FAIAN-E-GOUS-E-AZAM TRUST,PUNE vs. THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), PUNE

PER RAMA KANTA PANDA, V.P. :

This appeal filed by the Assessee is directed against

the order dated 30.04.2023, of the learned CIT(E), Pune,

rejecting the application for grant of registration u/sec.12A of

the Act and thereby rejecting the provisional registration

granted earlier on 10.03.2024 u/sec.12AB of the Income Tax

Act, 1961 (in short "the Act").

an application for registration in Form-10AB under clause (iii)

of section 12A(1)(ac) of the Income Tax Act, 1961 on

01.10.2022. With a view to verify the genuineness of the

activities of the assessee-trust and compliance to requirements

2 ITA.No.737/PUN./2023

of any other law for the time being in force by the

Trust/Institution as are material for the purpose of achieving

its objects, a notice was issued through ITBA portal on

22.02.2023 requesting the assessee to upload certain

information/clarification such as date of commencement of

activity, date of expiry of provisional registration, details of any

other Law applicable for achievement of objectives and the

proof of compliance of said Law, proof of identity of main

trustees/directors, year-wise list of donations received, list of

donors, note on activities along with supporting credible

evidence, details of business undertakings etc. In response to

the same, the assessee submitted it’s response by filing certain

details.

2.1. On verification of the details submitted by the

assessee, the learned CIT(E)noted that object Nos.1, 2, 4 and

the overall arrangement of the objectives through object nos.3,

5, 6, 7, 8, 9, 17, 18(1), 18(1) is to propagate Islam and for the

benefit of a particular religious community and not for general

public. He further noted that assessee has not furnished the

details on the nature of the activities and it seems that objects

of the Trust/Institution are produced therein without giving

the details of actual activities carried out by the Trust/

Institution. He, therefore, was of the opinion that assessee has

failed to comply with the provisions of Rule-17A(2)(k) of the

Income Tax Rules, 1962. He, therefore, asked the assessee

3 ITA.No.737/PUN./2023

vide notice dated 22.02.2023 to furnish the supporting

credible evidence in respect of the activities undertaken. The

assessee submitted that the objections of the Trust/Institution

are not wholly related to religious but are both charitable and

religious. The assessee listed-out the objects and contended

that these objects do not restrict the activities to religious

obligations only.

2.2. However, the Ld. CIT(E) was not satisfied with the

submissions of the assessee. He observed that assessee has

not carried-out any of the activities other than the religious

activities. Most importantly, the religious activities are

restricted to a particular religious community and not open to

general public. The details of activities submitted by the

assessee show religious activities in entirety. He further noted

that the financial statements as on 31.12.2022 show

donations of Rs.135.82 lakhs with expenditure on religious

activities at Rs.34.01 lakhs and with a surplus of 101.52

lakhs. A meagre expenditure of Rs.27,270/- is appearing the

financials shown to be for medical purposes but no evidence of

the same was furnished. He further noted that the assessee

has also not furnished any evidence to support it’s contention

that the expenditure is incurred for general public. He,

therefore, asked the assessee to furnish the list of donors with

their details like name, address, amount of donation, mode of

donation etc.. However, the assessee did not furnish such list.

4 ITA.No.737/PUN./2023

He observed from the details furnished by the assessee that it

is not clear as to how the donors came to know about the

projects of the assessee and in fact about the assessee itself in

such a short span of time to collect funds of such a huge

amount. The failure to furnish the list of donors by the

assessee raises more concern. He, therefore, was not satisfied

about the objects of the assessee and the genuineness of its

activities.

2.3. Without prejudice to the above, he observed that the

date of commencement of activities is on 01.04.2022 and the

provisional registration was granted w.e.f. 10.03.2022. As per

the provisions of clause (iii) of section 12A(1)(ac) of the Income

Tax Act, 1961, where a Trust or Institution has been

provisionally registered under section 12AB of the Act, the

application for regular registration under section 12AB is

required to be filed within 6 months from the date of

commencement of activities. Since, the activities of the

assessee were already commenced before the date of

provisional registration, the learned CIT(E) was of the opinion

that the assessee should have filed the present application

within 6 months from the date of provisional registration i.e.,

on or before 30.09.2022, which was the extended due date for

filing of such application as per CBDT Circular No.8/2022,

dated 31.03.2022. However, the present application was filed

by the assessee on 01.10.2022 i.e. beyond 30.09.2022. He,

5 ITA.No.737/PUN./2023

therefore, asked the assessee to show cause as to why the

application should not be cancelled.

2.4. The assessee in response to the same, contended

that the delay was due to glitches of the respective web-site.

He also made an alternate argument that the commencement

of major activities was May, 2022.

