The CIT(E) has rejected my Form 10AB and cancelled my provisional registration on the ground that my objects benefit only one religious community. What is the Revenue's case and how does it succeed?
It succeeds where the objects on their face are confined to one community and the trust files no evidence that it has not incurred expenditure on those objects. The Tribunal dismissed the appeal, finding no infirmity in an order which rejected the Form 10AB application under s.12A(1)(ac)(iii) and cancelled the provisional registration on the footing of a specified violation under clause (d) of the Explanation to s.12AB(4).
Decided by the ITAT (Dinesh Mohan Sinha, Judicial Member and Bijayananda Pruseth, Accountant Member — ITAT Surat Bench) on 2025-10-15, reported as ITA No.1326/SRT/2024. It bears on section 12AB, section 12AB(4), section 12A, section 12A(1)(ac)(iii), section 2(15), section 13(1)(b), section 11 of the Income Tax Act 1961, in Charitable Trusts & Exemption and Capital Gains Exemptions matters.
This is the Revenue side of the registration line and it shows how clause (d) is used. Clause (d) makes it a specified violation where a trust established for charitable purpose, created or established after the commencement of the Act, has applied any part of its income for the benefit of any particular religious community or caste. Two things about the way it was applied here repay attention. First, the burden was placed on the applicant: the CIT(E) required corroborative evidence that no expenditure had been incurred on the disputed objects, and it was the absence of that evidence, not a positive finding of application, that decided the appeal. Second, the Form 10AB itself described the nature of the activities as 'Religious', and neither the CIT(E)'s reasoning as reproduced nor the Tribunal's addresses whether a religious trust falls within clause (d) or within s.13(1)(b) at all, both of which are in terms confined to trusts for charitable purpose. The Departmental Representative's argument rested on s.13(1)(b). A trust in this position should not assume the point is closed.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The waqf filed an application in Form 10AB under s.12A(1)(ac)(iii) for registration under s.12AB. The CIT(E) issued three notices, on 25 July 2024, 6 November 2024 and 14 November 2024, calling for details. On the material filed he found that the objects were confined to the benefit of the Muslim community and not to the public at large, issued a show-cause notice requiring the applicant to explain how the objects fell within s.2(15), and issued a further notice requiring evidence that no expenditure had been incurred for the benefit of any particular religious community or caste. The applicant replied that although the objects were oriented towards the needs of the Muslim community they fulfilled critical societal purposes such as education, healthcare and poverty alleviation which ultimately benefit society as a whole. The CIT(E) found the objects were for the benefit of Muslims, Muslim students and Muslim patients only, held that the grant of provisional registration by the CPC did not establish that the applicant was established or working for the public at large, and found a specified violation under clause (d) of the Explanation to s.12AB(4); he rejected the Form 10AB application and cancelled the provisional registration by order dated 23 November 2024. Before the Tribunal the Departmental Representative relied on s.13(1)(b) and on the objects, and pointed to page 6 of the CIT(E)'s order. The Form 10AB filed with Form 36 described the nature of activities as 'Religious', and the objects as recorded by the Tribunal were help to the Muslim Yatim Khana and religious institutions, help to poor Muslims, help to Muslim students, help to a Sarwajanik hospital or Dawakhana or Muslim patients, and help to poor Muslims for Katan Latan.
Appeal dismissed. Having regard to the objects and to the absence of any details with corroborative evidence that the trust had not incurred expenditure on objects confined to the benefit of Muslims, Muslim students and Muslim patients, the Tribunal found no infirmity in the order of the CIT(E) rejecting the Form 10AB application under s.12A(1)(ac)(iii) and cancelling the provisional registration, and dismissed the grounds (paras 6 and 7).
The Tribunal's reasoning is contained in paragraph 6. It began from the Form 10AB itself, which described the nature of the activities as 'Religious', and then set out the five objects, each of which identified its beneficiaries by community. Against that it placed the applicant's failure to file any details with corroborative evidence that it had not incurred expenditure towards objects confined to the benefit of Muslims, Muslim students and Muslim patients. In the absence of those details and supporting evidence it found no infirmity in the CIT(E)'s order and dismissed the grounds. The CIT(E)'s route, as recorded at paragraph 3, was that the objects were not for the public at large, that provisional registration by the CPC established nothing, that it was incumbent on the applicant to prove with corroborative evidence that no expenditure had been incurred on the disputed objects, and that there was accordingly a specified violation under clause (d) of the Explanation to s.12AB(4).
