AKHILA VISHW BHARATHIYA SEVA SAMAJ,VIDYARANYAPURAM, MYSORE vs. COMMISSIONER OF INCOME TAX (EXEMPTIONS) BANGALORE, BENGALURU KARNATAKA

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ITA 2885/BANG/2025Status: HeardITAT Bangalore10 July 2026AY 2025-265 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the assessee failed to respond to the CIT(E)'s notices, leading to an ex parte rejection. To ensure justice, the Tribunal restored the application to the CIT(E) for fresh adjudication, allowing the assessee another opportunity to present its case and documents.

What were the facts?

The assessee applied for registration under Section 80G, but the CIT(Exemptions) rejected it, citing predominantly religious activities and lack of documentary evidence. The assessee argued that religious expenditure was less than 5% of total income.

What were the issues?

Whether the rejection of the Section 80G application was justified, considering the assessee's activities and the procedural fairness of the assessment.

Which sections of the Income-tax Act were involved?

Section 80G

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH : BANGALORE

Before: SHRI WASEEM AHMED & SHRI SANDEEP SINGH KARHAIL

For Appellant: Shri. Siddesh Gaddi, AR, Shri Somnath S Ukkali, CIT(DR)

PER SANDEEP SINGH KARHAIL, JUDICIAL MEMBER 1. The assessee has filed the present appeal against the impugned order dated 24.09.2025 passed by the learned CIT(Exemptions), Bangalore [“learned CIT(E)”], rejecting the application filed by the assessee seeking registration under section 80G of the Income Tax Act, 1961 (“the Act”).

2.

In this appeal, the assessee has raised the following grounds: - 1. The Learned Commissioner has erred in law and on facts in passing an order rejecting the application under section 80G of the Income-tax Act,1961, in the manner she did. Page 1 of 5

ITA No.:2885/Bang/2025

2.

The order is passed in violation of the principles of natural justice and, therefore, bad in law. 3. The Learned Commissioner has erred in law and on the facts by not appreciating the nature of the activities of the appellant. 4. The Ld. Commissioner has erred in law and on facts in stating that the Appellant has not submitted documents when the same are available on the records; 5. The Ld. Commissioner has erred in stating that the Appellant has made expenditure towards religious purposes and further erred in stating that the Appellant has not produced documentary evidence in connection with the same. 6. The Ld. Commissioner has erred in law and fact in rejecting the recognition without considering the registration under section 12A of the Act. 7. The Ld. Commissioner has erred in stating that the Appellant has violated conditions to grant recognition under section 80G of the Act. 8. The Order of the Learned Commissioner has fallen into error of facts as well as in law, as the basis of rejection is based on an incorrect assumption of facts, rendering the impugned order perverse. 3. We have considered the submissions of both sides and perused the material available on record. The assessee filed an application on 18.02.2025 in Form 10AB seeking registration under section 80G of the Act. After perusal of the application filed by the assessee, the learned CIT(E) directed the assessee to submit the necessary documents to prove the genuineness of the activities of the assessee trust and fulfilment of all the conditions laid down in clause (i) to (v) of section 80G of the Act. In the absence of any response from the assessee, the learned CIT(E) vide impugned order noted that the assessee trust is predominantly religious in nature as more than 5% of the trust’s total income has been applied towards religious expenditure, primarily temple renovation and construction. Accordingly, the learned

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CIT(E) held that institutions established for religious purposes or carrying on religious activities are not eligible for approval under section 80G of the Act. Thus, learned CIT(E) rejected the application filed by the assessee in Form 10AB for seeking approval under section 80G of the Act. Being aggrieved, the assessee is in appeal before us.

4.

During the hearing, the learned Authorised Representative (“learned AR”) submitted that the assessee fully satisfies the condition for the grant of registration under section 80G of the Act. In this regard, the learned AR referred to the receipt and payment account of the assessee for the year ending 31.03.2022, forming part of the paper book. By referring to the receipt and payment account, as noted above, the learned AR submitted that the expenditure incurred on “Pooja Expenses” is less than 5% of the assessee’s total income and therefore the assessee cannot be held to be established for religious purposes.

5.

On the other hand, the learned Departmental Representative submitted that the documents, as now placed reliance upon by the learned AR, were not examined by the learned CIT(E) as the assessee failed to respond to the hearing notice issued by the learned CIT(E). Accordingly, the learned DR submitted that all these documents need verification.

6.

Having considered the submissions of both sides and perused the material available on record, it is evident that the assessee did not respond to three hearing notices issued by the learned CIT(E) and the assessee’s Page 3 of 5

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application for seeking registration under section 80G of the Act was rejected vide ex parte order. Therefore, in the interest of justice, we deem it appropriate to grant one more opportunity to the assessee to represent its case before the learned CIT(E) and furnish all the details/information in support of its claim. Consequently, the application seeking registration under section 80G of the Act filed by the assessee is restored to the file of the learned CIT(A) for de novo adjudication after consideration of the details/submissions as may be filed by the assessee. Needless to mention, no order shall be passed without affording reasonable opportunity of hearing to the assessee. Further, the assessee is also directed to comply with all the hearing notices issued by the learned CIT(E) and furnish all the details as may be sought. With the above directions, the impugned order is set aside, and the grounds raised by the assessee are allowed for statistical purposes.

7.

In the result, the appeal by the assessee is allowed for statistical purposes. Order pronounced in the open court on 10th July, 2026 Sd/- Sd/- (WASEEM AHMED) (SANDEEP SINGH KARHAIL) ACCOUNTANT MEMBER JUDICIAL MEMBER Bangalore,

Dated, the 10th July, 2026.

*VM*

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Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. CIT(A)

By order Assistant Registrar, ITAT,Bangalore

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