THIRUMURUGAN KALVI ARAKKATTALAI,CHENNAI vs. SHRI. RAVI RAMACHANDRAN COMMISSIONER OF INCOME TAX (EXEMPTION), CHENNAI

This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Exemption), Chennai, dated 30.03.2023.

Brief facts of the case are that the assessee filed an online application on 29.09.2022 in Form No. 10AB under section 80G(5)(iii) of the Income Tax Act, 1961 [“Act” in short] seeking approval under section 80G of the Act. The ld. CIT(E) rejected the application filed by the assessee in Form No. 10AB on the ground that the assessee has obtained approval under section 10(23C)(vi) of the Act from Principal Commissioner of Income Tax [“PCIT” in short] on 24.09.2021 with the only one object i.e. “Education”. However, the assessee, while applying for approval under section 80G of the Act on 29.09.2022, has added two more objects such as relief to poor and medical relief without any verification or mention in the trust deed. The assessee could not explain this contradiction satisfactorily and therefore, the ld. CIT(E) rejected the application filed by the assessee in Form No. 10AB for approval under section 80G of the Act.

Aggrieved by the order of the ld. CIT(E), the assessee is in appeal before the Tribunal.

The ld. Counsel for the assessee Shri H. Yeshwanth Kumar, CA, referring to the copy of Trust deed dated 05.04.2007 and copy of amended deed dated 01.12.2015 and submitted that initially the objects of the trust were relief of poor, education and medical relief. But, the assessee-trust has amended the objects by a trust deed dated 01.12.2015, and deleted two objects namely, relief of poor and medical relief and retained only one object namely “Education”. Further, while filing application under section 10(23C)(vi) of the Act, the assessee has rightly mentioned as main object “Education” as per amended deed dated 01.12.2015. While filing form 10AB under section 80G(5)(iii) of the Act, by inadvertent error, it was mentioned all three objects of trust deed dated 05.04.2007. This anomaly has been brought to the notice of the ld. CIT(E) by filing both trust deeds, but, the ld. CIT(E) rejected the application filed by the assessee. Therefore, the ld. Counsel prayed that the assessee may be given an opportunity to explain before the ld. CIT(E) and requested to set aside the appeal to the file of the ld. CIT(E).

On the other hand, the ld. DR Shri Nilay Baran Som, CIT, fairly agreed that to verify the fact in the light of both deeds, the issue may be remitted back to the file of ld. CIT(E) and to decide the issue in accordance with law.

We have heard both the sides, perused the materials available on record and gone through the order of the ld. CIT(E). There is no dispute to the fact that the main objects of the assessee as per Trust deed dated 05.04.2007 were relief of poor, education and medical relief. It is also an undisputed fact that the assessee has amended the trust deed dated 01.12.2015 and deleted two objects i.e., relief of poor and medical relief and retain only one object of “Education”. Although, the assessee has amended the main object, but claimed that by an inadvertent error while filing Form No. 10AB, it was wrongly stated the object of the trust was relief of poor, education and medical relief. We find that as per amended deed dated 01.12.2015, the main object is only “Education” as stated in application filed under section 10(23C)(vi) of the Act and in Form No. 10AC issued by the ld. PCIT. It seems that by an inadvertent error, the assessee has referred to all the objects including the objects deleted by way of amended deed dated 01.12.2015. When this fact was brought to the notice of the ld. CIT(E), in our considered opinion, the ld. CIT(E) ought to have considered application filed by the assessee in light of Form No. 10AC issued by the ld. PCIT dated 24.09.2021. Since, the ld. CIT(E) rejected the application of the assessee without considering arguments of the assessee in light of amended deed, we are of the considered opinion that the appeal should go back to the file of the ld. CIT(E). Accordingly, we restore appeal back to the file of the ld. CIT(E) for fresh adjudication in light of various evidences that may be filed by the assessee to justify its case towards seeking approval under section 80G of the Act.

In the result, the appeal filed by the assessee is allowed for statistical purposes.