Therefore, in absence of necessary details with supporting evidences, we do not find any infirmity in the order passed by Ld.CIT(E).
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Handle my notice → Ask a CA on WhatsAppIt succeeds where the objects on their face are confined to one community and the trust files no evidence that it has not incurred expenditure on those objects. The Tribunal dismissed the appeal, finding no infirmity in an order which rejected the Form 10AB application under s.12A(1)(ac)(iii) and cancelled the provisional registration on the footing of a specified violation under clause (d) of the Explanation to s.12AB(4). This was decided by the ITAT (Dinesh Mohan Sinha, Judicial Member and Bijayananda Pruseth, Accountant Member — ITAT Surat Bench) and bears on section 12AB, section 12AB(4), section 12A, section 12A(1)(ac)(iii), section 2(15), section 13(1)(b), section 11 of the Income Tax Act 1961. It is reported as ITA No.1326/SRT/2024. This is the Revenue side of the registration line and it shows how clause (d) is used. Clause (d) makes it a specified violation where a trust established for charitable purpose, created or established after the commencement of the Act, has applied any part of its income for the benefit of any particular religious community or caste. Two things about the way it was applied here repay attention. First, the burden was placed on the applicant: the CIT(E) required corroborative evidence that no expenditure had been incurred on the disputed objects, and it was the absence of that evidence, not a positive finding of application, that decided the appeal. Second, the Form 10AB itself described the nature of the activities as 'Religious', and neither the CIT(E)'s reasoning as reproduced nor the Tribunal's addresses whether a religious trust falls within clause (d) or within s.13(1)(b) at all, both of which are in terms confined to trusts for charitable purpose. The Departmental Representative's argument rested on s.13(1)(b). A trust in this position should not assume the point is closed. If it applies to you, the first step is this: Read the objects clause as a stranger would. Where the beneficiaries are described by community throughout, a submission that the activities are education, healthcare and poverty alleviation which benefit society as a whole will not by itself answer the objection — it did not here.
The waqf filed an application in Form 10AB under s.12A(1)(ac)(iii) for registration under s.12AB. The CIT(E) issued three notices, on 25 July 2024, 6 November 2024 and 14 November 2024, calling for details. On the material filed he found that the objects were confined to the benefit of the Muslim community and not to the public at large, issued a show-cause notice requiring the applicant to explain how the objects fell within s.2(15), and issued a further notice requiring evidence that no expenditure had been incurred for the benefit of any particular religious community or caste. The applicant replied that although the objects were oriented towards the needs of the Muslim community they fulfilled critical societal purposes such as education, healthcare and poverty alleviation which ultimately benefit society as a whole. The CIT(E) found the objects were for the benefit of Muslims, Muslim students and Muslim patients only, held that the grant of provisional registration by the CPC did not establish that the applicant was established or working for the public at large, and found a specified violation under clause (d) of the Explanation to s.12AB(4); he rejected the Form 10AB application and cancelled the provisional registration by order dated 23 November 2024. Before the Tribunal the Departmental Representative relied on s.13(1)(b) and on the objects, and pointed to page 6 of the CIT(E)'s order. The Form 10AB filed with Form 36 described the nature of activities as 'Religious', and the objects as recorded by the Tribunal were help to the Muslim Yatim Khana and religious institutions, help to poor Muslims, help to Muslim students, help to a Sarwajanik hospital or Dawakhana or Muslim patients, and help to poor Muslims for Katan Latan. The matter was decided on 2025-10-15 by the ITAT (Dinesh Mohan Sinha, Judicial Member and Bijayananda Pruseth, Accountant Member — ITAT Surat Bench). On those facts the ITAT held as follows. Appeal dismissed. Having regard to the objects and to the absence of any details with corroborative evidence that the trust had not incurred expenditure on objects confined to the benefit of Muslims, Muslim students and Muslim patients, the Tribunal found no infirmity in the order of the CIT(E) rejecting the Form 10AB application under s.12A(1)(ac)(iii) and cancelling the provisional registration, and dismissed the grounds (paras 6 and 7).
