Gujarat High Court
Shri Soudharma Brihad Tapogachchiya … vs Cit (Exemption) Ahmedabad on 7 July, 2026
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/TAXAP/494/2025 JUDGMENT DATED: 07/07/2026
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/TAX APPEAL NO. 494 of 2025
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
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Approved for Reporting Yes No
✓
==========================================================
SHRI SOUDHARMA BRIHAD TAPOGACHCHIYA TRISTUTIK JAIN SANGHA
SAMARPANAM
Versus
CIT (EXEMPTION) AHMEDABAD
==========================================================
Appearance:
MR. HARDIK V VORA(7123) for the Appellant(s) No. 1
MR AMAN MIR(10881) for the Opponent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 07/07/2026
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1.Heard learned advocate Mr. Hardik V. Vora for
the appellant and learned Senior Standing
Counsel Mr. Aman Mir for the respondent.
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2.This appeal is filed under section 260A of
the Income Tax Act, 1961 (For short “the
Act”) by the appellant assessee trust
challenging the judgment and order dated
03.01.2025 passed by the Income Tax Appellate
Tribunal, Ahmedabad (For short “the
Tribunal”) in ITA No.1571/Ahd/2024.
3.As the controversy involved is in narrow
compass and as the questions are already
considered by this Court in case of
Commissioner of Income-tax Exemption v.
Jamiatul Banaat Tankaria reported in (2024)
168 taxmann.com 35 (Gujarat) and in case of
Commissioner of Income-tax (Exemption) v.
Bhojaram Leuva Patel Seva Samaj Trust
reported in (2025) 178 taxmann.com 572
(Gujarat) respectively, with the consent of
the learned advocates, matter is taken up for
final disposal.
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4.The appeal is admitted for consideration of
the following substantial questions of law:
“1. Whether on facts and
circumstances of case as well as law
on the issue, Ld. Tribunal is right
in holding that the appellant
religious trust is not entitled
registration due to specified
violation for under clause (d) of
Section 12AB (4) of the Act r.w.s.
13(1)(b) of the Act;
2. Whether on facts and
circumstances of case as well as law
on the issue, Ld. Tribunal is right
in holding that the appellant is not
entitled for registration even after
accepting fact that all the objects
enumerated in the objects clause are
related to religious activities;
3. Whether in facts and
circumstances of the case, the
Tribunal has erred in law in not
considering the provisions of
section 12AB(1)(b) of the Act and by
wrongly referring to and relying
upon the provisions of section
12AB(4) read with Explanation clause
(d) under the said sub-section.
5.Learned advocate Mr. Aman Mir waives service
of notice of admission of appeal on behalf of
the respondent.
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6.Brief facts of the case are that the
appellant assessee is a religious trust
created on 05.01.2023. The assessee trust is
already registered by the Charity
Commissioner on 04.05.2023. The assessee
trust made an application on 13.01.2024 for
registration under section 12AB read with
section 12A(1)(ac)(iii) of the Act in Form
No.10 as the trust was granted the
provisional registration under clause (iv) of
Section 12A(1)(ac) of the Act on 10.01.2024
before the Commissioner of Income
Tax(Exemption) (for short “CIT(E)”) from
Assessment Year 2024.
7.The CIT(E) issued the show cause notice on
24.07.2024 calling upon the appellant
assessee trust to show cause as to why the
provisional registration granted to the
assessee trust should not be cancelled as per
the provisions of Explanation clause (d) of
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section 12AB(4) of the Act.
8. The CIT(E) rejected the application for
registration of the assessee trust after
considering the decision of Hon’ble Allahabad
High Court in case of Shri Agrawal Sabha
(Regd.) v. Commissioner of Income Tax-1, Agra
reported in (2014) 45 taxmann.com 273
(Allahabad) and considering the decision of
Hon’ble Supreme Court in case of Ahmedabad
Rana Caste Association v. CIT reported in
(1971) 82 ITR 704, referred to and relied
upon the provisions of section 13(1)(b) of
the Act which provides that provisions of
sections 11 and 12 will not be applicable to
the income of the trust for charitable
purposes or charitable institution created or
established for the benefit of any particular
religious community or caste.
9.Being aggrieved, the assessee trust preferred
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an appeal before the Tribunal. The Tribunal
after considering the submissions made by the
assessee and the reasons assigned by the
CIT(E) dismissed the appeal relying on the
provisions of section 13(1)(b) of the Act.
