SRI RAM EDUCATIONAL TRUST ,BENGALURU vs. COMMISSIONER OF INCOME TAX, (EXEMPTIONS), BENGALURU

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ITA 1866/BANG/2025Status: DisposedITAT Bangalore25 May 2026AY 2025-269 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the assessee had no control over admissions for EWS students under RTE and that the fire safety compliance was renewed after the rejection order. The matter of fire safety clearance was remitted back to the CIT(Exemptions) for reconsideration.

What were the facts?

The assessee trust applied for registration under Section 12AB and approval under Section 80G. The CIT(Exemptions) rejected the applications citing failure to provide free education to EWS students and lack of fire safety clearance.

What were the issues?

Whether the trust fulfilled the conditions for registration under Section 12AB and approval under Section 80G, specifically regarding EWS admissions and fire safety compliance.

Which sections of the Income-tax Act were involved?

Section 12AB,Section 80G

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B’’ BENCH: BANGALORE

Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY

Hearing: 30.03.2026Pronounced: 25.05.2026

PER KESHAV DUBEY, JUDICIAL MEMBER:

These appeals at the instance of the assessee are directed against the separate orders of ld. CIT(Exemptions), Bengaluru both dated 30.06.2025 vide DIN & Notice No. ITBA/EXM/F/EXM45/2025-26/1078056766(1) rejecting the registration u/s 12AB of the Income Tax Act, 1961 (in short “The Act”) & vide DIN & Notice No. ITBA/EXM/F/EXM45/2025- 26/1078056851(1) rejecting the approval u/s 80G of the Act. Since the issue involved in both these appeals is common in nature, these are clubbed together, heard together and disposed of by this common order for the sake of convenience and brevity.

ITA Nos.2206 & 2207/Bang/2026 Shri Gurushanthi Dhama Charitable Trust, Bengaluru Page 2 of 9 3. First, we take the assessee’s appeal in ITA No.1866/Bang/2025 wherein the assessee has raised following grounds of appeal--------:

ITA Nos.2206 & 2207/Bang/2026 Shri Gurushanthi Dhama Charitable Trust, Bengaluru Page 3 of 9

4.

The assessee has raised following grounds of appeal in ITA No.1867/Bang/2025:

ITA Nos.2206 & 2207/Bang/2026 Shri Gurushanthi Dhama Charitable Trust, Bengaluru Page 4 of 9

ITA Nos.2206 & 2207/Bang/2026 Shri Gurushanthi Dhama Charitable Trust, Bengaluru Page 5 of 9

5.

The brief facts of the case are that upon receipt of application in Form 10AB dated 31.12.2024, the assessee was granted opportunity of being heard by the ld. PCIT (Exemptions). During the course of proceedings, the assessee submitted certain approvals for running a school from LKG to Grade X in two buildings i.e. a recognition certificate from the school education department at the local level issued in Form II dated 13.5.2024, which was also reproduced by the ld. CIT(Exemptions) in his order. The main contention of the ld. CIT (Exemptions) is that as per paragraph 3 of the recognition certificate, the school is mandated to have atleast

ITA Nos.2206 & 2207/Bang/2026 Shri Gurushanthi Dhama Charitable Trust, Bengaluru Page 6 of 9 25% of the students from economically weaker sections (EWS) and disadvantaged groups from the neighborhood and must provide free and compulsory education to them until the completion of elementary education. However, during the course of hearing, the assessee accepted that they are not providing free education to any students, which in the opinion of ld. CIT (Exemptions) is a gross violation of the conditions laid down in their own statutory recognition certificate.

5.1 Further, during the course of hearing, the assessee claimed that they are in line with the State Education Department since 2019 and therefore, they need not give free education to 25% of the children. In support, the assessee had submitted the circular dated 28.2.2019 in Kannada language. The ld. CIT(A) noted that as per the communication, it is mandated that before inviting application for eligible candidates under RTE Act, authorities must ensure that there are no government or aided schools in the nearby area. On further perusal of the same, it is apparent as per paragraph 3 that institution like LKG & UKG will not be covered in the list. In view of the above, specifically para 3, the ld. CIT (Exemptions) held that this particular institution is not exempt as being claimed.

