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Facts
The Assessee filed an application for registration of trust under section 12A(1)(ac) of the Income Tax Act, 1961. The Commissioner of Income Tax (Exemption) rejected the application on the grounds that it was not filed within the extended time limit and that the trust's objects were restricted to benefiting a particular community. The Assessee contended that the application was filed within the permissible time and that its income is applied for the benefit of all communities.
Held
The Tribunal noted that the provisions of Section 13 of the Income Tax Act can only be invoked at the stage of assessment and not at the stage of registration. Relying on a Gujarat High Court decision, the Tribunal held that the rejection of the application solely on the ground of the trust's objects being restricted to a particular community, without considering the stage of assessment, was erroneous. The Tribunal also observed that the applicant had provided evidence of income being applied for the benefit of all communities.
Key Issues
Whether the CIT(E) erred in rejecting the trust's application for registration on the grounds of being time-barred and for restricting benefits to a specific community, when Section 13 is applicable only at the assessment stage?
Sections Cited
12A(1)(ac), 12AB, 13
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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: DR. ARJUN LAL SAINI & SHRI DINESH MOHAN SINHA
आयकर अपीलीय अिधकरण, राजकोट �ायपीठ, राजकोट। IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER & SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकर अपील सं./ITA No.138/RJT/2025 (�नधा�रण वष� / Assessment Year: (2022-23) Shri Leuva Patel Kelavani Mandal Vs. CIT(Exemption), Room No.609, 6th Floor, Aayakar 01, Shri Leuva Patel Kelavni, Jetpur (Guj) -360370, Bhavan, Nr. Sachin Tower, 100ft Road, Anandnagar-Prahladnagar Road, Ahmedabad-380015 �थायीलेखासं./जीआइआरसं./PAN/GIR No.: AANTS5027Q (Appellant) (Respondent) Appellant by : Shri Sumit Shingala, Ld. AR Respondent by : Shri Sanjay Punglia, Ld. CIT(DR) : 08/10/2025 Date of Hearing Date of Pronouncement : 04/11/2025 आदेश / O R D E R Per, Dinesh Mohan Sinha, JM:
This appeal is filed by the Assessee as against the Rejection order dated 28.12.2024 passed by the Commissioner of Income Tax (Exemption), Ahmedabad denying Registration under section 12A(1)(ac) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
(ITA 2. Grounds of appeal raised by the assessee, are as follows: 1) The CIT(exemption) has erred in law as well as in facts, in rejecting the application for registration of the trust u/s. 12AB r.w.s. 12A; and in appreciating the facts and circumstances of the case.
ITA No. 138/RJT/2025 Shri Leuva Patel Kelavani Mandal
Brief facts of the case that the application for registration of trust or approval in Form 10AB on 27.06.2024, u/s. 12(1)(ac)(iii) of the Act. The provisional approval as per Form 10AC dated 30.03.2022.
Upon perusal of the application filed by the applicant in FORM 10AB, the applicant was requested to submit certain details/documents vide notice dated 18.12.2023. In response to the said notice, the applicant has submitted reply on 26.02.2024 along-with certain details. After verifying such details/ documents it was observed that the present application has not been filed within the extended time limit i.e. on or before 30.09.2023. Accordingly, the applicant vide notice date 05.04.2024 was requested to show cause as to why the present application shall not be treated as non-maintainable without going in to merit of case. In response to the show-cause notice dated 05.04.2024 the assessee has filed its submission on 22.04.2024, it should be allowed time till 29.10.2023 to file form 10AB (i.e. 6 month from the expiry of A.Y. 2024-25 i.e up to which provisional registration is granted). This is not the correct position of law as has been discussed earlier in the order of Ld.CIT(E). The applicant, vide its response dated 26.02.2024, has submitted that the date of commencement of its activities is 23.03.1972 and therefore, the applicant was required to file the present application in Form 10AB on or before 30.09.2023 which they fail to do so. As, the present application in Form No.10AB u/s 12A(1)(ac) (iii) of the Act has not been filed within extended date and therefore, the same is liable to be rejected as such as non-maintainable.
That the assessee has challenge the legality and validity of impugned order dated 23.12.2024 of the Ld. CIT(E) by filing the appeal before us.
