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Facts
The assessee, a charitable trust registered under section 12AB, applied for approval under section 80G(5). The CIT(E) rejected the application because one of the trust's objects was to run schools "all over world". The assessee amended this object clause before the Tribunal.
Held
The Tribunal noted that the assessee's activities were not in dispute and that the trust had rectified its object clause, which was the sole basis for rejection. Therefore, the Tribunal restored the matter to the CIT(E) for fresh consideration.
Key Issues
Whether the rejection of 80G(5) approval based on an object clause mentioning running schools "all over world" is justified when the clause has been amended and the assessee's activities are not in dispute?
Sections Cited
80G(5), 12AB, 12AA, 254(1)
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PER PAWAN SINGH, JUDICIAL MEMBER;
This appeal by assessee is directed against the order of ld. CIT(E) dated 28.10.2024 for A.Y. 2025-26. The ld. CIT(E) rejected the application for approval of fund under section 80G(5) in his impugned order.
Rival submissions of both the parties have been heard and record perused. The learned Authorised Representative (ld. AR) of the assessee submits that assessee is a charitable-trust and having registration under section 12AB. The assessee applied for approval of fund under section 80G(5). The ld. CIT(E) rejected the application on the ground that one of the object of assessee trust is to run school within India and all over world. The assessee has amended its objects and clause by removing the word “all over world”. Thus, the ld. CIT(E) may be directed to reconsider the application of assessee afresh. The activities of assessee are not doubted by ld CIT(E).
On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue supported the order of ld. CIT(E).
We have considered the rival submissions of both the parties and find that the ld. AR of the assessee has made a very limited prayer for de novo consideration of his application under section 80G(5). The application of assessee under section 80G(5) was rejected on the ground that one of the object clause / memorandum of association consists “16. To organize and run schools under the affiliation and recognition of BSE, Odisha, CBSE and / or other Centre, State Board and non – governmental agencies within India and all over world”. Now before us, the ld. AR of the assessee has stated that they have rectified / amended their object clause, certified copy of memorandum of association / objects are filed before Tribunal. Therefore, considering the fact that activities of the assessee are not in dispute. Furthermore, the assessee is having registration under section 12AA/AB, and now the assessee has rectified its object clause, which was the sole basis for rejection of application of approval of funds. Hence, we deem it appropriate to restore matter back to the file of ld. CIT(E) for considering the application of assessee for approval of fund as afresh and to pass the order in accordance with law.