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Facts
The assessee, a charitable trust, applied for registration under Section 12AB and approval under Section 80G. The CIT(Exemptions) treated the trust as religious and rejected the applications. The assessee appealed against this order.
Held
The Tribunal held that the CIT(Exemptions) did not provide cogent reasons for treating the trust as religious and that the trust's activities, as per the trust deed and activity report, were charitable. The Tribunal remitted the issue back to the CIT(Exemptions) for fresh consideration.
Key Issues
Whether the CIT(Exemptions) erred in treating the assessee trust as religious instead of charitable, thereby rejecting its applications for registration and approval?
Sections Cited
12AB, 80G, 253(5)
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Income Tax Appellate Tribunal, ‘B’ BENCH, BANGALORE
Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY
Per Keshav Dubey, Judicial Member:
These appeals at the instance of the assessee are directed against the orders of the Learned Commissioner of Income Tax (Exemptions), Bangalore both dated 26/09/2024 vide DIN & Notice No. ITBA/EXM/F/EXM44/2024-25/1069118732(1) granting registration u/s.12AB of the Act as religious trust and vide DIN & Notice No. & 457/Bang/2025 Page 2 of 14 ITBA/EXM/F/EXM45/2024-25/1069118787(1) cancelling the approval u/s.80G of the Act.
In this appeal, the assessee has raised the following grounds of appeal: “1. That the order of the ld CIT(Exemptions) is opposed to the law, facts and circumstances of the case.
2. That the order of the CIT(Expenditure) is opposed to the various court decisions which is favouring the appellant is against the law and natural justice
“3.On the facts and circumstances prevailing in the case and as per the provisions of the law, it be held that the Hon'ble Commissioner of Income Tax Exemptions registered the trust as religious trust instead of Charitable Trust u/s. 12AB(1)(b) of the Act is improper, unwarranted, unjustified, and contrary to the provision of the Act and facts prevailing in the case. It be held that on facts and circumstances prevailing in the case, approval should be restored. Just and proper relief be granted to the Appellant in this respect.
On the facts and circumstances prevailing in the case and as per the provisions of the law, it be held that order of the Hon'ble Commissioner of Income Tax (Exemptions) registered the application filed by the Appellant in Form 1OAB under the provisions of the Income tax act, 1961 is improper, unwarranted, | unjustified and contrary to the provision of the Act and facts prevailing in the case. It be held that on facts and circumstances f prevailing in the case, registration should have been granted. Just and proper relief be granted to the Appellant in this respect as Charitable Trust instead of Religious trust based on the supplementary trust deed executed on 02/09/2020.
5. The Ld. CIT(Exemption) has registered the appellants application without verifying the supplementary deed executed .
and registered on 02/09/2020 which was uploaded along with application and submitted during the personal hearing that it is not a religious trust but it is a Charitable Trust.
6. The Ld. CIT(Exemption) erred in not considering the appellants submissions and detailed activity notes and other details submitted during the hearing without finding out the Deficiency and seeking the same.
7. The order is passed in haste, without providing sufficient arid reasonable opportunity of being heard, violating the principle of natural justice and is thus, liable to be quashed.
8. The appellant prays that the relief prayed for may kindly be allowed and the order of the CIT(E) may kindly be quashed, set aside, annulled or modified and approve the registration.”
3. At the outset, the ld counsel for the assessee submitted that there is delay of 162 days in filing the appeal before the Tribunal. The Ld AR of the assessee drew our attention to an application for condonation of delay filed along with an affidavit in original sworn before the Notary , Lingasugur dated 12.5.2025 stating therein the cause of delay, which are reproduced below for ease of reference and convenience:
“1. Paramapoojya Pakeeraswamy S/O Basavaraj Swamy aged about 48 years Principal Trustee of Shri Sadguru Nirupadeshwara Nitya ``Dasoha Charitable Trust, Ankalimath situated at Ankalimath Post, Makapura, Lingasugar, Tq Raichur District, Karnataka-584125 do hereby solemnly affirm and state on oath follows:
" The Deponent is Principal trustee of Shri. Sadguru Nirupacleshwara Nitva Dasoha Charitable Trust which is Registered and Resident in India engaged in Writable activities as per the aims and objects of the Trust. 2. That, the income tax compliances Right from filling of the Returns, appeals and relevant representations bearing the income tax authorities was entrusted to CA. Basavaraj Sajjan, Muclgal, Lingasugur Tq, Raichur District, Karnataka.
