Section 13(1)(b) of Income Tax Act inapplicable to trusts created before 1961, even for specific communities; registration under Section 12AB must be granted.

ORDER

Per, Dr. Dinesh Mohan Sinha, JM:

Captioned appeal filed by the assessee, is directed against the order dated 23.11.2024 passed by the Commissioner of Income Tax (Exemption), Ahmedabad under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961, wherein the application filed by the assessee in Form No. 10AB, for approval under Section 12AA of the Income Tax Act, 1961, was rejected holding that Trust was created for a particular community/caste, that is, “Muslim Samaj” and the assessee has also failed to satisfy the genuineness of its activities.

2. The grounds of appeal raised by the assessee are as under:

“1. The Ld. CIT(E) has erred on facts and in law by rejecting your appellant's application for registration of trust u/s. 12AB of the Act. Therefore, your appellant prays that the order of the Ld. CIT(E) may be set aside and directed to grant the registration u/s. 12AB of the Act

2. Your appellant craves leave to add, alter, amend, and/or withdraw any or all the above grounds of appeal”

3. That there is delay of 5 days in filing the appeal against the rejection order dated 23.11.2024. That the main reason stated in the application for condonation of delay was that the assesse not aware of issue a show cause notice by the Ld.CIT(E), Ahmendabad, since the notice was sent through e-mail of the CA.

4. The brief facts of the case that an application for registration of the trust u/s 12AB of the Income Tax Act, 1961, was filed by the assessee-trust on 09.05.2024, in form No. 12AB under Rule 17A(i) of the I.T. Rules, 1962. Therefore, the ld. CIT(E) issued a show cause notice to the assessee, and asked the assessee-trust to furnish detailed note on the activity actually carried out by the trust as well as certain details and documents as mentioned in the notice. However, notice dated 25.07.2024 was duly complied with reply along with documents were filed on 28.08.2024. In response to the notice dated 14.10.2024, neither the assessee attended the office of the ld CIT(E) nor furnished any details/documents nor sought adjournment.

5. The Ld. CIT(E) had gone through the reply and submissions of the assessee and on verification of the details available on records, as well as Self-Certified copy of Public Trust Register [PTR], the ld CIT(E) noticed from the objects of the trust that objects are restricted to particular community i.e. “Muslim Samaj”. The objects of the trust show that the trust is established for the benefit of a particular community i.e. "Muslim Samaj" and not for general public. In view of the above, the assessee does not satisfy the conditions for grant of approval as sought. The ld. CIT(E ) also noted that assessee-trust does not have intention even to start charitable/religious activities. Section 12AA makes, it very clear that before granting registration under this section, the Commissioner has to satisfy himself about the genuineness of the activities of the trust or institution and also he has to verify that these activities are in consonance with the objects of the trust or institution. The ld CIT(E) also placed reliance on the judgement of Hon`ble Supreme Court in the case of Commissioner of Income-tax, Ujjain Vs Dawoodi Bohara Jamat, Civil Appeal No. 2492 of 2014. The facts considered in Para 14 of the judgment by the Hon'ble Apex Court are reproduced for sake of convenience:

"Section 12AA lays down the procedure to be followed by the Commissioner for grant or refusal of application for registration made under Section 12A. According to procedure so laid down, the Commissioner shall call for documents and information and conduct an enquiry to sa