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Facts
The assessee, Anuradha Bharat Bhogate Charitable Trust, filed an application for registration under Section 80G of the Income Tax Act. The CIT(E) rejected the application, citing that some objects in the Trust Deed/MOA intended to apply/receive funds outside India, violating Section 11 of the Act. The assessee contended that an affidavit was filed stating no such expenditure would occur.
Held
The Tribunal acknowledged the CIT(E)'s reason for rejection was the trust deed's objects extending beyond India. However, considering the assessee's undertaking and the fact that no funds had been spent outside India, the Tribunal decided to give the assessee one more opportunity to present their application.
Key Issues
Whether the rejection of an application for registration under Section 80G by the CIT(E) solely based on potential future expenditure outside India, despite an affidavit to the contrary, is justified?
Sections Cited
12AB, 80G, 11
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: SHRI. OM PRAKASH KANT, AM
O R D E R Per Kavitha Rajagopal, J M: This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Exemptions) Mumbai (‘ld. CIT(E)’ for short), in rejecting the application made by the assessee in form 10AB for granting registration u/s. 12AB of the Income Tax Act, 1961 (‘the Act'), vide order dated 28.09.2024.
The assessee has raised the following grounds of appeal:
1. A. On the facts and circumstances of the case, and in Law, the CIT erred in rejecting the assessee's application u/s 80G of the Act. B. On the facts and circumstances of the case and in law the CIT failed to appreciate that (A.Y. N.A.) Anuradha Bharat Bhogate Charitable Trust i. The AO rejected the application under the context that the trust deed of the assessee has room for potential future endeavor of expenditure outside India. ii. The object of the trust had clauses which allowed exchange of students and experts for exchange programs and to conduct Foreign country collaborative Programs and courses, which in essence are not expenditures outside India. iii. The assessee has filed an affidavit stating that it would not incur any expenditure or would undertake any activity wherein benefits are realized outside India. iv. AO rejected the application ignoring the sworn affidavit filed by the assessee. v. An affidavit is a legally binding document once filed with admissions, become binding unless they can be successfully challenged. C. The appellant therefore prays that application for registration may be approved.”
2. The brief facts are that the assessee is a charitable trust engaged in charitable activities in the field of service towards mankind suffering from diseases, providing food shelter to the kin/relatives of patients taking care of them and distributing money, food, clothing and shelter to poor and needy as per the trust deed of the assessee. The assessee had applied for approval u/s. 80G in form 10AB. The ld. CIT(E) observed that the assessee’s application was incomplete as the assessee has failed to furnish all the relevant documents, for which the ld. CIT(E) had issued notice dated 04.07.2024 requiring the said documents. On perusal of the same, the ld. CIT(E) observed that the some of the objects of the Trust Deed/MOA of the assessee trust are in violation of provision of Section 11 of the Act, where it has specified that the objects of the assessee trust intends to apply/receive funds outside India. The ld. CIT(E) rejected the assessee’s application for approval u/s. 80G of the Act, after duly considering the submission of the assessee for failure to amend the Trust Deed/MOA on the objects which are in violation of the provisions of the Act, vide order dated 28.09.2024.
(A.Y. N.A.) Anuradha Bharat Bhogate Charitable Trust 3. Aggrieved the assessee trust is in appeal before us, challenging the impugned order of the Ld. CIT(E).
We have heard the rival submissions and perused the materials available on record. The learned Authorised Representative ('ld. AR' for short) for the assessee contended that the only reason specified in the impugned order was due to the objects specified in the Memorandum of Association which extends outside India. The ld. AR further stated that the assessee has even given an undertaking to amend and correct the object clause of the MOA as per the requirement of Section 11 of the Act. The ld. AR prayed that the assessee trust is running efficiently for past several years which are genuinely into charitable activities and prayed that the assessee may be given one more opportunity before the ld. CIT(E).
The learned Departmental Representative (‘ld. DR’ for short) for the revenue had nothing to controvert the same and relied on the order of the ld. CIT(E).
In the above factual matrix of the case, it is observed that the only reason for denial of registration u/s. 80G of the Act was that the objects of the assessee trust as per of Memorandum of Association/Trust Deed was extended beyond India which was in violation of provisions of Section 11 of the Act. It is observed from the submission of the assessee that the assessee trust has not spent its fund till date outside India and has not violated the provision of Section 11 of the Act. 6. On the above facts, we deem it fit to provide the assessee trust with one more opportunity to present its application for registration u/s. 80G approval in the prescribed form along with all supporting documentary evidence before the ld. CIT(E) and the ld. (A.Y. N.A.) Anuradha Bharat Bhogate Charitable Trust CIT(E) is also directed to decide the application on the merits of the submission of the assessee trust and in accordance with law. 4. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 17.03.2025