The Tribunal's reasoning is contained in paragraph 6. It began from the Form 10AB itself, which described the nature of the activities as 'Religious', and then set out the five objects, each of which identified its beneficiaries by community. Against that it placed the applicant's failure to file any details with corroborative evidence that it had not incurred expenditure towards objects confined to the benefit of Muslims, Muslim students and Muslim patients. In the absence of those details and supporting evidence it found no infirmity in the CIT(E)'s order and dismissed the grounds. The CIT(E)'s route, as recorded at paragraph 3, was that the objects were not for the public at large, that provisional registration by the CPC established nothing, that it was incumbent on the applicant to prove with corroborative evidence that no expenditure had been incurred on the disputed objects, and that there was accordingly a specified violation under clause (d) of the Explanation to s.12AB(4). In the words reproduced by the source cited on this page: "Therefore, in absence of necessary details with supporting evidences, we do not find any infirmity in the order passed by Ld.CIT(E)."
It was decided by the ITAT on 2025-10-15 and is reported as ITA No.1326/SRT/2024. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 12AB, section 12AB(4), section 12A, section 12A(1)(ac)(iii), section 2(15), section 13(1)(b), section 11, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the department, and it appears in this library for that reason — you need to know what the Assessing Officer will cite against you. Appeal dismissed. Having regard to the objects and to the absence of any details with corroborative evidence that the trust had not incurred expenditure on objects confined to the benefit of Muslims, Muslim students and Muslim patients, the Tribunal found no infirmity in the order of the CIT(E) rejecting the Form 10AB application under s.12A(1)(ac)(iii) and cancelling the provisional registration, and dismissed the grounds (paras 6 and 7). It arises in Charitable Trusts & Exemption and Capital Gains Exemptions matters, on section 12AB, section 12AB(4), section 12A, section 12A(1)(ac)(iii), section 2(15), section 13(1)(b), section 11 of the Income Tax Act 1961, and was decided by Dinesh Mohan Sinha, Judicial Member and Bijayananda Pruseth, Accountant Member — ITAT Surat Bench. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Meet the evidential demand head on: produce accounts, vouchers and beneficiary lists showing what was actually spent and on whom. The appeal failed on absence of corroborative evidence, not on the construction of the objects. Identify precisely which clause of the Explanation to s.12AB(4) is invoked and hold the Commissioner to it; clause (d) is confined to a trust established for charitable purpose created or established after the commencement of the Act, and requires that income has been applied for the benefit of a particular religious community or caste. If the trust is in truth religious, take that as a distinct point at the earliest stage, on the wording of clause (d) and of s.13(1)(b), and record the basis on which the Form 10AB described the nature of activities. Where an unfavourable order is likely, weigh the s.115TD consequence of losing registration before letting the matter go to a rejection rather than seeking to amend the objects.
Validity check could not be completed. Validity check could not be completed — I did not search for any later treatment or for any appeal. The decision turns on an absence of evidence rather than on a general proposition, and the Tribunal did not consider whether clause (d) of the Explanation to s.12AB(4), or s.13(1)(b), applies to a trust whose activities are described as religious; both provisions are in terms directed at trusts for charitable purpose. I did not read CIT v Dawoodi Bohara Jamat on this pass and express no view on how it bears on the point. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The order runs to seven numbered paragraphs, which I established by transcribing the opening words of each and then the full text. The Tribunal's own reasoning is paragraph 6 alone and is short; the substance of the case is in the CIT(E)'s order as summarised at paragraph 3. Clause (d) of the Explanation to s.12AB(4), on the departmental text at /w/section-12ab-7 (Year 2026), applies to a trust or institution "established for charitable purpose created or established after the commencement of this Act" which has applied any part of its income for the benefit of any particular religious community or caste; neither the CIT(E)'s order as reproduced nor the Tribunal's paragraph 6 records a finding on the date of creation, and neither addresses the fact recorded in the same paragraph that the Form 10AB described the nature of activities as "Religious". The order refers at one point to a "specific violation" where "specified violation" is meant. I did not read CIT v Dawoodi Bohara Jamat or CIT v Bayathkutchhi Dasa Oswal Jain Mahajan Trust, on which the CIT(E) relied; Dawoodi Bohara Jamat is already in the library. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
Appeal dismissed. Having regard to the objects and to the absence of any details with corroborative evidence that the trust had not incurred expenditure on objects confined to the benefit of Muslims, Muslim students and Muslim patients, the Tribunal found no infirmity in the order of the CIT(E) rejecting the Form 10AB application under s.12A(1)(ac)(iii) and cancelling the provisional registration, and dismissed the grounds (paras 6 and 7).
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