That the work was entrusted to CA Bannesh A B, Bengaluru to represent before the Income Tax Authorities and obtain 12AB registration and 80G approval from the appropriate authority as per the Income tax Act and accordingly letter of authorisation was provided to CA Bannesh A B, 4. That CA Bannesh A B had attended the hearings and submitted the details as sought in the notices issued from time to time before the Hon'ble Commissioner of Income tax (Exemption), Bengaluru.
That, the order for rejection of 80G approval and registration granted under 12AB of the income tax ACT/1961 as Religious trust was come to know trough e-proceedings upon verification by the CA Basavaraj Sajjan, regular auditor and tax compliance care taker which was passed on 26/09/2024. subsequently, due to tax audit and time barring works, the regular CA Basavaraj Sajjan was delayed in entrusting to file appeal before the IT AT to new Legal Consultants to file the appeal before the IT AT. Further, complexity of the issues raised in the grant of 80G deduction approval, it is decided to file appeal against the order of the Commissioner of income tax (Exemption), Bengaluru u/s. 12AB of the Act to enable to grant 80G deduction approval.
6. Thereafter, steps were taken to engage an authorized representative who file and represent the appeal before the Hon'ble Income Tax Tribunal, Bengaluru to ensure that such lapses do not recur.
7. Aggrieved by the said orders. The appellant wishes to prefer an appeal before f the Income Tax Appellate Tribunal (ITAT), however the statutory time limit to file appeal before the IT AT was 30/11/2024. Accordingly, there is delay of 162 Days.
The exercise of identifying and shortlisting the authorized representative took about 162 days have already elapsed.
That we were advised by the legal consultant to file an appeal before the Hon'ble IT AT for relief but the appeal has already become barred by time limitation. Nevertheless, the appeal was filed before this Hon'ble ITAT on date 11th May, 2025 accompanied by an application for condonation of delay as provided under section 5 of the LIMITATION ACT, 1963.
10. Further, the Appellant prays that its case be allowed to contest the appeal on merits and should not be shunned away on the technical ground of delay in filing of the appeal. A liberal view may kindly be taken while considering the condonation of delay.
11. It is therefore submitted that there is a reasonable cause in the case, which led to the aforesaid delay in filing of appeal before the Income Tax Appellate Tribunal, and accordingly, the Appellant trust prays that the delay may kindly be condoned.
12. Accordingly, the delay in filling appeal is on account of bona fide circumstances beyond the control of the Appellant trust and not on account of negligence on the part of the appellant. Hence, we humbly pray that delay be condoned in view of the peculiar circumstances and facts narrated above and in the interest of the justice.
13. That we had no intention to jeopardize the interest of the revenue by delaying the filing of the appeal.
I humbly urge that the genuine relief that is applicable to appellant as there is a prejudice to the interest of the appellant by treating the Charitable Trust as Religious trust without verifying the supplementary trust deed.”
4. Before us, the ld AR of the assessee submitted that there is sufficient & reasonable cause for delay in filing the appeal before this Tribunal. The delay was due to circumstances beyond the control of the assessee. Further, the ld AR submitted that no benefit can be attributed to the assessee in filing the appeal belatedly and accordingly, prayed that such unintended delay may be condoned and the appeal may be admitted for adjudication.
5. On the other hand, ld. Sr DR submitted that the appeal may be dismissed in limine as the delay is substantial and it is only due to the negligence of the assessee.
We have heard the rival submissions and perused the condonation petition along with an affidavit. It is to be noted that u/s.253(5) of the Act, the Tribunal may admit the appeal filed beyond the period of limitation where it is established that there exist a sufficient cause on the part of the assessee for not presenting the appeal within the prescribed time. The explanation .
Page 6 of 14 therefore becomes relevant to determine whether the same reflects sufficient and reasonable cause on the part of the assessee in not filing the appeal within the prescribed time.
On going through the affidavit as above, we find that the order of rejection u/s.80G as well as registration granted u/s.12AB of the Act as religious trust came to the knowledge of the assessee only upon verification by their Chartered Accountant being a regular auditor. Subsequently, due to tax audit and time barring works, the regular C.A. delayed in entrusting to file the appeal to a new legal consultant, which caused the delay of 162 days in filing the appeal before this Tribunal.
