Bhagwan Mahaveer Jain Relief Trust Vs CIT(Exemption) (ITAT Raipur)
Income Tax Appellate Tribunal (ITAT) Raipur ruled in favor of Bhagwan Mahaveer Jain Relief Trust, setting aside the Commissioner of Income Tax (Exemption) [CIT(E)]’s order rejecting its application for registration under Section 80G of the Income Tax Act, 1961. The CIT(E) denied the trust’s request due to an alleged incorrect selection of the sub-clause while filing Form 10AB. The rejection was purely technical and did not assess the trust’s compliance with charitable activities. The assessee argued that such a clerical mistake should not result in outright rejection, particularly without being given an opportunity to rectify it. The ITAT noted that the trust had already complied with statutory obligations and had been previously granted exemption under Section 12AA, affirming its charitable status.
The ITAT found that the CIT(E) failed to issue a show-cause notice before rejecting the application, violating the principles of natural justice. The tribunal emphasized that the trust should have been allowed to explain or amend the filing errors before being denied registration. As a result, the ITAT remanded the case back to the CIT(E) for reconsideration, directing that a fair opportunity be provided to the trust to present its case. While several legal precedents were cited in favor of the trust, the tribunal deemed it premature to evaluate them at this stage. The ruling underscores the necessity of due process and affirms that procedural lapses alone should not lead to the rejection of charitable institution registrations under Section 80G.
