TaxTMI 
TaxTMI 
2025 (4) TMI 1424
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....n 12AB of Income Tax Act, 1961. 2. In the facts and circumstances of the case and in law, Id. CIT(E) has erred in passing the order rejecting the application filed by the assessee trust for registration under Section 12AB, by not appropriately considering the submissions filed by the assessee trust, during the course of proceedings before the Id. CIT(E). The action of the Id. CIT(E) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by directing Id. CIT(E) to grant registration, to the assessee trust, under Section 12AB of Income Tax Act, 1961. 3. The assessee trust craves its rights to add, amend or alter any of the grounds on or before the hearing." 3. Brief facts of the case are that the assessee filed online application in Form No. 10AB seeking registration u/s 12AB of the Income Tax Act, 1961 was filed on 30.09.2023. A letter/notice dated 29.01.2024 was issued at the e-mail/address provided in the application requiring the assessee to submit certain documents/explanations by 09.02.2024, in response assessee filed adjournment request for 15 days. Further next date was fix for 16.02.2024 vide dated 10.02.2024. ....
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....that the activities undertaken by the Assessee qualify as commercial activities for the purposes of the Act. 2. CIT(E) The Ld. CIT(E) sought recourse to proviso to Section 2(15) of the Act to deny Assessee registration under Section 12AB of the Act. The Ld. CIT(E) based his opinion on the Income and Expenditure accounts ("I&E Accounts") submitted by the Assessee during the registration proceedings. In this regard, it is stated that the Ld. CIT(E) construed that rent charged by the Assessee for staying at Dharamshala is not nominal and hence., the rental receipts reflected in the I&E Accounts are in the nature of business receipts/trade receipts. The Ld. CIT(E) concluded that the activities performed by the Assessee fall within the scope of the phrase "nature of trade, commerce or business" mentioned under proviso to Section 2(15) of the Act. After establishing that the rental receipts are drawn from activities in the "nature of trade, commerce or business," the Ld. CIT(E) ruled that the Assessee also contravenes the conditions mentioned under sub-section (a) and (b) of the proviso of Section 2(15) of the Act. This is so because the activities undertaken b....
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.... a question of fact, which requires the court to undertake a case-to-case analysis of the activities involved in the concerned case. 3.3. In regard to this it is imperative to highlight that there is a proviso inserted in Section 2(15) in related to "advancement of any other object of general public utility." The proviso to Section 2(15) of the Act only operationalizes upon the fulfilment of the condition that the nature of the activity performed by a concerned trust or institution has to be in the "nature of trade, commerce or business." If the activity performed is not the nature of "trade, commerce or business" then the proviso will be inapplicable in the concerned situation. Albeit, if the activity is covered by the scope of "trade, commerce or business," then the following conditions are taken into consideration: a) The business activity undertaken by the charitable purpose is to be incidental to the activity performed for advancement of any other object of general public utility/charitable activity, and b) The receipts from business activity should not exceed 20% of the total receipts of the charitable trust. 3.4. The Finance Act, 2015 amen....
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....67;त है जिसका इन्दाज पूर्व में दर्ज इन्द्राजअनुसार ही है। 10. अचल सम्पति वर्तमान में प्रन्यासअचल सम्पत्ति का इन्द्राज पूर्व में दर्ज है अनुसार ही है। 3.6. Further, it is submitted that reference may also be drawn to multiple judgments across jurisdiction wherein the courts have ruled that the activities performed or rent charged by Dharamshala do not constitute as activities in the "nature of trade, commerce or business. In this regard, please refer some of the....
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....and help to destitutes are of general public utility and the Tribunal has rightly come to the conclusion that the assessee is a public charitable and religious trust and its income is entitled to be exempt under section 11." iv. The factual matrix of the present case is similar to the decision of Hon'ble Madhya Pradesh High Court in CIT v Ganesbram Laxminarayan Goel [1983] 14 Taxman 1 (MP wherein the Assessee was a charitable trust established for the purpose of erecting Dharamshala for the use and residence of travelling public. Further, the Assessee in this case also let out certain shops of the Dharamshala to achieve the purpose. The rental income derived from both these activities was to be applied towards maintenance of Dharamshala. It was held in this case that the nature and objects of the trust are covered within the scope general public utility and is, therefore, a charitable trust within the meaning of Section 2(15) of the Act. 3.7 In light of this, it is submitted that the aforementioned precedents are squarely applicable to the present situation as the Assessee is charging nominal rent ie. Rs. 125/-only per person from the customers staying at the ....
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.... an opportunity of presenting their case or opinion which is clear violation of principles of natural justice. In view of the above, it is humbly prayed that the Impugned Order of the Ld.CIT(E) deserves to be rejected and quashed, and Assessee should be allowed registration under Section 12AB of the Act." 4.1 The ld. AR of the assessee also filed a detailed paper books in support of the contentions so raised. The index of the document submitted by the ld. AR of the assessee reads as under:- S. No. Particulars 1. Written submission 2. Copy of Form 36 3. Copy of provisional registration granted to the assessee dated 27 May, 2021. 4. Copy of Form 10AB dated 30 September 2023 filed by the assessee under section 12AB of the Income Tax Act, 1961. 5. Copy of order passed by CIT dated 19 March, 2024. 6. Annexure-1: Balance sheet for financial year 2020-12, FY 2021-22, and FY 2022-23. 7. Delhi High Court judgment in 133 ITR 470 8. Assistant Commissioner of Income Tax (Appellant vs. M/s Shri Panchyati Dharmshala (respondent ) (ITA Nos. 809/JP/2013, Income Tax Appellate Tribunal, Jaipur. 9. Raghunath Das v CIT (1986) 24 T....