During the course of hearing, Ld. AR submitted that trust is a charitable trust. There is no object to violate under clause (d) of section 12AB(1) of the Page 2 of 5
ITA No. 138/RJT/2025 Shri Leuva Patel Kelavani Mandal
Income Tax Act. The Ld. AR further submitted synopsis during the course of hearing, which was mentioned below; “1) The order impugned is of rejection of application for registration u/s. 12A, for specific violation of clause (d) of Explanation to Sec. 12AB(4) being: "applied any part of its income for the benefit of any particular religious community or caste" 2) The facts of the present case and issue involved are directly covered by recent decision of Hon'ble Guj. HC in case of Commissioner of Income-tax (Exemption) vs. Bhojaram Leuva Patel Seva Samaj Trust [2025] 178 taxmann.com 572 (Gujarat)[08-09-2025], in favour of assessee (Copy enclosed) Gist: Section 12A, read with section 13, of the Income-tax Act, 1961 - Charitable or religious trust-Registration of (Denial of registration) - Assessee trust filed an application for grant of registration under section 12AB - Commissioner (Exemption) rejected same on ground that objects of trust were restricted to benefit of a particular religious community or caste, i.e., 'Leuva Patel' community - Tribunal held that provisions of section 13 could be invoked only at time of assessment and not at time of grant of registration and, thus, remanded matter back to Commissioner (Exemption) for reconsideration - Whether, on facts, Tribunal had not committed any error in remanding matter back to Commissioner (Exemption) for reconsideration - Held, yes [Para 6] [In favour of assessee] 3) The ld. CIT(E) has missed to appraise that the appellant has not restricted application of its income for the benefit of any particular religious community or caste. On the contrary the same is applied for benefit of all communities at large. 4) The primary and main source of income of the trust is Rent from letting out building (being Hall fit for gatherings and small functions). (Audited Income & Expenditure A/cs. Submitted are kept at +Pg No. 89, 98, and 104). The application of income is in form of Salary Exp., Electricity Exp., Property Taxes, Exp. for Maintenance of Building, and Administrative Exp. Like Stationery, accounting, etc. (Annexure to Audited A/cs. Submitted are kept at Pg No. 93 and 101 The appellant furnished the copies of Receipts showing the building let to the persons Of all communities: Sr. Caste/Community (Surname) Mode of Page No.+ Payment 1. Aahir Community (Dabhi) Cash 174 2. Brahmin Community (Pandya, Shilu, Cheque and 175,181,192,201 Bhatt, Vyas) Cash 3. Rabari Community Cash 176 4. Jain Vanik Community (Mehta, Cheque 177,178,186,187,194 Rupda, Parekh) 5. Kathi-Darbar Community (Basiya) Cheque 115,179 6. Khatri Community (Jagad) Cheque 180 Page 3 of 5
ITA No. 138/RJT/2025 Shri Leuva Patel Kelavani Mandal
Trade Associations (Jetpur Dying & Cheque 182,183,193,197,200 Printing Association, JCI Jetpur Trust) 8. Muslim Community (Rizvaan Suthar, Cheque 184,196,198 Mahida, Gheewala) 9. Gurjar Suthar Community (Mistry) Cheque 185 10. Swaminarayan Cheque 188 Community/Institution (Sahjanand Sanskar Dham) 11. Sindhi Community (Zulelal Temple, Cheque 189,191 Sarangani) 12. Ramanandi Bawaji Community Banking 190 (Ramanuj) Channel 13. Leuva Patel (Poshiya, Vaishnav, Cheque 195,199 Pipaliya, Khunt) 14. Caste/Community (Surname) Cheque 116,117,118,119 6) Thus, there is omission to take note of and give consideration to the contention and supporting evidences submitted, that appellant's income is applied for the benefit of all communities at large, instead of being confined just to Leuva Patel Community. 7) In view of the above, the appellant's application for grant of registration ought to have succeeded before CIT(E), and not be rejected. We pray to delete the order of rejection, and grant registration, since the only ground on which application is rejected is erroneous on facts as well as in law. In case, your honours deem it fit to send the matter back to the file of Id. CIT(E), then we further pray for a direction, if your honours deem so fit, that the matter be disposed off within such time line as this court deems fit in the facts and circumstances of the case, and oblige us.” 7. On the contrary, the Ld. DR for the revenue relied on the order of the Ld. CIT(E).
We have heard both the parties and perused the material available on record, and also perused the synopsis and paper-book submitted during the course of hearing. We have gone through the synopsis, and we note the detailed income is from salary exp., Electricity exp., Property taxes for maintenance of Building and Administrative exp., like Stationary, accounting, etc., all expenses were submitted and also in the donation receipt in all communities. We further note that provision of sec. 13 to be invoked only at the time of assessment and not at the time of registration, this has been observed by High Page 4 of 5
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Court of Gujarat in case of CIT(E) v. Bhojaram Leuva Patel Seva Samaj Trust [2025] 178 taxmann.com 572, are held that; “Where assessee-trust filed application for registration u/s. 12AB and Commissioner (Exemption) rejected same on ground that objects of trust were confined to benefit of a particular community, since provisions of section 13 could be invoked only at stage of assessment and not at stage of registration, Tribunal had not committed any error in remaining matter to Commissioner (Exemption) for reconsideration.” 9. We are of the view to accept the request of the assessee, we remit the matter back to the file of the Ld.CIT(E) with the direction to the assessee to submitted all required documents as required by the Ld.CIT(E), therefore, due opportunity should be given to the assessee to explain the case before the Ld.CIT(E). That the said application for registration of trust is disposed off, accordance with law.
In the result, the appeal of the assessee is allowed, for statistical purposes.
Order pronounced in the open court on 04/11/2025.
Sd/- Sd/- (Dr. Arjun Lal Saini) (Dinesh Mohan Sinha) Accountant Member Judicial Member Rajkot �दनांक/ Date: 04/11/2025 Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr. CIT 5. DR/AR, ITAT, Rajkot 6. Guard File
By Order Assistant Registrar/Sr. PS/PS ITAT, Rajkot
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