10. Learned advocate Mr. Hardik Vora for the
appellant-assessee submitted that the issue
of applicability of section 13(1)(b) of the
Act while granting registration cannot be
considered, as provision of section 13(1)(b)
will be attracted only at the time of
assessment of the trust. In support of such
submission, he referred to and relied upon
the decision in case of Commissioner of
Income-tax Exemption v. Jamiatul Banaat
Tankaria (supra) and in case of Commissioner
of Income-tax (Exemption) v. Bhojaram Leuva
Patel Seva Samaj Trust (supra).
11. Learned advocate Mr. Vora submitted that
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Special Leave Petition (Civil) Diary
No.38594/2025 arising out of the judgment and
order passed by this Court in case of
Commissioner of Income-tax Exemption v.
Jamiatul Banaat Tankaria(supra), has been
dismissed by the Hon’ble Supreme Court.
12. On the other hand, learned advocate Mr.
Aman Mir for the respondent referred to and
relied upon the impugned order of the
Tribunal.
13. Having heard the learned advocates for
the respective parties and considering the
facts of the case, the questions of law
framed are no more res integra in view of the
decision of this Court in case of
Commissioner of Income-tax Exemption v.
Jamiatul Banaat Tankaria (supra) and in case
of Commissioner of Income-tax (Exemption) v.
Bhojaram Leuva Patel Seva Samaj Trust
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(supra). This Court in case of Commissioner
of Income-tax Exemption v. Jamiatul Banaat
Tankaria (supra) has held as under:
“6. We have noticed that the ITAT
has decided the issue as under:
“5. We have gone through the
decision of Hon’ble Apex Court
in the case of Dawoodi Bohara
Jamat (supra) and we find that
the ld. Cit (Exemption) has
totally mis-appreciated the
decision rendered by the Hon’ble
Apex Court in the said case. The
Hon’ble Apex Court, we find, in
the said case had categorically
held that Trust with charitable
objects, which existed for the
benefit of a particular
religious community qualified as
charitable entity serving the
public at large and this was
sufficient for grant of
registration under Section 12A
of the Act, and the provisions
of Section 13(1) (b) of the Act
would be attracted only at the
time of granting exemption to
the assessee, wherein if it was
found that the trust existed for
the benefit of a particular
religious community only, the
exemption under section 11 was
to be denied to the assessee.
The Hon’ble Apex Court,
therefore, categorically found
that as per the provisions of
law, section 13(1) (b) could notPage 8 of 25
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be applied for denying the grant
of registration, but was to be
applied only while
granting/denying exemption to
the assessee.
6. It is pertinent to note that
the Hon’ble Apex Court has
categorically held in the said
decision that section 13(1) (b)
comes into picture and is to be
applied only when the
eligibility of exemption of
income in terms of provisions of
section 11 is to be determined
and not at the time of grant of
registration. The Hon’ble Apex
Court has categorically stated
that the assessee has to first
cross the hurdle of being
eligible to exemption under
section 11 by obtaining a
certificate of registration
under section 12A in this
regard. Having crossed this
hurdle, only then the provisions
of section 13(1)(b) would come
into picture, and a trust which
is for the benefit of particular
community, but it objects are
otherwise charitable, is a valid
trust for the purpose of grant
of registration.
7. The ld.CIT(Exemption), in the
present case, we find, has only
picked a portion of the order of
tire Hon’ble Apex Court, wherein
it has been held that the
provisions of section 13(1)(b)
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to a trust with mixed objects
i.e. both charitable and
religious. But he has failed to
take note of the finding of the
Hon’ble Apex Court that section
13(1)(b) would apply only at the
time of grant of exemption under
section 11, and not at the time
of grant of registration under
section 12A of the Act.
8. Our view is further supported
by the decision of the Hon’ble
jurisdictional High Court in the
case of CIT Vs. Bayath Kutchhi
Dasa Oswal Jain Mahajan Trust,
(2017) 8 ITR-OL 494 (Guj)
wherein on the issue of denial
of grant of registration u/s 12A
of the Act by invoking section
13(1)(b) of the Act, it was
categorically held that the
provisions of section 13 would
be attracted only at the time of
assessment and not at the time
of grant of registration. The
relevant finding of the Hon’ble
High Court at para 8 of his
order is as under:
“8. Thus, very premise for
the Commissioner to come to
the conclusion that the
objects of the trust were
confined for the benefit of
a religious community, is
incorrect. Thereafter to
suggest that the activities
were earned out only for
such purposes would be
entering in the realm ofPage 10 of 25
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granting exemptions in terms
of section 13 of the Act,
which would be the task of
the Assessing Officer to be
undertaken at the time of
assessment on the basis of
material that may be brought
on record.”
