MAX ACADEMY FOR EXCELLENCE,CHOOLAIMEDU vs. COMMISSIONER OF INCOME TAX (EXEMPTION), NUNGAMBAKKAM

Since identical facts and issues are involved in both these appeals, these appeals were heard together and disposed of by this common order. For the sake of clarity and convenience the facts relevant in the ITA No.1874/CHNY/2026 for the Assessment Year 2026-27 are stated herein:

The Assessee in ITA No.1874/CHNY/2026 raised the following grounds of appeal :

Briefly the facts of the case are that the appellant is a Trust registered under Trust Act in the year 1993. It was formed with the object of providing skill and personality training to students. It was duly registered u/s.12A of the Income Tax Act on 29.01.1997 and it also got renewal of registration u/s.12A(a) of the Act vide order dated 31.12.2021. Subsequently, the appellant trust filed an application in Form 10AB on 15.07.2025 u/s.12A(1)(ac)(ii) of the Income Tax Act, 1961 seeking the renewal of registration under the provisions of 12AB of the Act.

On receipt of the said application, the ld.CIT(E)- Chennai had called- for certain information. In response to the said notices, the appellant had filed information filed a detailed explanation on consideration of the explanation filed by the appellant, the ld.Commissioner had come to conclusion that the activities of the trust are not in the nature of providing education placing reliance on the decision of Hon’ble Supreme Court in the case of sole trustee, Lokashikshana Trust vs. CIT [1975] 101 ITR 234 and further observed that for the last preceding three financial years, the appellant trust had not received any voluntary contribution. Based on these conclusions reached by the ld.Commissioner, he inferred that the activities of the trust are not genuine, accordingly rejected the registration under the provisions of section 12Ab of the Act.

Being aggrieved, the appellant is in appeal before us in the present appeal. The ld.AR Mr.J.K.Reddy submits that the appellant trust was formed primarily with the object of promoting education for the benefit of public at large and the trust was charging very nominal fees to recover cost of the services only. The Trust has been providing skill and personality training to students in the Government School in Tamilnadu and Andhra Pradesh. He further submitted that when the dominant object is charitable, incidental income or basis activity does not limit the character of the activities. In this regard, we place reliance on the following decisions :  Institute of Chartered Accountants of India Vs. DGIT(E) 347 ITR 99 (Del)  Bureau of Indian Standards Vs. DGIT(E) 358 ITR 78 (Del)  CIT Vs. Lucknow Development Authority 219 Taxman 162 (All)  Sabarmati Ashram Gaushala Trust vs. ADIT 25 ITR 70 (Ahd Trib)

On the other hand, ld.CIT-DR passed the above submission and submits that the activities of the trust are commercial in nature and does not qualify to be charitable in nature. Therefore, the ld.CIT(E) rightly denied the registration, hence, no interference in the order of ld.CIT(E) is required.

We heard rival submissions and perused the material on record. The issue that arises in the present appeal is whether the ld.CIT(E) was justified in not granting the registration u/s.12AB of the Income Tax Act. On mere perusal of the impugned order, it would be evident that the ld.Commissioner had concluded that the activities of the appellant trust are not in the nature of education as it is not engaged in systematic instruction schooling and training given to young in preparation for the work of life. Even if the activities of the trust does not fall within the ambit of education, undoubtedly it falls under general public utility services and mere receipt of the nominal fee to recover the expenses does not amount to commercial activity as held by the following decisions :  Institute of Chartered Accountants of India Vs. DGIT(E) 347 ITR 99 (Del)  Bureau of Indian Standards Vs. DGIT(E) 358 ITR 78 (Del)  CIT Vs. Lucknow Development Authority 219 Taxman 162 (All)  Sabarmati Ashram Gaushala Trust vs. ADIT 25 ITR 70 (Ahd Trib)

Therefore, there is no material brought on record by the ld.CIT(E) to conclude that the activities of the trust are not genuine. Therefore, we direct the ld.CIT(E) to grant registration u/s.12AB of the Income Tax Act from the date of application.

Accordingly, appeal filed by the assessee in ITA No.1874/CHNY/2026 is allowed.

From the perusal of the ld.CIT(E) order, we observe that ld.CIT(E) denied the grant of approval u/s.80G(5) of the Act, merely for the reason that the appellant trust was denied registration u/s.12AB of the Act. In the appeal above in ITA No.1874/CHNY/2026, we directed the ld.CIT(E) to grant the registration, therefore, following the parity of the same reasoning, we direct the ld.CIT(E) to grant approval u/s.80G(5) of the Act from the date of application.

In the result, appeal filed by the assessee in ITA No.1875/CHNY/2026 is allowed. Order pronounced in the open Court on 7th May, 2026. (INTURI RAMA RAO) ACCOUNTANT MEMBER Chennai; "दनांक / Dated : 7th May, 2026 SGR, Sr.PS आदेश क" ""त"ल"प अ"े"षत / Copy of the Order forwarded to : अपीलाथ" / The Appellant.