12A of the Income Tax Act, 1961 dated 24.09.2021 is also being cancelled. Further assessee has failed to give proper justification for regularization of provisional registration, thus with this order provisional registration is also lapsed and cancelled.’’ 2.2 Apropos to the ground so raised by the assessee in the ld. CIT(E) rejected the assessee’s claim of exemption u/s 80G of the Act by observing as under:- 02. Approval u/s 80G cannot be granted without registration u/s 12AB. 2.1 As per rule 11AA of the Income Tax Rules, 1962, the registration u/s 12A/12AB or notification u/s 10(23C) is a precondition for granting approval u/s 80G of the I.T. Act, 1961. Vide this office order No. ITBA/EXM/F/EXM45/2024- 25/1071342099(1) dated 18-12-2024 the application of the applicant regarding approval u/s 12AB was rejected. Also during the present proceedings, the applicant has also failed to furnish any replies, thus genuineness of activities and all the above issues remains same. Thus, genuineness of activities and all the issues remain same. Thus, the claim of the applicant u/s 80G is liable to be rejected on this issue on following grounds:-
Non Registration under Rajasthan Public Trust Act, 1959 Non Genuineness of activities. In view of the above discussion, the application in Form No. 10AB seeking exemption u/s 80G 4 ITA150 & 149/JPR/2025 SHREE PA DIGAMBER JAIN SAHITYA SHODH SANSTHAN, BHILWARA VS CIT (E), JAIPUR
03. In view of above discussion assessee’s claim of approval u/s 80G is liable to be rejected and thus being rejected on following grounds:-
Approval u/s 80G cannot be granted without registration u/s 12AB
04. Further 2nd Proviso to 80G(5) also states that if CIT is not satisfied has to pass order rejecting such application and also cancelling its earlier registration. Thus, it is clarified that applicant’s provisional approval under clause (iv) of first proviso to Sub-Section (5) of Section 80G of the Income Tax Act, 1961 dated 24-09-2021 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 both the appeals mainly submitted that the assessee was not provided adequate opportunity of being heard by the ld. CIT(E) and thus both the orders should be quashed being against the principles of natural justice. Further, the ld. AR of the assessee stated that the assessee trust is in the process of applying the registration under RPT Act, 1959 before the competent authority and it is likely to get the same and also the same would be produced as and when granted. It is submitted by the ld. AR of the assessee that without verifying the details, documents, evidences, the ld. CIT(E) has in a routine manner rejected the approval of registration of trust u/s 12AB of the Act. To support his contentions, the ld. of the assessee has filed the following documents.
5 ITA150 & 149/JPR/2025 SHREE PA DIGAMBER JAIN SAHITYA SHODH SANSTHAN, BHILWARA VS CIT (E), JAIPUR S.N. Particulars Page 1. Written submission Containing 12 pages 2. Copy of Trust Deed 1 to 13 3. Copy of provisional Registration u/s 12A(b)/80G 14 to 17 4. Copy of Gazette Notification for registration with 18 to 19 RPT 1959 4. Copy of ITAT Order Raipur Bench in 401/RPR/2024 – Dawoodi Bohra Jamaat Trust, Raipur vs CIR(E) It is also noted that the ld.AR of the assessee relied upon decision of ITAT Raipur Benches mentioned hereinabove on the similar issue praying therein that its case may also be set aside to the ld. CIT(E) for statistical purposes by giving one more opportunity to settle the dispute in question. The relevant para of decision of ITAT Raipur Bench order in – Dawoodi Bohra Jamaat Trust, Raipur vs CIR(E) is reproduced as under:- ‘’10, In terms of the aforesaid observations, respectfully following analogy of law drawn from the order of Hon’ble Jurisdictional High Cour tin the case of Shaheed Nand Kumar Patel Vishwavidyalaya (supra) and order of ITAT in the case of Koi Apna Sa Ho Society (supra), in absence of any contrary decision, fact, or submission by the revenue, we find it appropriate to restore the issue to the file of ld. CIT(E), with the directions to re-visit the application of the assessee and dispose of the same under express finding qua the objects and activities of the trust in deciding the eligibility of the assessee trust for grant of registration u/s 12AB of the Act.
Needless to say, reasonable opportunity of being heard and liberty to furnish necessary information / explanations / documents / evidence shall be afforded to the assessee in the set aside proceedings.
The assessee is also directed to assist in the proceedings before the Ld. CIT(E) to furnish all the information necessary so as to satisfy the approving authority about the objects of the trust and the genuineness of its activities as contemplated in subclause (A) & compliances of requirements as per sub-clause (B) of clause (i) of 6 ITA150 & 149/JPR/2025 SHREE PA DIGAMBER JAIN SAHITYA SHODH SANSTHAN, BHILWARA VS CIT (E), JAIPUR subsection (1) of section 12AB, failing which the Ld. CIT(E) would be at liberty to decide on the application in form No. 10AB for grant of registration u/s 12AB in accordance with law.
In the result, the present appeal of the assessee is partly allowed, in terms of our observations hereinabove.’’ 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 an application for registration u/s 12AB of the Act was rejected by the ld CIT(E) on the ground that the assessee is not registered under RPT Act, 1959 and in this regard, the ld. AR of the assessee stated that the assessee trust is in the process of applying the same before the competent authority and it is likely to get the same. 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 then the application of the assessee trust for registration u/s 12AB of the Act be decided afresh in accordance with law. The assessee is also required to submit the documents relating to genuineness of the activities and also Registration Certificate from Devsthan Vibhag, Ajmer under Rajasthan Public Trust Act, 1959 with a view to resolving the dispute in question. 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 7 ITA150 & 149/JPR/2025 SHREE PA DIGAMBER JAIN SAHITYA SHODH SANSTHAN, BHILWARA VS CIT (E), JAIPUR 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 any reflection or expression on the merits of the dispute, which shall be adjudicated by the ld. CIT(E) independently in accordance with law.
3.0 In the result, both the appeals of the assessee are allowed for statistical purposes. Order pronounced in the open court on 17 /04/2025.
Sd/- Sd/- ¼jkBkSM+ deys'k t;UrHkkbZ ½ ¼MkWa-,l-lhrky{eh½ (RATHOD KAMLESH JAYANTBHAI) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;dlnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 17/04/2025 *Mishra आदेश की प्रतिलिपिअग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू The Appellant- Shree PA Digamber Jain Sahitya Shodh Sansthan, Bhilwara 1. 2. izR;FkhZ@ The Respondent- CIT(E), Jaipur. 3. vk;djvk;qDr@ The ld CIT 4. विभागीय प्रतिनिधि] आयकरअपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZQkbZy@ Guard File & 149/JPR/2024) vkns'kkuqlkj@ By order,
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