AI Drafter 
TaxTMI 
TaxTMI 
2025 (7) TMI 1297
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.... the assessee filed its reply. The Ld. CIT(E) noted that the assessee was required vide query letter dated 08.10.2024 mentioned at point nos.7 and 8 to submit a note on activities conducted since inception/during last three years and a notes specifying the main area of charitable/religious activities and a projection/plan for the main charitable/religious activities to be undertaken in the next two years. The ld. CIT(E) on perusal of the reply submitted by the assessee noted about the main objects of the trust being rural development, imparting education, Art & Culture, Healthcare, environment and general welfare. Thereafter, the ld. CIT(E) noted the income and expenditure account of the assessee for FY 2023-24 and held that it was clearly evident from the said statement that the trust was not engaged in any substantial charitable activity as per its objects. He, therefore, held that the genuineness of the charitable activities being carried out by the trust has not been satisfactorily established. In view of these facts, the Ld. CIT(E) concluded that he was unable to arrive about the charitable nature of activities of the trust and hence he rejected the application filed in Form N....
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....ed by the Income Tax Officer on 31« December 2024. Therefore, the due date for filing the appeal is calculated as 60 days from 31» December 2024 (i.e. 01.03.2025). The appeal was * filed within the prescribed period, adhering to the statutory timeline. The appellant submits that the due date for filing the appeal should be considered from 31" December 2024, as per the signing date of the rejection order, ensuring compliance with the provisions of the Income Tax Act. In light of the foregoing, we respectfully request that the Honorable Tribunal reconsider the decision of the Commissioner of Income Tax (Exemption) and grant the trust registration under Section 12A of the Income Tax Act, 1961. The rejection is unjustified, as the trust's activities are genuine, charitable, and serve the public interest. 4. During the hearing before us, the ld. AR filed a written submission explaining the activities of the trust and also filed an appeal set giving the details about the 'note on activities' and supporting documents on page nos.40 to 144. The written submission of the assessee placed at page no.1 to 3 of the paper book is reproduced as under:- Subject....
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....sub-clause ii) or sub-clause iii) or subclause (v) of clause (ac) of sub-section (1) of section 12A rejecting such application and also cancelling its registration; (II) in a case referred to in sub-clause (iv) or in item (B) of sub-clause (vi) of sub-section (1) of section 12A, rejecting such application, after affording a reasonable opportunity of being heard;" It is also pertinent to note that no Show Cause Notice was issued by the CIT prior to the rejection of the application. As per the principles of natural justice, we were entitled to be notified of any deficiencies or concerns and to be given an opportunity to address them. The failure to issue a show cause notice before rejecting our application has resulted in significant hardship for the trust, which is dedicated to fulfilling its charitable objectives. We respectfully submit that such an omission is in contravention of the basic principles of fairness and due process. Your Honour, for your reference, the details of the notices, including the dates on which they were issued and the replies submitted, are hereby provided. This clearly indicates that no Show Cause Notice was issued, ther....
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....y when the trust is newly formed and has limited financial transactions or activities in the early period. A trust's registration should not be denied just because it is in its formative stage and lacks a comprehensive financial history. * Commissioner of Income Tax vs Red Rose School on 7 February, 2007 (Allahabad High Court) & St. Don Bosco Educational Society vs The CIT (Tribunal Lucknow) on 30 December, 2003: The Allahabad High Court held that the rejection of 12A/80G registration based solely on the balance sheet of a newly registered trust, where the trust had limited activities, was improper. The trust's objectives and its future potential to carry out charitable activities are more important than the financials in the early years. 5. Your Honour, we sincerely apologize for the inadvertent omission of the rejection order. which was not included in the appeal memo on pages 11-16. We fully acknowledge this oversight, and in line with the reference made by the Hon'ble Tribunal during the previous hearing, we hereby submit the rejection order for your kind consideration. It is pertinent to note that our trust is d....