9. Even otherwise, we have gone
through the objects of the
trust, which were placed before
us in the “statement of facts”
which are as under:
“1. Propagation and campaign
of any sort of Religious and
worldly cultivated
activities, Gaining and
education, to maintain and
administer Urdu English &
Arabic Language cultivation
and training, Cultivation of
craft and industrial
training.
2. To do welfare activities
for upbringing and
development of each section
of the society.
3. To establish Children
Nurseries, Primary schools,
High schools, Colleges,
Madressa, Masjid boarding
houses, Hospitals,
Dispensaries etc. And for
that accommodating fixed
assets and to manage the
same thereby. And to do
every land of charitablePage 11 of 25
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activities.
4. To make necessary
arrangements for
accommodation of poor
people.
5. To help the Blind, Weak,
Feverish people and those
poor people who cannot run
their lives.
6. To give Scholarships to
Muslims Students for their
studies and do make
provisions so as they can
get the religious education,
7. To give medical
assistance in the events of
requirement irrespective of
caste and creed and to
organise medical camps.
8. To help the poor,
unhappy, orphan and
economical poor classes and
to help in burial and
funerals
9. Cottage Industi’ies,
Rural Industries, Women
Industries and to run each
such activities to remove
unemployment with the help
of the government.”
10. The Ld.CIT(Exemption) has
referred to object at S.no 6
which is scholarship to Muslim
students for their studies and
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to make provision so can get
religious education for arriving
at his finding that the objects
are for the benefit of a
particular religious community-
so as to invoke section 13(1)
(b) of the Act. Further we find
that the Ld.CIT(Exemption) notes
that otherwise the objects are
charitable in nature except for
the aforestated object. As per
section 13(1)(b) exemption u/s
11 is denied if the trust is
created or established for the
benefit of a particular
religious community. With
majority of the objects found to
be not catering to a particular
community and no finding of the
assessee actually catering for
the benefit of a particular
community, there is no case for
invoking section 13(1) (b) of
the Act in the present case.
Therefore, we hold that even on
merits the Ld.CIT(Exemption) was
wrong in holding that section
13(1)(b) was applicable in the
facts of the present case.
11. In view of the above, we
hold that the objects of the
trust are not wholly for the
benefit of a particular
religious community, but are
largely charitable in character
for general public at large, and
for the purpose of granting
registration under section 12A,
the provision of section 13(1)
(b) cannot be referred to, which
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is to be applied only when
granting the exemption to the
trust.
12. The order of the
ld.CIT(Exemption) denying grant
of registration is accordingly
set aside, and the Ld. CIT
(Exemption) is directed to grant
the assessee-trust registration
under Section 12A of the Act.
13. In the result, the appeal of
the assessee is allowed.”
7. In view of the findings recorded
by the Tribunal, supported by
decision of this Court in case of
CIT V/S Bhaya Kutchhi Dasa Oswal
Jain Mahajan Trust (2017) 8 IRT- OL
493 (GUJ) that the objects of the
trust are not wholly for the benefit
of a particular religious community,
but are largely charitable in
character for general public at
large and for the purpose of
granting registration under 12A of
the Act, the provision of section 13
(1) (b) cannot be referred to.
Section 13(1) (b) is to be applied
while granting exemption to the
trust. In view of above finding, we
do not find any question of law much
less any substantial question of law
arises for consideration.”
