ITAT Mumbai Restores Trust’s Section 12AB Registration Matter To CIT(E) For Fresh Consideration
Pranav B Prem
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has set aside an order passed by the Commissioner of Income Tax (Exemptions) [CIT(E)] rejecting the application of Shri Hans Maharaj Trust for registration under Section 12AB of the Income Tax Act, 1961, and has remanded the matter back to the CIT(E) for fresh adjudication in accordance with law. The ruling was delivered by a Bench comprising Accountant Member Vikram Singh Yadav and Judicial Member Anikesh Banerjee, while dealing with an appeal filed by the trust against the order dated December 26, 2024, passed under Section 12AB of the Act.
At the outset, the Tribunal dealt with a delay of 11 days in filing the appeal. The assessee had filed a condonation petition explaining that its authorised Chartered Accountant was seriously ill and had been hospitalised during the relevant period. Taking note of the medical documents placed on record, including the hospital discharge summary, the Bench held that sufficient cause had been shown and condoned the delay.
The dispute arose after the CIT(E) rejected the trust’s application for registration on the ground that Clause 3(e) of the objects clause in the trust deed allegedly permitted application or receipt of funds outside India, which, according to the CIT(E), was in violation of the provisions of Section 11 of the Income Tax Act. On this basis, the registration sought under Section 12AB was declined.
Before the Tribunal, the assessee contended that the CIT(E) had misread the objects clause. It was submitted that the trust had neither incurred any expenditure outside India nor proposed to do so, and that there was no authority under the trust deed permitting application of funds abroad in contravention of Section 11. The assessee further submitted that it had placed on record an amended trust deed along with supporting documents evidencing its charitable activities, which were not properly considered by the CIT(E) while passing the impugned order.
The assessee therefore prayed that the matter be restored to the file of the CIT(E) for fresh consideration after examining the amended trust deed and the material already filed on record. The Departmental Representative supported the order of the CIT(E) but did not raise any serious objection to the prayer for remand sought by the assessee.
After hearing both sides and perusing the material on record, the Tribunal noted that the CIT(E) had primarily rejected the application on the basis of an objection to Clause 3(e) of the objects clause, despite the assessee’s explanation that no expenditure outside India had been incurred or proposed. The Bench also took note of the assessee’s submission that the amended trust deed and supporting documents demonstrating charitable activities were available on record.
In these circumstances, the Tribunal held that the matter required reconsideration by the CIT(E). It observed that the issue could be appropriately examined only after taking into account the amended trust deed and all supporting material furnished by the trust. Accordingly, the Tribunal set aside the impugned order and restored the matter to the file of the CIT(E) for de novo consideration, with a direction to examine the amended trust deed and other documents in accordance with law. The appeal filed by the assessee was thus allowed for statistical purposes.
Appearance
Appearance for Assessee: Shri Bharat Kumar
Appearance for Revenue: Shri Ritesh Mishra, CIT DR
Cause Title: Shri Hans Maharaj Trust Vs. CIT (Exemptions) Mumbai
Case No: ITA No. 1721/Mum/2025
Coram: Accountant Member Vikram Singh Yadav, Judicial Member Anikesh Banerjee
