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Facts
The assessee, Amreli Modh Vanik Community Property, filed an application for registration under section 12A(1)(ac)(iii) of the Income-tax Act, 1961, and also for cancellation of provisional registration under Section 80G(5). The Ld. CIT(E) rejected the application, stating that the assessee failed to prove the genuineness of its activities and that the activities were not in consonance with the trust's objects.
Held
The Tribunal noted that the trust was established before 01.04.1961, making the provisions of Section 13(1)(b) of the Act not applicable. The Tribunal directed the Ld. CIT(E) to examine the Trust's Property Register (PTR), its objects, and other evidence to grant registration as per the Act.
Key Issues
Whether the CIT(E) erred in rejecting the assessee's application for registration and cancelling provisional registration, and whether Section 13(1)(b) is applicable to a trust established before 01.04.1962.
Sections Cited
12A(1)(ac)(iii), 80G(5), 12AA, 12AB(1), 13(1)(b), 11(5), 11, 12, 2(15)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: DR. ARJUN LAL SAINI & SHRI DINESH MOHAN SINHA
सुनवाई क� तार�ख /Date of Hearing : 31/07/2025 घोषणा क� तार�ख /Date of Pronouncement : 29/09/2025 आदेश / O R D E R Per, Dr. Arjun Lal Saini, Accountant Member: Captioned appeal filed by the assessee, is directed against the order passed by the Learned Principal Commissioner of Income-tax(Exemption), Ahmedabad [in short, ‘Ld.CIT(E)’] wherein Ld. CIT(E) has rejected the assessee’s application in Form 10AB under section 12A(1)(ac)(iii) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) and also cancelled the provisional registration Section 80G(5) of the Act.
Amreli Modh Vanik Community Property 2 2. The assessee has raised the following grounds of appeal:
1. The grounds of appeal mentioned hereunder are without prejudice to one another. 2.The order passed by the learned Commissioner of Income-tax (Exemption), Ahmedabad [hereinafter referred to as the “CIT(E)”] u/s 12AA of the Income Tax Act, 1961 is bad in law and on facts. 3.The learned CIT(E) erred on facts as also in law rejecting the application for registration u/ 12AA of the Act alleging that (i) the appellant failed to prove the genuineness of its activities with documentary evidence (ii) the activities of trust are in consonance with the objects of the trust and (iii) other laws material for the purpose of achieving objects are complied with. The learned CIT(E) may kindly be directed to grant registration u/s 12AA of the Act.
3. Brief facts qua the issue are that the assessee-trust had filed the application for registration u/s 12AB of the Act. The Ld.CIT(E) after referring the provisions of Section 12A(1)(ac)(iii) and Rule 17A(1) of the Income-tax Rules, 1962 for registration purpose, issued a show cause notice to the assessee. In the show cause notice, the Ld. CIT(E) explained the provisions of Section 12AB(1) of the Act and stated assessee-trust was established for the purpose of a particular community and caste, that is, “Amreli modh Vanik Community” and the applicant was requested to submit certain details/documents vide notice dated 09.11.2023 and 08.12.2023. In response to the said notices, the applicant has submitted certain details/documents on 20.01.2024. On perusal of the details/documents received, it was noticed by ld.PCIT that the activities carried out by the applicant-trust and the expenditure reported in the annual audited accounts are not in consonance with each other and objects/objectives of trust. Further, on perusal of objects/objectives of the applicant/assessee, as stipulated in the PTR, it was observed that the objectives/ objects of the applicant/assessee are for the benefit of a private religious community or caste i.e. “Amreli modh Vanik Community”. The applicant vide its response dated 20.01.2024 has submitted part details before ld CIT(E ). In view of the above, a show cause notice was issued to the applicant on 15.03.2024, which is reproduced below:
Amreli Modh Vanik Community Property 3 “Please refer to the online application, in Form No.10AB, filed by you are the subsequent questionnaires dated 09.11.2023 and 08.12.2023 issued to you. In the aforesaid notice/letter certain details/information/clarifications were sought for and in response to the same, you have submitted certain details vide your reply dated 20.01.2024 and did not furnish following details/documents as under:
1. 1. Details of top 5 items each, of donation received (giving name & address of donor, amount donated & mode of donation) and expenditure related to the specific object of the trust along with supporting evidence in preceding 3 years and current year.
2. Provide ledger account of all the Expenditure towards charitable and religious objects in preceding 3 years including current year (F.Y 2023-24) 2. Further on perusal of your point-wise reply dated 31.12.2023, you have submitted following details/reply in the first para as under: Activity report describing all the details is attached herewith for your ready reference. The trust is engaged into activities of organizing and running seminar for awareness and development of public in general for their economic growth, and providing them with basic necessities to become independent. However, on perusal of the PTR the object of the trust is “There is not trust for caste dinner”. Hence, from the above it is evident that the activities undertaken by you, which are charitable in nature, are not in accordance with the object of the trust. From the above, it is observed that the above referred object (as per PTR) appear to be charitable in nature and for the benefit of a particular religious community/caste i.e. “Amreli modh Vanik Community” and not for the benefit of public at large. Therefore, please clarify that as to how there is no contravention of provision of section 13(1)(b) of the Act.
