ITAT Jodhpur Restores Section 12AA Registration Matter to CIT(E) for De Novo Consideration

Overview of the Case

In a matter concerning trust registration under the Income Tax Act, 1961, the Income Tax Appellate Tribunal, Jodhpur Bench, examined an appeal filed by Jogniya Mata Shaktipith Prabandh AVM Viikas Sansthan against an order passed by the Commissioner of Income Tax (Exemption), Jaipur. The dispute pertained to the rejection of the assessee's application for registration under Section 12AA of the Income Tax Act, 1961, relating to Assessment Year 2021-22.

Rather than adjudicating the matter on its merits at the appellate stage, the Tribunal exercised its discretion to remand the case back to the CIT(E) with a direction to afford the assessee one further opportunity to present its case, given the absence of the assessee's representative before the Bench during the hearing.

Background and Facts of the Case

Jogniya Mata Shaktipith Prabandh AVM Viikas Sansthan, a trust-based entity, had approached the Commissioner of Income Tax (Exemption), Jaipur, seeking registration under Section 12AA of the Income Tax Act, 1961. Such registration is a prerequisite for charitable and religious trusts to avail income tax exemptions under the Act.

The CIT(E) issued its order dated 17 March 2021, rejecting the assessee's application. Being aggrieved by this rejection, the assessee preferred an appeal before the ITAT Jodhpur for Assessment Year 2021-22.

Grounds for Rejection by CIT(Exemption)

The CIT(E) dismissed the registration application primarily on the ground that the assessee had not furnished adequate documentation and information to demonstrate:

  • The charitable nature of the activities being undertaken by the trust
  • The genuineness of such activities as required under Section 12AA
  • Evidence that the trust was actually conducting its operations in accordance with its stated objects
  • Proof that activities were being carried out at the premises specified in Form 10A

The CIT(E) recorded, in unambiguous terms, that despite multiple opportunities being extended to the applicant, the necessary documents and particulars in support of the claim for registration under Section 12AA were not placed on record. The following extract from the CIT(E)'s order encapsulates the findings:

"5. To decide the matter of seeking registration u/s 12AA, the genuineness of the activities being undertaken by the applicant are also to be examined. The applicant has not submitted any such details and other information as mentioned above. Therefore, it is not known that the applicant is actually carrying out the activities as per its objects and at the premises mentioned by it in Form 10A. Thus the charitable nature and genuineness of the activities of the applicant could not be established.

6. Sufficient opportunity has been provided to the applicant to produce details and documents in support of his claim for registration u/s 12AA of the Income Tax Act but applicant have failed to do so. In the light of the above facts, the application seeking registration u/s 12AA is hereby rejected and filed."

Proceedings Before ITAT Jodhpur

When the appeal came up for hearing before the ITAT Jodhpur, no representative appeared on behalf of the assessee. The Departmental Representative (DR), however, was present and placed reliance on the order passed by the CIT(E), supporting the rejection of the registration application.