ITAT Orders Reconsidering Trusts' Registration, Imposes ₹10,000 Cost [Read Order]
ITAT remanded trust registration cases to CIT(E) citing natural justice, despite procedural lapses by the assessees
![ITAT Orders Reconsidering Trusts Registration, Imposes ₹10,000 Cost [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/04/trust-registration-ITAT-Imposes-taxscan-.jpg "ITAT Orders Reconsidering Trusts Registration, Imposes ₹10,000 Cost [Read Order]")
In a recent case, the Surat Bench of Income Tax Appellate Tribunal (ITAT), has remanded the trust registration cases of three charitable institutions to the Commissioner of Income Tax (Exemption) (CIT(E)) despite procedural delay by the assessees. It also imposed a cost of ₹10,000 on them. Surat Diamond Cutting & Polishing Cluster SPV Trust, Bavangam Navgam Bhavsar Care...
In a recent case, the Surat Bench of Income Tax Appellate Tribunal (ITAT), has remanded the trust registration cases of three charitable institutions to the Commissioner of Income Tax (Exemption) (CIT(E)) despite procedural delay by the assessees. It also imposed a cost of ₹10,000 on them.
Surat Diamond Cutting & Polishing Cluster SPV Trust, Bavangam Navgam Bhavsar Care Charitable Trust, and Shree Aadinath Educational & Charitable Trust (assessees/appellants) had each applied for registration under section 12A(1)(ac)(iii) of the Income Tax Act, 1961. All three trusts had earlier been granted provisional approvals.
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As part of the procedure for registration, the appellants were directed to submit the necessary documents before the CIT(E), but they failed to submit it on time and never sought any adjournments.
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The CIT(E) also observed that the appellants, by not filing the documents, failed to prove the genuineness and legitimacy of the trust. CIT(E) thus rejected the application for registration and also cancelled the provisional registration of the trust u/s 80G(5) of the Income Tax Act, 1961.
In doing so, the CIT(E) placed reliance on Supreme Court precedents, including CIT, Ujjain v. Dawoodi Bohra Jamat (2014) and New Noble Educational Society v. Chief Commissioner of Income (2014), to justify the rejection of the application.
Aggrieved by the order, the appellants appealed before the tribunal.
Sapnesh Sheth, the counsel for the appellants, stated that the failure to file the relevant documents was due to some situations beyond their control.
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He argued that CIT(E)’s order was an ex parte order, and the appellants were given only two chances of hearing. The counsel requested before the tribunal to grant one more chance.
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Meanwhile, the counsel for the revenue, Ravi Kant Gupta, pleaded that if the appellants application was remitted back, then reasonable costs must be imposed.
After considering the arguments, the tribunal led by Pawan Singh (Judicial Member) and Bijayananda Pruseth (Accountant Member) found that CIT(E) had given reasonable opportunities to the appellants for submitting the documents, and no adjournment request was made by them.
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Even though the tribunal acknowledged that the CIT(E) had provided reasonable opportunities and followed the prescribed procedure, it chose to remand the matter to the CIT(E) to give the appellants another chance, in the interest of natural justice.
The tribunal also imposed a cost of ₹10,000 payable to the Gujarat High Court Legal Aid Authority and directed the appellants to remain vigilant.
To Read the full text of the Order CLICK HERE
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