5.2 Further, ld. CIT (Exemptions) observed that the assessee does not possess fire safety clearance for the main building. This lack of essential safety clearance and failure to address the enquiry demonstrate a significant non-compliance with the requirements of any other law for the time being in force which are material for achieving the trust’s educational and charitable objects. Therefore, due to these fundamental failures to adhere to statutory conditions and regulatory requirements essential for a charitable educational institution including the failure to provide free education to the EWS and disadvantaged students as explicitly required by its recognition

ITA Nos.2206 & 2207/Bang/2026 Shri Gurushanthi Dhama Charitable Trust, Bengaluru Page 7 of 9 certificate, the absence of fire safety clearance for the main building and the non-response to show cause notice regarding this, the assessee has failed to satisfy the conditions regarding the genuineness of its activities and compliance with requirements of other material laws. In view of the above, the application in Form 10AB dated 31.12.2024 filed for both registration u/s 12AB of the Act as well as approval u/s 80G(5) of the Act were rejected.

6.

Aggrieved by the aforesaid orders of ld. CIT (Exemptions), the assessee has filed the present appeals before this Tribunal.

7.

Before us, the ld A.R. of the assessee vehemently submitted that assessee trust is running with a object of “education” which is a charitable in nature. Further, ld. A.R. submitted that the ld. CIT(Exemptions) rejected both the applications of the assessee on citing the same reasons for rejection. Further, ld. A.R. submitted that the entire foundation of rejection is the assessee is engaged in general public utility whereas the assessee is pursuing the charitable activity of education and assessee is not coming under the purview of “general public utility”. Lastly, ld. A.R. submitted that assessee is providing free education to the EWS and there were no students who had opted under the RTE for the purpose of admissions and therefore, ld. CIT (Exemptions) was not justified in rejecting the registration on this count. Further, ld. A.R. submitted that the assessee has already renewed the fire safety compliance on 4.7.2025, however, the same could not be produced before the ld. CIT (Exemptions).

8.

The ld. D.R. on the other hand, relied on the orders of the authority below.

ITA Nos.2206 & 2207/Bang/2026 Shri Gurushanthi Dhama Charitable Trust, Bengaluru Page 8 of 9 9. We have heard the rival submissions and perused the materials available on record. Undisputedly, the ld. CIT (Exemptions) had rejected the registration u/s 12AB of the Act as well as approval u/s 80G(5) of the Act by stating the same reason for rejection. On going through the order of ld. CIT (Exemptions) we observed that there are two contentions for the rejections which are given below: i. Failure to provide free education to EWS and disadvantaged students as explicitly required by its recognition certificate. ii. Absence of fire safety clearance 9.1 Undisputedly, the assessee trust is into the activity of charitable purpose which includes education u/s 2(15) of the Act. The ld. CIT (Exemptions) on the ground that as per the right to education (RTE), the assessee has failed to provide free education to economically weaker section (EWS), had rejected the application of the assessee. We agree with the contention of the ld. A.R. of the assessee that the assessee was available for providing free education to economically weaker sections however, there were no students who had opted under the RTE for the purpose of admissions and therefore, the assessee have no control on such admissions. Further, we also agree with the contention of the ld. A.R. of the assessee that those students who have been admitted as per the RTE in the earlier years are still continuing and taking the benefit of education from the assessee trust and there was no violation as alleged by the ld. CIT(Exemptions).

9.2 Further, with regard to non-compliance with fire safety regulations, the ld. A.R. of the assessee produced the renewal of fire safety compliance dated 4.7.2025 and prayed that the assessee was not given sufficient opportunity of being heard before passing the rejection order. This being so, in the interest of justice, equity and fair play and as requested by the ld. A.R. of the assessee we deem it fit and proper to remit this issue to the file of ld. CIT (Exemptions) to

ITA Nos.2206 & 2207/Bang/2026 Shri Gurushanthi Dhama Charitable Trust, Bengaluru Page 9 of 9 consider the renewal of fire safety compliance report dated 4.7.2025 in accordance with law. Needless a reasonable opportunity of being heard must be granted to the assessee. It is ordered accordingly.

10.

In the result, both these appeals filed by the assessee are partly allowed for statistical purposes.

Order pronounced in the open court on 25th May, 2026

Sd/- Sd/- (Waseem Ahmed) (Keshav Dubey) Accountant Member Judicial Member

Bangalore, Dated 25th May, 2026. VG/SPS

Copy to:

1.

The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order

Asst. Registrar, ITAT, Bangalore.

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