SKD SOCIAL FOUNDATION,VARANASI vs. COMMISSIONER OF INCOME TAX (EXEMPTION), LUCKNOW

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ITA 203/VNS/2024Status: DisposedITAT Varanasi30 June 20264 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the CIT(Exemption)'s order, directing the CIT to reconsider the applications. The assessee was to be given a reasonable opportunity to explain its case and provide necessary verification.

What were the facts?

The assessee applied for registration under Section 12AB and approval under Section 80G. The CIT(Exemption) rejected the applications, stating the assessee had not carried out activities as per its charitable objects.

What were the issues?

Whether the CIT(Exemption) erred in rejecting the applications without providing sufficient opportunity and proper verification of the assessee's activities and objects.

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, VARANASI CIRCUIT BENCH, VARANASI

Before: SHRI KUL BHARAT & SHRI ANADEE NATH MISSHRA

For Appellant: Shri Arvind Shukla, Advocate
For Respondent: Shri Sanjay Kumar, CIT- DR

PER KUL BHARAT, VICE PRESIDENT.:

These two appeals by the assessee against the order of the Learned Commissioner of Income-tax (Exemption), Lucknow both dated 26.09.2024 rejecting the assessee’s applications for registration u/s 12AB of the Income Tax Act, 1961 (“Act”, for short) and for grant of approval u/s 80G(5) of the Act. For the sake of convenience and brevity, both the appeals were heard together and are being disposed of by this consolidated order. First, we take up the appeal ITA. No. 204/VNS /2024 is taken as a lead case. The assessee has raised following grounds of appeal:-

“1. Because the Ld. CIT(Exemption) erred in law as well as on facts in denying the registration u/s 12AB of Income-tax Act 1961 to a genuine institution engaged in charitable activities without appreciation the facts of case properly and also without giving proper opportunity of being heard.

ITA Nos. 203 & 204/VNS/2024 Page 2 of 4 2. Because the Ld. CIT(Exemption) has erred in denying the exemption u/s 12AB with frivolous remarks in contrast to the facts and evidences on record.” 2. Briefly stated the facts are that the assessee filed an application seeking for registration u/s 12AB of the Act on 18.03.2024 along with Form No. 10AB under Rule 17A of the Income Tax Rules, 1962 (“Rules”, for short). The said application came to be rejected by the Ld. CIT(E) on the basis that the assesse has not carried out any activities as per the objects of the assessee trust. Therefore, the application of the assessee was rejected. Aggrieved against this, the assessee is in appeal before this Tribunal.

3.

Apropos to the grounds of appeal, the Ld. Counsel for the assessee contended that the authorities below failed to appreciate the fact that at the time of registration the concerned authority has to satisfy itself about the nature of the objects of the assessee whether the objects are charitable or not. Therefore, he prayed that the order of the Ld. CIT(E) may be set aside and the Ld. CIT(E) be directed to grant registration u/s 12AB of the Act.

4.

On the other hand, the Ld. CIT-DR opposed the submissions and supported the order of lower authorities and submitted that there is no infirmity in the order of the Ld. CIT(E).

5.

We have heard rival submissions and perused the material available on records. It is submitted at the Bar that the assessee had subsequently commenced its activity of imparting education. This fact requires verification at the end of the Ld. PCIT. Further, it is observed that the assessee was not provided sufficient opportunity by the Ld. CIT(E). We are of the considered view that the assessee should be given an opportunity to explain

ITA Nos. 203 & 204/VNS/2024 Page 3 of 4 its case before the Ld. CIT(E) to sub-serve the principles of natural justice. Therefore, the impugned order is hereby set aside the order of the Ld. CIT(E) and restore the application filed by the assessee to the Ld. CIT(E) for considering the same. Needless to say that the Ld. CIT(E) would provide reasonable opportunity of being heard to the assessee to explain its case. Grounds of appeal of the assessee are allowed for statistical purposes.

6.

Coming to ITA.No.203/VNS/2024, the identical issues as were in ITA. No.204/VNS/2024. It is stated by the Ld. Counsel for the assessee that the facts are identical, except change into figure and the grounds are also identical in this appeal. Both the Ld. Representatives of parties have adopted the same arguments as were in ITA. No.204/VNS/2024 in this appeal also for the identical ground.

7.

Heard the Ld. Representatives of the parties and perused the material available on records. It is seen that no adverse finding has been recorded by the Ld. CIT(E) with regard to the objects of the assessee-trust. The only objection raised by the Ld. CIT(E) is that no material was furnished by the assessee to verify the nature of the activities allegedly carried out by it. The assessee has contended that no activities were carried out at the time of registration, the Ld. CIT(E) was required to be satisfied with regard to the objects of the trust. If the objects of the trust are found to be charitable in nature, the Ld. CIT(E) ought to have granted registration to the assessee. It is further noticed that a notice was issued to the applicant on 06.08.2024 and the impugned order came to be passed on 26.09.2024. It is the case of the assessee that no activity in furtherance of the objects embodied in the trust deed had been carried out as on the date of

ITA Nos. 203 & 204/VNS/2024 Page 4 of 4 filing of the application. We are of the considered view that the assessee should be given an opportunity to explain its case before the Ld. CIT(E) to sub-serve the principles of natural justice. Therefore, the impugned order is hereby set aside and restore the application filed by the assessee to the Ld. CIT(E) for considering the same afresh. Needless to say that the Ld. CIT(E) would provide reasonable opportunity of being heard to the assessee to explain its case. Grounds of appeal of the assessee are allowed for statistical purposes.

8.

In the result, both the appeals of the assessee are allowed for statistical purposes.

Order pronounced in the open Court on 30/06/2026.

Sd/- Sd/- [ANADEE NATH MISSHRA] [KUL BHARAT] ACCOUNTANT MEMBER VICE PRESIDENT DATED: 30/06/2026 Vijay Pal Singh, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. DR By order Sr. Private Secretary

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