3. Hence, you are requested to show cause as to why your application filed in Form 10AB u/s 12A(1)(ac)(iii) should not be rejected and also your provisional registration should not be cancelled for the reasons discussed in the notice. You are once again requested to submit the details/documents/clarification a sought above on or before 19.03.2024.
4. Further, you are requested to note that in case of non compliance/part compliance of said notice, the mater will be decided on the basis of facts/material available on record. “Please note that this is a final opportunity and no requests for adjournment will be entertained.”
Amreli Modh Vanik Community Property 4 4. In response to the above notice issued by Ld. CIT(E), the assessee submitted its reply before Ld.CIT(E) which is placed at paper book page No. 13, however, Ld. CIT(E) did not consider assessee`s reply and mentioned in his order that assessee-trust has never submitted any reply, however, reply was filed by the assessee- trust along with documentary evidences.
Finally, the Ld. CIT(E) rejected assessee’s application stating that applicant has not furnished any details/explanation in response to the notice dated 15.03.2024 and on perusal of the audited accounts for F.Y 2021-22, it is observed that the applicant has incurred expenditure towards Religious activity i.e. Patotsav and Baldevji utsav of Rs.56,294/-. The ld.CIT(E ) also noted that object stipulated in the PTR is not clear and no other object is mentioned in said PTR, so genuineness of objects as well as activities could not be ascertained due to ambiguous object of the Trust. In view of the above, the assessee`s application in Form No.10AB u/s 12A(1)(ac)(iii) of the Act was rejected by ld.CIT( E).
Aggrieved by the order of Ld. CIT(E), the assessee is in appeal before us.
Shri Mehul Ranpura, Learned Counsel for the assessee, took us through object clause of the assessee-trust, which is mentioned in the application in Form-10AB, which is placed in paper book pages 13 and 14. During the proceedings before Ld.CIT(E), assessee submitted detailed reply, point-wise which are reproduced below: Sr. Particulars Remarks No. 1 Submit a detailed note on the nature of activities Activity report describing all the details is attached undertaken in last 3 years and proposed to be herewith for your ready reference. undertaken in future (Not more than 500 words). You can also attach necessary evidence in your support, if The trust is engaged into activities of organizing and any. running seminar for awareness and development of public in general for their economic growth, and providing them with basic necessities to become independent. 2 State the date of commencement of your activities along The trust is registered on 17/03/1963, and since then the with evidence, if any trust is carrying on charitable activities according to the PTR.
3 Self-certified copy of trust deed/Memorandum & The PTR is itself in English which is attached herewith for Articles of Association(MoA/AoA) in English, if your ready reference. original trust deed is not in English. 4 Please furnish audit reports of last 3 years (F.Ys 2019- Audit reports of last 3 years are already attached with the 20, 2020-21 & 2021-22) and provisional accounts of application (AY 20-21, 21-22 & 22-23). Also audit report current year, if not already attached with Form-10AB for AY 2023-24 attached herewith. filed by you. 4A Furnish copy of Form No.9A, 10, 10B wherever Necessary documents have been filed in the Income Tax applicable during last 3 years. Portal 4B Furnish details of top 5 items each, of donation Details of donation received to carry out objectives as per received (giving name & address of donor, amount the deed is attached herewith. donated & mode of donation) and expenditure related to the specific object of the trust along with supporting evidence in preceding 3 yeas and current year. 5 Submit copy of all Form No.10AC issued to you. Copy of Form 10AC issued is attached herewith. 5A Has any registration been granted to you prior to No. prior to 0104.2021 there were no registrations 01.04.2021, if yes furnish copy of registration granted. certificate issued. 5B Has any certificate for registration granted to you No. The registration was never granted earlier to earlier been withdrawn/cancelled. If yes furnish details. 01.04.2021 5C Is there any modification of the objects in Trust deed No. There are no modification in the objects of the trust. after 01.04.2021/date of registration, whichever is later, if yes furnish details. 6 Specify the clause in Trust deed/MoA regarding All provisions of the Bombay Public Trust Act 1950 will irrevocability//distribution of funds/assets in the case of be applicable, and also separate undertaking of the same dissolution. In case there is no such clause explain why is attached herewith for your ready reference. your application should not be rejected 7 Furnish statements f all bank accounts held by you Copy of bank accounts is attached herewith for your ready along with bank book for the last two years reference 8 Have you made any violations of conditions specified No. No such violation of any kind has been made. under section 12AB(4) explanation, clause(a) to clause(e), 13(1) clause(a) to (c), 1st proviso to section 2(15) or any action has been taken in your case by the Department for any default under these provisions or any action has been taken for any other law in force. If yes, furnish necessary details. 9 Has any demand been raised by the Department in your No. There are no such instances. case in preceding 3 years, if yes, furnish the copy of order. 10 State as to whether the objects are for any particular Provisions of section 13(1)((b) will not be applicable due caste, creed and religious community. to the reasons and brief notes mentioned in Annexure A mentioned at the end of this reply. 11 Submit proof of identity of the main/managing Proof of all trustee’s and managing trustee is already Trustees/Directors/President/Secretary of the submitted along with the application. The same is also Trust/Society/Non Profit Company (as the case may attached herewith for your ready reference. be). 12 Has any action has been taken against any the There are no such instances w.r.t. antinational member/office bearer/trustee/beneficial activities/terrorist activities against trust or any of the owner/directors of entity for anti national trustees are noticed. Hence no such action has ever been activity/terrorist activities. If yes, furnish details. taken against any member/office bearer/beneficial owner/trustee 13 Provide ledger account of all the expenditure towards The ledger of the same is attached herewith for your ready charitable and religious objects in preceding 3 years reference. including current year 14 Please furnish lease agreement or any other document The property is duly registered in the PTR submitted and evidencing the existence of the trust at above stated light bill for the same is also attached herewith for your address. ready reference. 15 Furnish provide address of immovable properties held 241, Bus Stand Chowk, Talu9ka-Village-District Amreli by you. (cop of light bill is attached herewith for your ready reference. 16 Furnish undertakings in given pro forma as per Undertaking for sections 11(5), 11 AND 12, 2(15), and the Annexure-1. fact that all provisions of The Bombay Public Trust Act and the Income Tax Act applies to the Trust is attached herewith.
