DAWAT E ISLAMI HIND,JAMSHDPUR vs. CIT-EXEMPTION, PATNA

The solitary grievance of the assessee is that the ld. CIT(Exemption) has erred in rejecting the application of the assessee for grant of registration under section 12A(a) of the Income Tax Act, 1961. In response to the notice of hearing, none has appeared on behalf of the assessee. Therefore, with the assistance of ld. CIT(DR), we have gone through the record carefully and proceeded ex-parte qua the assessee.

Brief facts of the case are that the assessee has filed an application in Form No. 10A on 17.01.2018 for grant of registration under section 12A(a). This application of the assessee has been rejected by the ld. Commissioner. On perusal of the order suggests that ld. Commissioner treated the assessee-Trust as a Charitable Trust, whereas the case of the assessee is that it is a Religious Trust and its case ought to have been examined by keeping in mind its object as of Religious in nature. We find that the ld. Commissioner has committed an error by treating the assessee-Trust as a Charitable Trust and ignoring its status as Religious. The ld. Commissioner is required to examine the objectives and thereafter was required to decide whether the assessee is engaged in Religious work or not. We feel that ld. CIT was to conduct a proper enquiry in this connection as contemplated in section 12AA(1)(a). Under this section, ld. Commissioner shall call for documents or information from the assessee-Trust and thereafter would decide the genuineness of activities of the Trust/Institution and after satisfying himself about the objects of the Trust and the genuineness of its activities, he was required to pass an order in writing. The ld. Commissioner has not appreciated the controversy in right perspective keeping in mind the objects of the Trust and, therefore, his order is not sustainable. We, therefore, set aside the impugned order and remit back to the file of ld. Commissioner for re- adjudication. The ld. Commissioner shall provide due opportunity of hearing to the assessee before re-adjudicating its application for grant of registration under section 12AA.

In view of the above, the appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the open Court on February 21, 2022.