Bethany Chapel Vs ITO (ITAT Visakhapatnam)
The appeal filed by Bethany Chapel, a trust, before the Income Tax Appellate Tribunal (ITAT) in Visakhapatnam, contested the decision of the Commissioner of Income-Tax (Exemptions) (CIT(Exemptions)), Hyderabad, to deny its application for permanent registration under Section 12AB of the Income-tax Act, 1961. The core of the appeal was that the CIT (Exemptions)’s order was unreasoned and legally unsustainable.
Background of the Case
Bethany Chapel, constituted by a trust deed dated January 16, 1924, had aims and objectives predominantly related to public religious activities and assisting the poor. The trust was initially granted provisional registration under Section 12A(1)(ac)(vi) of the Act on February 28, 2023, for a period covering the assessment years 2023-24 to 2025-26.
Following this provisional period, the trust applied for permanent registration by submitting Form No. 10AB. In the course of the application process, the CIT(Exemptions) issued two notices on December 3, 2024, and February 7, 2025, requesting further details. The trust responded promptly, providing the requested information and documents on December 21, 2024, and February 22, 2025.
However, the CIT(Exemptions) subsequently issued an order on March 19, 2025, in “Form 10AD,” rejecting the trust’s application for permanent registration. The rejection order claimed that the trust had furnished only “partial information” and that its activities were “not commensurate” with its stated objectives. The trust filed the present appeal, arguing that the rejection was contrary to both fact and law.