14. In view of above judicial pronouncement
against which SLP is already dismissed by the
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Hon’ble Supreme Court and considering the
facts of the case, we are of the considered
view that the provisions of section 13(1)(b)
of the Act can be invoked only at the time of
assessment and not at the time of grant of
registration under section 12A read with
section 12AB of the Act. This Court in case
of CIT v. Bayath Kutchhi Dasha Oswal Jain
Mahajan Trust reported in (2016) 74
taxmann.com 199 has in similar facts held
that provisions of section 13 of the Act
would be attracted only at the time of
assessment and not at the time of grant of
registration by observing as under:
“8. Thus, very premise for the
Commissioner to come to the
conclusion that the objects of the
trust were confined for the benefit
of a religious community, is
incorrect. Thereafter to suggest
that the activities were carried out
only for such purposes would be
entering in the realm of granting
exemptions in terms of Section 13 of
the Act, which would be the task of
the Assessing Officer to be
undertaken at the time of assessmentPage 15 of 25
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on the basis of material that may be
brought on record.”
15. Considering the decision of this Court
as well as decision of Hon’ble Apex Court in
case of CIT v. Dawoodi Bahra Jamat reported
in 364 ITR 31, we are of the opinion that the
Tribunal has committed an error in dismissing
the appeal filed by the assessee trust.
16. If we analyse Section 12AB of the Act,
it provides for procedure for fresh
registration by a trust under the Act and is
inserted by the Taxation and Other Laws
(Relaxation and Amendment of Certain
Provisions) Act, 2020 with effect from
01.04.2021 because earlier section 12AB was
inserted by the Finance Act, 2020 with
effect from 01.06.2020 and later on omitted
by the Taxation and Other Laws (Relaxation
and Amendment of Certain Provisions) Act,
2020 with retrospective effect from
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01.06.2020. Section 12AB(1) reads as under:
“12AB. (1) The Principal
Commissioner or Commissioner, on
receipt of an application made under
clause (ac) of sub-section (1) of
section 12A, shall,-
(a) where the application is made
under sub-clause (1) of the said
clause, pass an order in writing
registering the trust or institution
for a period of five years;
b) where the application is made
under sub-clause (ii) or sub-clause
(iii) or sub-clause (iv) or sub-
clause (v) [or item (B) of sub-
clause (vi)] of the said clause,-
(i) call for such documents or
information from the trust or
institution or make such inquiries
as he thinks necessary in order to
satisfy himself about-
(A) the genuineness of activities of
the trust or institution; and
(B) the compliance of such
requirements of any other law for
the time being in force by the trust
or institution as are material for
the purpose of achieving its
objects;
(ii) after satisfying himself about
the objects of the trust or
institution and the genuineness of
its activities under item (A) and
compliance of the requirements under
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item (B), of sub-clause (1),-
(A) pass an order in writing
registering the trust or institution
for a period of five years; or
[(B) if he is not so satisfied, pass
an order in writing.-
(I) in a case referred to in sub-
clause (ii) or sub-clause (iii) or
sub-clause (v) of clause (ac) of
sub-section (1) of section 12A
rejecting such application and also
cancel-ling 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, reject-ing such
application,
after affording a reasonable
opportunity of being heard;]
[(c) where the application is made
under item (A) of sub-clause (vi) of
the said clause or the application
is made under sub-clause (vi) of the
said clause, as it stood immediately
before its amendment vide the
Finance Act, 2023, pass an order in
writing provisionally registering
the trust or institution for a
period of three years from the
assessment year from which the
registration is sought,]
and send a copy of such order to the
trust or institution:
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[Provided that where an application
is made under sub-clauses (1) to (v)
of the said clause, and the total
income of such trust or institution,
without giving effect to the
provisions of sections 11 and 12,
does not exceed rupees five crores
during each of the two previous
years, preceding the previous year
in which such application is made,
the provisions of this sub-section
shall have effect as if for the
words “five years”, the words “ten
years” had been substituted.”
