Jain Citizen Vs CIT (ITAT Jaipur)
Jaipur ITAT Restores U/s 12AB and 80G Registration Applications; Holds CIT(E) Should Issue Show Cause Before Rejecting Charitable Trust’s Claim
The Jaipur ITAT set aside the CIT(E)’s orders rejecting registration under sections 12AB and 80G and restored the matter for fresh consideration, holding that the trust must be afforded a proper opportunity to establish the genuineness of its charitable activities before its applications are rejected.
The CIT(E) had rejected the trust’s registration on the grounds that its activities were primarily for the benefit of the Jain community, allegedly attracting section 13(1)(b), and that the trust had failed to furnish audited financial statements and beneficiary details. Before the Tribunal, however, the assessee contended that it had already uploaded the audited financial statements, registration documents and detailed particulars of beneficiaries, including names, addresses, mobile numbers and educational assistance granted to persons belonging to different communities. It also highlighted its charitable activities such as distribution of ration kits, medical aid, food packets, sanitisers, hospital kits, educational assistance, and feeding of birds and animals.
The Tribunal observed that the genuineness of charitable activities must be examined on the basis of the nature of the activities actually carried out, and if the Commissioner entertained any doubts, the principles of natural justice required issuance of a show cause notice before rejecting the application. It therefore remanded the matter to the CIT(E) to reconsider the applications after granting the assessee an effective opportunity to produce documentary evidence demonstrating that its charitable activities benefit the public at large and not merely a particular religious community. Since the issue of registration under section 80G was dependent upon the outcome of the section 12AB proceedings, that matter was also remanded. Both appeals were allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT JAIPUR
This appeal is filed by the assessee against the order of the Ld CIT (E), Jaipur, dated 22/01/2026, rejecting the application for registration dated 29/06/2024, filed by the assessee in Form 10AB u/s 12A(1) of the Income Tax Act 1961( henceforth the Act ).
2. The grounds of appeal taken by the assessee in the memorandum of appeal in form 36 are as follows:
“Ground]. The impugned orders u/s ]2A dt. 22.0].2026 by the Ld. CIT(E) is illegal, bad in law, barred by limitation, without jurisdiction, against the principles of natural justice and void-ab-initio on the facts of the case, for want of jurisdiction, and various other reasons and hence the same may kindly be quashed.
Ground2. The Ld. CIT(E) grossly erred in law and on the facts of the case by rejecting the application filed for seeking registration u/s ]2A for grant of Registration/Approval and in not granting the Registration/Approval on the incorrect allegations of non-genuineness of activities, activities for the benefit of particular community and also without considering the material available on record in their true perspective and sense. The rejection so made and refusal to grant Registration/Approval u/s ]2A/]2AB is contrary to the provisions of law and facts of the case and the same may kindly be quashed.
Ground3. The Ld. CIT(A) also erred in cancelling the registration when the new law is applicable in this year as after the amendment in 202], the L.d. CIT(E) himself has granted 3 registration u/s ]2A after the amendment. Hence, there is no meaning of earlier proceeding which have already been settled and abetted after amended law and by later registration granted to the assessee.
Ground4. The appellant prays your honours indulgences to add. 4 amend OR alter of OR any of the grounds of the appeal on OR before the date of hearing.”
3. Brief facts emerging from records are that the assessee is a charitable trust duly registered under “ Rajasthan Societies Registration Act ’58 ” engaged in various charitable activities, like providing relief to the poor, education, medical relief, advancement of any other object of general public utility .
3.1 This is the second round of appeal, where this order is passed in pursuance of the order of the Tribunal in ITA No: 276 and 193 / JP/ 2025, dated 28/10/2025, where the matter was remanded back to the Ld CIT ( E ) , for fresh adjudication , after calling for necessary particulars as required for verification of genuineness of charitable activities.
3.2 In course of fresh registration proceedings , on observation of documentary evidences submitted in response to letter dated 16/12/2025 , it has been observed by the Ld CIT ( E ) , that the charitable activity carried out is mostly for the benefit of “Jain community ”( as per observation in page 4 and 5 of the order ) which led to the findings that benefit of charity are being restricted to a particular community on the basis of religion , which is violative of section 13(1)(b) of the Act.
3.3 Apart from above it was observed that copies of audited financials has not been furnished along with documentary evidences and list of beneficiaries for ascertaining the genuineness of activities and the said registration has been rejected.
4. Hence this appeal before the tribunal.
5. In course of hearing the Ld AR of the assessee , submitted that the application for registration has been rejected arbitrarily without taking into consideration the reply of the assessee filed dated 6thJanuary, 2026, where full details of the beneficiaries are given along with names, address, mobile numbers and amount of school fees paid on behalf of the beneficiaries are laid out, and they belong to different community.
6. The Ld AR also referred to various other activities carried out by way of distribution of ration items , medical help , distribution of food packets, sanitiser, hospital kits, feeding of birds and animals at various locations, providing of education fees to various school students, pharmacy students, and others and submitted that all these activities which are charitable in nature should be considered and in case of any doubt of its genuineness an opportunity of explaining any shortfall should have been allowed , which has not been done in this case.
6.1 Moreover, the Ld AR submitted that before rejecting any application for registration, it was incumbent on the Ld CIT ( E ) to have issued a SCN, which has not been done in this case.
7. We have heard the submissions and considered the materials on record and we find that audited financials were duly uploaded in the portal along with registration certificate of RPT and other documents. The question of genuineness of charitable activity can be ascertained from the nature of various activities that are carried out as stipulated above , and if any of the said activities are doubted, then principles of natural justice demands that a show cause notice needs to be issued before rejection of application.
7.1 As such in the interest of justice we remand the matter back to the Ld CIT (E), to consider the application for registration afresh and to provide one more opportunity to the assessee to explain with documentary evidences and to prove the genuineness of charitable activities carried out to the satisfaction of the Ld CIT ( E) and also to prove that charitable activity is carried out for the benefit of the public as a whole and not for any particular community.
7.2 As such the appeal is allowed for statistical purpose.
ITA No : 826 / JPR / 2026
8. This appeal is filed by the assessee against the order of the Ld CIT (E), Jaipur, dated 22/01/2026, rejecting the application for registration u/s 80G dated 13/12/2024, filed by the assessee in Form 10AB u/s 12A of the Income Tax Act 1961.
9. Our findings in ITA No 825/ JPR/ 2026 applies mutatis mutandis.
9.1 Since we have remanded the application for registration u/s 12A back to the Ld CIT ( E ) , this appeal is also remanded to be considered afresh in tandem with the application u/s 12A
10. In the result this appeal is set aside for statistical purpose.
Order pronounced on 28.07.2026 under Rule 34(4) of the Income Tax Appellate Tribunal Rules 1963.
