RENUKA KATTA CHARITABLE TRUST,HYDERABAD vs. CIT(EXEMPTION), HYDERABAD

आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘A‘ Bench, Hyderabad �ी �वजय पाल राव, उपा� य� एवं �ी मधुसूदन साव�डया, लेखा सद� य के सम� । Before Shri Vijay Pal Rao, Vice-President A N D Shri Madhusudan Sawdia, Accountant Member आ.अपी.सं /ITA No. 2456/Hyd/2025 (िनधा�रण वष�/Assessment Year:2025-26) Renuka Katta Charitable Vs. CIT (Exemption) Trust, Hyderabad Hyderabad PAN: AABTR2597N (Appellant) (Respondent) िनधा�रती �ारा/Assessee by: CA Shradha Kalia राज� व �ारा/Revenue by:: Shri M. Naveen, CIT (DR) सुनवाई की तारीख/Date of hearing: 15/06/2026 घोषणा की तारीख/Pronouncement: 24/06/2026 आदेश/ORDER Per Madhusudan Sawdia, A.M.:

This appeal is filed by Renuka Katta Charitable Trust (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Exemption), Hyderabad (“Ld. CIT(E)”) in Form No. 10AD, dated 20.11.2025. 2. The assessee has raised the following grounds of appeal:

that the assessee was not engaged in substantial charitable activities. However, she submitted that some charitable activities had nevertheless been undertaken by the assessee during the relevant years. Inviting our attention to the financial statements for Assessment Years 2023-24 and 2024-25 placed at page nos. 79 to 84 of the paper book, she submitted that certain charitable activities were carried out by the assessee during these years. The Ld. AR further invited our attention to the bank statement of Union Bank of India placed at page no. 92 of the paper book and demonstrated that an amount of Rs.5,271/- was paid through banking channels on 15.12.2023 towards purchase of books for donation purposes. Accordingly, it was submitted that although the assessee was not involved in substantial charitable activities, it had nevertheless carried out certain charitable activities. The Ld. AR further submitted that registration under section 12AB of the Act cannot be denied merely because the assessee has undertaken only limited charitable activities or because no significant charitable activity was carried out in a particular year. She submitted that the Ld. CIT(E), without considering the financial statements and activities reflected in Assessment Years 2023-24 and 2024-25, rejected the application solely on the basis of Financial Year 2024-25. She therefore prayed that the matter may be restored to the file of the Ld. CIT(E) for fresh consideration after granting adequate opportunity to the assessee and after examining the financial statements of the earlier years as well. 6. Per contra, the Learned Departmental Representative (“Ld. DR”) supported the order of the Ld. CIT(E) and submitted that there is no infirmity in the impugned order.

Inviting our attention to para no. 3.3 of the Annexure to Form No. 10AD (Supra), the Ld. DR submitted that the assessee had not carried out any meaningful charitable activities during the relevant period and, therefore, the Ld. CIT(E) was justified in rejecting the application for renewal of registration under section 12AB of the Act. Accordingly, the Ld. DR prayed for upholding the order of the Ld. CIT(E). 7. We have heard the rival submissions and perused the material available on record. The short issue for consideration before us is whether the Ld. CIT(E) was justified in rejecting the application filed by the assessee for renewal of registration under section 12AB of the Act. It is an undisputed fact that the assessee had earlier been granted registration under section 12AB of the Act vide Form No. 10AC dated 05.04.2022 for Assessment Years 2022-23 to 2026-27. It is also not in dispute that during the course of proceedings the assessee furnished information and documents in response to notices issued by the Ld. CIT(E). We have carefully gone through para no. 3.3 of the Annexure to Form No. 10AD (Supra) and find that the Ld. CIT(E) has primarily decided the issue on the basis of the financial statements relating to Financial Year 2024-25 and has concluded that the assessee was not carrying out charitable activities warranting continuation of registration. At the same time, we find merit in the contention of the assessee that before passing the impugned order no specific show-cause notice was issued by the Ld. CIT(E) communicating the proposed grounds of rejection and calling upon the assessee to explain as to why its application should not be rejected. In our considered view, where an adverse view is proposed to be taken against an assessee, particularly in

proceedings concerning grant or renewal of registration under section 12AB of the Act, the assessee must be made aware of the deficiencies noticed by the authority and should be afforded an effective opportunity of being heard before any adverse order is passed. We further find that the Ld. CIT(E) has examined the issue predominantly with reference to the financial statements of Financial Year 2024-25 alone. The assessee has specifically relied upon its financial statements and activities reflected in Assessment Years 2023-24 and 2024-25 and has also placed certain supporting material on record to demonstrate that some charitable activities were carried out during the relevant period. In our view, while examining an application for renewal of registration, the activities of the trust over the relevant period are required to be examined in a holistic manner and the issue cannot be decided solely on the basis of one financial year without considering the material placed on record relating to earlier years. Considering the totality of facts and circumstances of the case, we are of the view that the matter requires fresh examination by the Ld. CIT(E). Accordingly, in the interest of justice, we set aside the impugned order and restore the matter to the file of the Ld. CIT(E) with a direction to reconsider the application for renewal of registration under section 12AB of the Act afresh. The Ld. CIT(E) shall issue an appropriate show-cause notice, provide adequate opportunity of being heard to the assessee, consider the financial statements and activities of the assessee for the earlier assessment years as well as the latest available financial year, and thereafter decide the issue on merits in accordance with law by passing a speaking order. The assessee is also directed to extend full cooperation and furnish all information and

documents that may be called for by the Ld. CIT(E) during the fresh proceedings.

Order pronounced in the Open Court on 24th June, 2026. Sd/- Sd/- (VIJAY PAL RAO) (MADHUSUDAN SAWDIA) VICE PRESIDENT ACCOUNTANT MEMBER Hyderabad, dated 24th June, 2026. Vinodan/sps Copy to: S.No Addresses 1 RENUKA KATTA CHARITABLE TRUST 3 -47- 218 PLOT NO 193 LANE OPP KARKHANA BUS STOP, VASAVINAGAR SECUNDERABAD 500015 2 CIT (Exemption) Aayakar Bhavan, Basheer Bagh, Hyderabad 500054 3 Pr. CIT -Exemption, Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File

By Order Digitally signed by TUMMALACHARLA TUMMALACHARLA LAKSHMI NARAYANA DN: cn=TUMMALACHARLA LAKSHMI LAKSHMI NARAYANA, c=IN, o=INCOME TAX APPELLATE TRIBUNAL, ou=INCOME TAX NARAYANA APPELLATE TRIBUNAL, CHENNAI BENCH Date: 2026.06.24 17:30:14 +05'30'