On perusal of the above provision, it is
clear that the Principal Commissioner or
Commissioner, on receipt of an application
made under clause (ac) of sub-section(1) of
section 12A of the Act has to decide the same
depending upon under which sub-clause of
clause (ac) of section 12A(1) of the Act,
application is made. Section 12AB(1)(a) of
the Act provides that when application is
made under sub-clause (i) of clause 12A(1)
(ac), Commissioner shall pass an order in
writing registering the trust or institution
for a period of five years. Therefore, it
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would be germane to refer to the provisions
of section 12A(1)(ac)of the Act which reads
as under:
“(ac) notwithstanding anything
contained in clauses (a) to (ab),
the person in receipt of the income
has made an application in the
prescribed form and manner to the
Principal Commissioner or
Commissioner, for registration of
the trust or institution,-
(i) where the trust or institution
is registered under section 12A [as
it stood immediately before its
amendment by the Finance (No. 2)
Act, 1996 (33 of 1996)] or under
section 12AA [as it stood
immediately before its amendment by
the Taxation and Other Laws
(Relaxation and Amendment of Certain
Provisions) Act, 2020 (38 of 2020)],
within three months from the first
day of April, 2021;
(ii) where the trust or institution
is registered under section 12AB for
approved under sub-clause (iv) or
sub-clause (v) or sub-clause (vi) or
sub-clause (via) of clause (230) of
section 10] and the period of the
said registration [or approval, as
the case may be,] is due to expire,
at least six months prior to expiry
of the said period;
(iii) where the trust or institution
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has been provisionally registered
under section 12AB [or provisionally
approved under sub-clause (iv) or
sub-clause (v) or sub-clause (vi) or
sub-clause (via) of clause (230) of
section 10], at least six months
prior to expiry of period of the
provisional registration [or
provisional approval, as the case
may be,] or within six months of
commencement of its activities,
whichever is earlier,
(iv) where registration of the trust
or institution has become
inoperative due to the first proviso
to sub-section (7) of section 11, at
least six months prior to the
commencement of the assessment year
from which the said registration is
sought to be made operative;
(v) where the trust or institution
has adopted or undertaken
modifications of the objects which
do not conform to the conditions of
registration, within a period of
thirty days from the date of the
said adoption or modification;
[(vi) in any other case, where
activities of the trust or
institution have-
(A) not commenced, at least one
month prior to the commencement of
the previous year relevant to the
assessment year from which the said
registration is sought;
(B) commenced and no income or part
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thereof of the said trust or
institution has been excluded from
the total income on account of
applicability of sub-clause (iv) or
sub-clause (v) or sub-clause (vi) or
sub-clause (via) of clause (230) of
section 10, or section 11 or section
12, for any previous year ending on
or before the date of such
application, at any time after the
commencement of such activities,]
and such trust or institution is
registered under section 12AB:]
[Provided that where the application
is filed beyond the time allowed in
sub-clauses (1) to (vi), the
Principal Commissioner or
Commissioner may, if he considers
that there is a reasonable cause for
delay in filing the application,
condone such delay and such
application shall be deemed to have
been filed within time;]”
17. So far as the facts of the present case
are concerned, it would fall under clause(b)
of section 12AB(1) of the Act as the assessee
has made an application under sub-clause(iii)
of section 12A(1)(ac) and when such an
application is made, the Principal
Commissioner or Commissioner is required to
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call for the documents or information from
the trust or institution or make such
inquiries as he thinks necessary, in order to
satisfy two aspects, first, the genuineness
of activities of the trust or institution and
second, compliance of such requirements of
any other law for the time being in force by
the trust or institution as are material for
the purpose of achieving its objects. Apart
from these two verifications, to arrive at
the satisfaction about the objects of the
trust or institution and genuineness of the
activities, the Commissioner is not required
to further investigate about the application
of the funds by the trust to avail exemption
under sections 11 and 12 of the Act.
18. Therefore, reference to sub-section(4) of
section 12AB of the Act by the CIT(E) on the
ground that provisional registration was
granted to the trust, would not be applicable
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to the facts of the case as if the said
registration or provisional registration of
the trust is required to be considered then
same ought to have been granted under clause
(a) or clause (b) or clause (c) of sub-
section(1) or clause (b) of sub-section(1)
of section 12AA as the case may be, whereas
in the facts of the case, the registration
ought to have been granted under section
12AB(1)(d) of the Act.
19. Section 12AB(4) of the Act would apply for
reconsideration of registration or
provisional registration which has been
granted under clause (a) or clause (b) or
clause (c) of sub-section(1) or clause (b) of
sub-section(1) of section 12AA which is
applicable to the registration or provisional
registration granted prior to amendment or
insertion of section 12AB of the Act.
Therefore, invocation of section 12AB(4) of
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the Act would not be applicable in the facts
of the case and therefore, on that count also
the impugned orders passed by CIT(E) as well
as the Tribunal cannot be sustained.
20. We therefore, answer the questions in
affirmative i.e. in favour of the assessee
and against the Revenue. Tax Appeal stands
disposed of accordingly.
(BHARGAV D. KARIA, J)
(PRANAV TRIVEDI,J)
RAGHUNATH R NAIR
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