ITAT Grants Relief to Charitable Trust, Orders Fresh Hearing on Registration After Trust Deed Modifications [Read Order]

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the order of the Commissioner of Income Tax (Exemptions) rejecting the registration of Krishnavi Charitable Trust under Section 12A of the Income Tax Act, and directed a fresh hearing in light of the modifications initiated by the trust in its deed.

The appellant in the case is Krishnavi Charitable Trust, which had filed an appeal against the order dated 27 March 2024 passed by the CIT (Exemptions), New Delhi. The trust's application for registration under Section 12A(1)(ac)(iii) had been rejected on grounds including the alleged absence of an irrevocability clause and a dissolution clause in the trust deed, and the existence of a special clause that raised concerns with the CIT (E).

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During the hearing, the assessee submitted that the trust deed did, in fact, contain both an irrevocability clause and a dissolution clause. The irrevocability clause was found at page 4 of the deed, and the dissolution clause at page 19 under sub-point (xiv) of clause 9. Regarding the special clause appearing on page 21 of the deed, the assessee submitted that the process for removing it had already been initiated through a supplementary deed and was expected to be completed shortly.

The Tribunal observed that the objections raised by the CIT (E) had largely been addressed. The clauses identified as missing had actually been included in the trust deed, and the process to remove the special clause was underway. The Tribunal acknowledged that the Commissioner had passed the impugned order ex parte without granting adequate opportunity to the assessee, which further justified restoring the matter for fresh adjudication.

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In its findings, the Tribunal directed that the appeal be remanded back to the CIT (Exemptions) for reconsideration of the trust’s application. The CIT (E) has been instructed to give the assessee sufficient opportunity to submit the amended deed and respond to any further queries before arriving at a fresh decision on the issue of registration.

The order was passed by the bench comprising Challa Nagendra Prasad, Judicial Member, and Naveen Chandra, Accountant Member.

In Conclusion, the appeal was allowed for statistical purposes.

To Read the full text of the Order CLICK HERE

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Krishnavi Charitable Trust vs The C.I.T. , 2025 TAXSCAN (ITAT) 970 , ITA No. 2789/DEL/2024 , 07 February 2025 , Shri Pawan Chhikara , Shri Om Parkash