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Facts
The assessee, a charitable trust registered under Section 12AB, applied for approval under Section 80G(5) of the Income-tax Act. The CIT(E) rejected the application, citing a lack of expenditure on charitable activities and insufficient documentary evidence, leading the assessee to appeal to the ITAT.
Held
The Tribunal noted that the assessee held Section 12A registration and had filed supporting documents which the CIT(E) had not properly considered. The ITAT set aside the CIT(E)'s order and remitted the matter back to the CIT(E) for fresh consideration on merits, allowing the assessee to submit additional documents.
Key Issues
Whether the CIT(E) erred in denying approval under Section 80G(5) without adequately considering the assessee's charitable activities and submitted documents, especially given its existing registration under Sections 12A and 12AB.
Sections Cited
80G, 80G(5), 12A, 12AB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH : BANGALORE
Before: SHRI LAXMI PRASAD SAHU & SHRI SOUNDARARAJAN K.
ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER
This is an appeal filed by the assessee challenging the order of the Ld.CIT(E) dated 18/03/2025 wherein approval u/s. 80G was denied by the Ld.CIT(E) and raised the following grounds: “1. The Learned Commissioner has erred in law and on facts in passing an order rejecting the application under section 80G of the Income-tax Act,1961, in the manner she did.
2. The order is passed in violation of the principles of natural justice and, therefore, bad in law.
3. The Learned Commissioner has erred in law and on facts by not appreciating the nature of the activities of the appellant.
4. The Ld. Commissioner has erred in law and on facts in stating that the Appellant has not submitted documents when the same are available on the records; 5. The Ld.Commissioner has erred in stating that the Appellant has not made expenditure towards charitable activities towards the objects of the trust, and further erred in stating that the Appellant has not produced documentary evidence in connection with the same. 6. The Ld.Commissioner has erred in law and on facts in rejecting the recognition without considering the registration under section 12A of the Act; 7. The Order of the Learned Commissioner has fallen into error of facts as well as in law, as the basis of rejection is based on an incorrect assumption of facts, rendering the impugned order to be perverse; On the basis of the above grounds and other grounds which may be urged at the time of hearing with the consent of the Honourable Tribunal, it is prayed that the order passed under section 803 of the Act, to the extent, it is against the Appellant, be quashed and the relief sought to be granted.”
The assessee is having the registration u/s. 12AB of the Act and on 30/09/2024 filed an application in form 10AB for approval u/s. 80G(5) of the Act. The Ld.CIT(E) had rejected the said application on the ground that the assessee had not made expenses towards the charitable activities. The Ld.CIT(E) further observed that the assessee had not produced any documentary evidences in support of the same.
As against the said order, the present appeal has been filed before this Tribunal.
At the time of hearing, the Ld.AR submitted that the assessee is a charitable trust registered under the provisions of section 12AB of the Act and also incurred expenditure towards the objects of the trust. In support of the said submissions, several documents were also filed before the authorities but the Ld.CIT(E) without considering the said documents, had rejected the application filed for approval u/s. 80G(5) of the Act.
The Ld.DR relied on the orders of the Ld.CIT(E) and prayed to dismiss the appeal.
We have heard the arguments of both sides and perused the materials available on record.
We find from the documents furnished by the assessee that the supporting documents were filed before the Ld.CIT(E). The Ld.CIT(E) had considered the income and expenditure account and observed that no documents were filed in support of the claim that the assessee is doing charitable activities. Admittedly, the assessee is having the registration u/s. 12A of the Act and in such circumstances, the rejection of the approval u/s. 80G(5) would not be in the interest of the assessee.
To verify the claim that the assessee had engaged in the charitable activities and also to consider the documents in support of the said contention, we are of the view that one more opportunity may be granted to the assessee. We, therefore set aside the order of the Ld.CIT(E) and remit this issue to the file of Ld.CIT(E) and decide the application afresh on merits after considering the documents filed by the assessee. It is also open to the assessee to file further documents in support of their case while the Ld.CIT(E) is adjudicating the issue.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 09th September, 2025.