ITAT Jodhpur Restores Section 12AB Registration Application of Shiv Kumar Hissaria Charitable Trust: CIT(E) Must Examine Evidence Issue-Wise and Communicate Precise Deficiencies
Background and Context
The Jodhpur Bench of the Income Tax Appellate Tribunal recently adjudicated upon an appeal filed by Shiv Kumar Hissaria Charitable Trust against an order passed by the Commissioner of Income-tax (Exemption), Jaipur ["CIT(E)"], dated 26.06.2025, issued in Form No. 10AD. The said order had simultaneously rejected the assessee's application for regular registration and cancelled its provisional registration — a twin adverse action that prompted the assessee to approach the Tribunal for relief.
This decision is significant for charitable trusts and institutions across India that are navigating the registration framework under Section 12AB of the Income-tax Act, 1961, particularly those that have transitioned from provisional to regular registration and face scrutiny of their activities during the conversion process.
Facts of the Case: Shiv Kumar Hissaria Charitable Trust Vs Commissioner of Income Tax (Exemption), Jaipur
Provisional Registration and Application for Regular Registration
The assessee had been granted provisional registration under Section 12A(1)(ac)(vi) of the Income-tax Act, 1961 vide order dated 27.05.2021. Subsequently, the assessee filed an online application in Form No. 10AB on 27.11.2024, seeking regular registration under Section 12A(1)(ac)(iii) of the Act.
CIT(E)'s Examination Process
To verify the charitable nature of the assessee's objects and the genuineness of its activities, the CIT(E) issued a detailed questionnaire on 03.12.2024, seeking the following categories of information and documents:
- Particulars of settlors and trustees
- Certified copy of the trust deed
- Details of charitable objects
- Registration under the Rajasthan Public Trust Act, 1959
- Annual accounts and ledger accounts for major receipts and expenditure
- Details of CSR receipts and their utilisation, along with supporting bills and vouchers
- Particulars of charitable activities and lists of beneficiaries
- Bank statements for the relevant period
- Details of donations made to other trusts
In response, the assessee furnished details of trustees, the trust deed, registration certificate under the Rajasthan Public Trust Act, 1959, bank statements from 01.04.2021 to 31.03.2024, income and expenditure accounts for financial years 2021-22, 2022-23 and 2023-24, provisional accounts for financial year 2024-25 up to November 2024, and Form No. 10AC relating to approval under Section 80G of the Act.
However, the CIT(E) found that complete bills and vouchers, supporting documentation for charitable activities, and details of bank transactions exceeding Rs. 20,000/- had not been furnished satisfactorily.
Show-Cause Notices and Further Submissions
The CIT(E) subsequently issued two show-cause notices:
Show-cause notice dated 05.05.2025 — Requiring the assessee to explain the maintainability of its application, furnish bank transaction details, and produce evidence supporting expenditure on CSR activities, education, food distribution, and relief to poor persons.
Show-cause notice dated 06.06.2025 — Requiring furnishing of complete details of CSR funds received from financial year 2022-23 onwards, including ledger accounts, memoranda of understanding or agreements, correspondence, TDS particulars, utilisation certificates, bills and vouchers, particulars of donee trusts, their trust deeds and registration certificates, beneficiary details, and photographs or newspaper reports relating to charitable activities.
Adverse Findings Recorded by the CIT(E)
After examining the replies, the CIT(E) recorded adverse findings under five major heads:
1. CSR Funds
The assessee had received aggregate CSR receipts of Rs. 1,65,45,000/- from various contributing entities during financial years 2022-23 to 2024-25. The CIT(E) observed that the assessee had furnished only Board resolutions of the contributing companies but had not produced verifiable memoranda of understanding, agreements, proof of implementation, utilisation certificates, comprehensive activity details, or relevant bills and vouchers to substantiate the application of CSR funds.
2. Food Distribution Expenditure
The assessee claimed expenditure of Rs. 20,52,719/- during financial year 2024-25 on distribution of approximately 300 to 400 food packets daily to poor persons in Jodhpur. The CIT(E) noted the absence of photographic or video evidence, newspaper reports, distribution location details, beneficiary particulars, or a consolidated daily expenditure statement. The CIT(E) also expressed reservations about the bills and vouchers produced, as the underlying activity was not independently verifiable.