Rejection of Trust's S.12A Registration: ITAT Restores Matter to CIT(E) [Read Order]

The Ahmedabad Bench of Income Tax Appellate Tribunal(ITAT) restored the matter of a charitable trust's registration under section 12A of Income Tax Act,1961, of  to the Commissioner of Income Tax (Exemptions) [CIT(E)] for fresh consideration after its application was rejected.

Seva Samarpan Charitable Trust,appellant-assessee,filed an application in Form 10AB for registration under Section 12A of the Act. The CIT(E) issued notices on July 4, 2024, and August 7, 2024, seeking specific details. However, the trust neither responded nor requested an adjournment.

As a result, the CIT(E) rejected the application and cancelled the provisional registration. The CIT(E) noted that the trust failed to provide evidence of its genuine activities, alignment with its objectives, and compliance with relevant laws.

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The trust was also directed to compute and pay tax under Section 115TD, report it in the income return, and provide proof of appeal filing to the AO, if applicable, to benefit from the extended time limit. The trust appealed against this order before the ITAT.

The assessee counsel argued that the trust was denied a fair chance, as it received only two notices within a short period and was unaware of them due to e-portal access issues. The counsel stated that the trust, operating since December 2020, had submitted key documents in Form 10AB, including the Registration Certificate, Trust Deed, and audit reports for the last three years. It was claimed that the CIT(E) ignored these details while rejecting the application.

Read More: Rejection of S.12AB Registration Due to Failure to Provide Documents: ITAT Restores Matter to CIT(E)

The counsel requested the matter be sent back to the CIT(E) for reconsideration with a proper hearing. The revenue counsel did not object to this.

The two member bench comprising Siddhartha Nautiyal(Judicial Member) and Makarand V.Mahadeokar(Accountant Member) reviewed the arguments and evidence. It restored the matter to the CIT(E) for fresh consideration, directing a proper hearing for the assessee.

In short,the appeal filed by the assessee was allowed for statistical purposes.

To Read the full text of the Order CLICK HERE

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