Secret Charitable Trust Vs CIT (Exemption) (ITAT Ahmedabad)
In a significant ruling emphasizing procedural fairness, the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, has overturned an order by the Commissioner of Income Tax (Exemption) [CIT(E)] that rejected a charitable trust’s application for final approval under Section 80G(5)(iii) of the Income Tax Act, 1961. The tribunal’s decision, pronounced on March 20, 2025, primarily hinged on a severe violation of the principles of natural justice, specifically the inadequate opportunity provided to the assessee to present its case.
The case, identified as Secret Charitable Trust 213 Vs CIT (ITAT Ahmedabad), saw the assessee, a public charitable trust registered under the Gujarat Public Trust Act, 1950 since May 11, 2023, challenge the CIT(E)’s decision dated December 30, 2024. The trust had previously secured registration under Section 12AA of the Act on September 18, 2023, and concurrently received provisional approval under Section 80G(5)(iii) from the same date.
Procedural Shortcomings Lead to Appeal
Following its provisional approval, the Secret Charitable Trust proceeded to file Form 10AB, seeking final approval under the critical Section 80G(5)(iii). This section grants tax benefits to donors who contribute to approved charitable institutions. The process, however, encountered a hurdle when the CIT(E) issued a notice on September 14, 2024, requesting additional details from the trust. The assessee duly complied, submitting its comprehensive response on November 23, 2024.
