Application of Form 10AB Rejected As Premature And Non-Maintainable: ITAT Remands Citing Commencement of Trust Activities
The Tribunal set aside the CIT(E)’s rejection of Form 10AB as premature due to non-commencement of activities, and remanded the matter for fresh adjudication, noting that the trust had since commenced charitable activities in March 2024.
The Tribunal set aside the CIT(E)’s rejection of Form 10AB as premature due to non-commencement of activities, and remanded the matter for fresh adjudication, noting that the trust had since commenced charitable activities in March 2024.The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) set aside the order of the Commissioner of Income Tax (Exemption) [CIT(E)] rejecting...
The Tribunal set aside the CIT(E)’s rejection of Form 10AB as premature due to non-commencement of activities, and remanded the matter for fresh adjudication, noting that the trust had since commenced charitable activities in March 2024.The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) set aside the order of the Commissioner of Income Tax (Exemption) [CIT(E)] rejecting the application in Form 10AB for regular registration under Section 12AB(1)(b) of the Income Tax Act, 1961, as premature and non-maintainable Citing commencement of activities.
Maa Sharda Kothari Foundation (assessee), a public charitable trust established and registered under Registration No. E/15324/AHMEDABAD, was granted provisional registration under Section 12AB vide Form 10AC for the period from Assessment Year (AY) 2023-24 to AY 2025-26.
The assessee filed an application in Form 10AB pursuant to the provisions of Section 12A(1)(ac)(iii) sought conversion to regular registration under Section 12AB(1)(b) of the Income Tax Act.
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The CIT(E) sought details on activities, donations, and expenditures for the last three financial years. The CIT(E) observed that the trust had not commenced any charitable activities since inception.
The CIT(E) observed that the trust had received no donations, and incurred no expenditures towards its objectives, as per audited financial statements for FY 2019-20 to 2022-23. The CIT(E) rejected the application as premature and non-maintainable.
Aggrieved by the CIT(E)’s order, the assessee appealed to the ITAT. The assessee supported its plea with an affidavit from trustee Shri Mitesh Kothari, evidencing filing of return for AY 2024-25 along with Form 10BB audit report.
The two-member bench comprising T.R. SenthilKumar (Judicial Member) and Makarand V. Mahadeokar (Accountant Member) observed that while activities had not commenced at the time of application, the trust had since started operations in March 2024 within the provisional registration period, as evidenced by Form 10BB and the return filed.
The bench observed that there is no statutory bar on filing for regular registration early, provided provisional registration is in place. It further noted persistent portal errors preventing a fresh filing, which remained uncontroverted.
The bench relied on the precedent in Susamskar Foundation vs. CIT(E) which held that applications for final registration can be filed at the earliest without being deemed premature. It observed that there were no adverse findings on the genuineness of the trust or its objects.
The Tribunal set aside the CIT(E)’s order and remanded the matter for fresh adjudication in accordance with law, after affording opportunity to the assessee. The appeal of the assessee was allowed for statistical purposes.
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