Surati Modh Ganchi Gnati Jilla Nanpura Panch Vs CIT (Exemption) (ITAT Surat)
The appeal before the Income Tax Appellate Tribunal, Surat Bench, arose from an order dated 30.06.2025 passed by the Commissioner of Income-tax (Exemption), Ahmedabad, whereby the registration of the assessee-trust under Section 12AB of the Income-tax Act, 1961 was cancelled.
The assessee-trust was originally registered with the Assistant Charity Commissioner, Surat, on 26.09.1952 and had obtained registration under Section 12A of the Act on 03.10.1974. Subsequently, pursuant to the amended registration regime, the trust applied in Form 10A under Section 12A(1)(ac)(i) and was granted regular registration under Section 12AB for Assessment Years 2022–23 to 2026–27. The trust also applied for approval under Section 80G(5)(iii) of the Act on 06.03.2024 by availing the benefit of Circular No. 7/2024. That application was rejected by the CIT(E) on 27.09.2024 on the ground that the activities of the trust were not in accordance with its objects and that the genuineness of activities was not fully established.
While dealing with proceedings under Section 12AB(4), the CIT(E) observed that the assessee had failed to demonstrate the genuineness of its activities and alignment with its stated objects, as required under the Act. The assessee contended that its appeal against rejection of approval under Section 80G had been decided in its favour by the Tribunal and therefore the cancellation proceedings under Section 12AB should be dropped. This contention was rejected by the CIT(E) on the ground that pendency or outcome of appeal proceedings does not bar action under Section 12AB(4) and that the grounds for rejection under Section 80G are distinct from registration under Section 12A/12AB. In the absence of any stay granted by the Tribunal, the CIT(E) held that administrative action was valid and justified and concluded that there was a violation of clause (e)(i) of the Explanation to Section 12AB(4). Accordingly, the registration under Section 12AB was cancelled.