Amreli Modh Vanik Community Property 6 17 In case, trust/institution runs any Education No applicable. Institute/hospital/old age home/orphanage/centre for disabled/centre for women & children etc. the furnish permission/approval from concerned authorities for running the same.
The Ld. Counsel further submitted that trust under consideration was registered on 19.05.1952 with Charity Commissioner Bombay vide entry in PTR No.2791/52 dated 30.05.1953. Therefore, Ld. Counsel contended that since the trust was created before 01.04.1961, when the Income Tax Act, 1961 came into existence and assessee-trust was created prior to the Income Tax Act, 1961 therefore, the provision of Section 13(1)(b) of the Act, is not applicable to the assessee-trust. For that Ld. Counsel took us through the page-16 of paper book wherein registration certificate issued by Charity Commissioner Bombay is placed in the paper book pages 18, 19 and 22. The Ld. Counsel also submitted the undertaking made by the trustee, which is placed in the paper book. The Ld. Counsel also submitted the activities done by the assessee-trust is placed at pages 112, 132 of the paper book. The Ld. Counsel also submitted that based on the same objects and activities, the trust registration was granted earlier by the Ld.CIT(E), to the assessee-trust.
On the other hand, Ld. CIT-DR for the Revenue submitted that assessee has failed to prove the genuineness of the objects and activities. The activities caried on by the assessee are not in consonance with the objects of the trust. The objects of the trust has not been fled before Ld. CIT(E). Therefore issue should be remitted back to the file of Ld.CIT(E) to examine these facts.
In rejoinder, Ld. Counsel submitted that in PTR the objects are mentioned and the PTR was submitted before Ld.CIT(E). Therefore, registration should be granted.
Amreli Modh Vanik Community Property 7 11. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld PCIT and other materials brought on record. We note that application for registration of trust was made on 19.04.1952 by Mohanla Odhavji Parikh to Deputy Charity Commissioner-Ahmedabad region in prescribed format in Schedule 2G, as prescribed under the provisions of The Bombay Public Trust Act, 1950. We note that as per prescribed procedure u/s 19 of The Bombay Public Trust Act, 1950, inquiry No.2791/52 on 30.05.1952, was initiated by Deputy Charity Commissioner, the mention of which can be seen in PTR Schedule 2G. On dated 17.03.1963, he passed an order of registration of the trust vide Registration No.A/4/Amreli. On dated 19.04.1952, application to the Deputy Charity Commissioner, details of property which was held under trust is also given, that is, the trust was having trust property as on date of application of the trust, and therefore the trust is already established before making the application, only the registration was on 17.03.1963. We note u/s 13(1)(b) of the Act, income of a charitable trust or institution created or established on or after 01.04.1962, for the benefit of any particular religious community or caste, other than scheduled castes, backward classes, scheduled tribes or women and children, is not entitled for exemption. As the bar u/s 13(1)(b) is applicable only to those charitable trusts and organisations which have been created on or after 01.04.1962, therefore the trust which were in existence on 01.04.1962 will not lose exemption by invoking provisions of section 13(1)(b) of the Act. Therefore, we direct the learned CIT(E ) to examine the PTR, objects of the trust and other documents and evidences, and grant the registration as per the provisions of the Act. It is needless to say that the assessee will be at liberty to adduce any evidences as deemed relevant before the Ld.CIT(E ) at the time of proceedings before him, in consequence to this Amreli Modh Vanik Community Property 8 order and the ld CIT(E ) shall allow the assessee adequate opportunity of being heard and to make relevant submissions, and then pass a speaking order which is fair and judicious.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order is pronounced in the open court on 29/09 /2025