2.5. However, the learned CIT(E) was not satisfied with

the submissions of the assessee and rejected the claim of

registration as well as cancelled provisional registration

granted earlier by observing as under :

“5.3. The submissions of the assessee is duly

considered. Firstly, the assessee in its own initial

submission submitted that the date of commencement of

activities is 01/04/2022 and now contends that the major

activities are started from May, 2022. By using the work

"major, the assessee itself does not deny that the minor

activities were started as per earlier communication ie,

from 01/04/2022 Most importantly there is no mention of

major or minor activities but only the activities are to be

taken note off. Thus, the contention of the assessee is not

acceptable. Surprisingly, some of the photographs - as

submitted by the assessee in support of its claim of

activities, show a sign board of the assessee which

mentions "Since 2021". In view of the above facts, the new

6 ITA.No.737/PUN./2023

claim of the assessee in respect of date of commencement

of activities is not acceptable.

5.3. Considering the above, it is seen that the

assessee has not filed the present application within the

time limit allowed under clause (iii) of section 12A(1)(ac) of

the Income Tax Act, 1961, and hence, the application itself

is invalid.

assessee is hereby rejected and the provisional

registration granted on 10/03/2022 under section 12AB

read with section 12A(1)(ac)(vi) of the Income Tax Act,

1961 is hereby cancelled.”

assessee is in appeal before the Tribunal by raising the

following grounds :

January 2022 through execution of Trust Deed.

clause (vi) of clause (ac) of sub-section (1) of section 12A of

the Act and order for provisional registration was given in

Form 10AC w.e.f. 10.03.2022. Therefore, the appellant

trust applied for final registration under sub clause (iii) of

clause (ac) of sub-section (1) of section 12A of the Act vide

application filed in Form 10AB dated 01.10.2022.

7 ITA.No.737/PUN./2023

u/s 12AB(1)(b)(i) of the Act dated 22.02.2023 was served

upon the appellant trust. In response to the said notice,

your appellant trust furnished the details called for

appellant trust to show cause as to why the application

should not be rejected and why the registration granted

should not be cancelled for the reasons that the present

application is not filed in time, the trust is created for the

benefit of Islam and for the benefit of particular religious

community and evidence for activities carried out is not

submitted

furnished that the application is filed within the time along

with the various documents and photos as evidences for

activities carried out by the trust.

rejected the application and also cancelled the provisional

registration of the Trust u/s. 12A of the Act

the Ld. CIT(E) and therefore is in appeal by payment of

necessary appeal fees vide challan Serial No. 06936 dated

19.06.2023.”

filed an application seeking permission of the Bench for

8 ITA.No.737/PUN./2023

admission of certain additional evidences as per Rule 29 of the

I.T. Rules, 1962 and submitted that these additional evidences

go to the root of the matter for deciding the appeal. He,

accordingly requested that additional evidences be admitted

and the matter may be remanded to the file of Ld. CIT(E) for

adjudication of the issue afresh.

supporting the order of the Ld. CIT(E) strongly objected to the

admission of the additional evidences. He submitted that

adequate opportunity was granted by the CIT(E) to the

assessee to substantiate it’s case for allowing registration

u/sec.12A of the Act. The details furnished by the assessee

were not appreciated by the CIT(E) and he has given valid

reasons for rejecting the grant of registration u/sec.12A of the

Act. He accordingly submitted that the order of the CIT(E)

being self-explanatory be uphold and the grounds raised by

the assessee should be dismissed.

the sides and perused the material available on record. We

find the Ld. CIT(E) has rejected the application of the assessee

seeking grant of registration u/sec.12A of the Act and thereby,

cancelled the provisional registration granted earlier on the

ground that the activities carried-out by the assessee

Trust/Institution are for a particular religious community and

not open for general public; the assessee did not produce the

9 ITA.No.737/PUN./2023

list of donors who made donations to the assessee Trust and

that the genuineness of the activities are doubtful. It is also

observed by the Ld. CIT(E) that some of the photographs as

submitted by the assessee in support of it’s claim of activities

show a sign board of the assessee which mentions “since

2021”. Therefore, the new claim of the assessee in respect of

date of commencement of it’s activities is not acceptable. Now

the assessee has come-up before the Tribunal with certain

additional evidences to support it’s case for grant of

registration u/sec.12A of the Act. It is the submission of the

Learned Counsel for the Assessee that these additional

evidences go to the root of the matter. Considering the totality

of the facts of the case and in the interest of justice, we admit

the additional evidences and restore the issue back to the file

of Ld. CIT(E) with a direction to give one more opportunity to

the assessee to substantiate it’s case and decide the issue as

per fact and law. We clarify here that we are not giving any

opinion about the merit of the case at this juncture and the

CIT(E) is free to peruse the material and pass appropriate

order as per fact and law. We hold and direct accordingly. The

grounds raised by the assessee are accordingly allowed for

statistical purposes.

statistical purposes.

10 ITA.No.737/PUN./2023

Order pronounced in the open Court on 29.11.2024.

Sd/- Sd/- [MS. ASTHA CHANDRA] [RAMA KANTA PANDA] JUDICIAL MEMBER VICE PRESIDENT

Pune, Dated 29th November, 2024

VBP/-

Copy to 1. The appellant 2. The respondent 3. The Pr. CIT, Pune concerned 4. D.R. ITAT, “A” Bench, Pune. 5. Guard File.

//By Order//

//True Copy //

Sr. Private Secretary, ITAT, Pune Benches, Pune.