On going through the reasons for delay as stated in the affidavit, it cannot be said that the assessee is very callous in its approach in filing the If so, when substantial justice and technical appeal before us. considerations are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a non- deliberate delay. Moreover, no counter affidavit has been filed by the revenue that belated appeal was filed deliberately. We have to prefer substantial justice rather than technicality in deciding the issue.
Therefore, in our opinion, this is a fit case to condone the delay of 162 days in filing the appeal before this Tribunal. Accordingly, we condone the delay of 162 days and admit the appeal for adjudication.
Now coming to the brief facts of the case are that the assessee is a trust constituted vide deed of trust dated 13.2.2009. The trust is having following aims and objectives as per the trust deed:
“Aims and objectives:
The aims and objectives of the trust shall extend to whole of India rendering services to all the people irrespective of language race, region, religion, community, caste or creed, promoting the welfare of the society, in general in the trust areas as follows:
The objectives of the trust are given below: i. To establish, manage, continuous and perpetuate ddasoha that means free feeding of the poor, pilgrims, devotees by providing food, shelter and other necessities at the Math, Ankalimath, and in any other places of worship or sacred places or educational centres and also maintain the spiritual and in any other places of worship or sacred places or educational centres and also maintain the spiritual and sacred atmosphere of Ankalimath and any other places as may be decided by the settler and Trustee from time to time to carry out the objects of the Trust. ii. To provide facilities to pilgrims devotees, disciples and other who visit Ankalimath and its temples for religious cultural and other activities of the Math. iii. To build, construct, modify, decorate and maintain temples and their annexes at Ankalimath and any other places. iv. To arrange or assist pilgrims or travaellers to religious or cultural places, centres and provide assistance to promote religious and cultural activities and maintain or manage ‘Samadhis’ of previous Swamiji. v. To administer, assist, maintain or manage Samadhis, ‘Gaddigis’ of the founders and previous Swamiji of the |math and make provisions for their daily or periodical worship and other religious and cultural activities. vi. To establish, manage, acquire or take over in any place boarding homes educational institutions residential educational institutions, research centres, job oriented courses etc, for promoting education culture religion employment and principle of ‘Kayak’ or devotion to duty.
Page 8 of 14 vii. To invest, reinvest any fund or to acquire construct, or reconstruct any building or any property to carry out the objectives of the Trust. viii. To publish books, journals or any literature which have cultural, religious and moral values without any profit motive. ix. To perform works of charities for the poor people irrespective of language, race, region, religion, community case or creed or colour. x. To assist any institutions formed for charitable purpose which is recognized u/s.80G of the Income Tax Act. xi. To run, develop or improve any school collee or other educational institution or adopt, assist or help any existing educational institution or adopt, assist or help any existing educational institution without profit motive for the benefit of the public in Indian in general. xii. To build, run and maintain hospitals, healthcare cetre, nursing homes, rehabilitation centre , medical investigation and research establishments or institutions in India for affording facilities of medical relief to the poor, the sick and the suffering xiii. Organizing camps to create health awareness and working on other traditional knowledge such as ayurvedic etc. xiv. Providing basic education to backward community and tribes educating on govt. schemes, laws related to village lift etc educating and empowering women organizing workshops on entrepreneurship development and self-employment. xv. Creating awareness about importance of environmental conservation and protection ecological balance, global protection of endangered species, development and protection of forest area and promoting eco-tourism. xvi. Promoting Indian Tradition and culture, fold arts. Etc. xvii. To promote small scale and village industries to handicrafts and encourage and promote regional imbalance production and consumption and khadi and other eco-friendly products and to popularize swadishi products through swadesi andolan. xviii. To provide basic infrastructure education facilities to orphans and all such facilities for betterment of their life to cater to the needs of aged old persons down trodden and people from socially and economically backward classes.
& 457/Bang/2025 Page 9 of 14 xix. To strive for the socio-economic development of rural people, motivating them to achieve self-sufficiency and to lead a peaceful life. xx. To undertake such other activities as are necessary and conductive to carry out the objectives of the Trust.”
Further, the supplementary trust deed is also executed on 2.9.2020 by inserting sub-clause in clause 4 of the trust deed, which are as follows: “Following sub-clauses in clause o.4 of the Principal trust deed shall be inserted after the sub clause No.(16) (17) To adopt villages for improvement, betterment and public benefits such as sports, health, sanitation; education, training and housing. (18) To accept donations, grants, endowments presents, gifts, aid and other offerings in the shape of movable and/or immovable properties, in cash or in kind for the said purpose and for the betterment of the aims and objects of the Trust . (19) To act in collaboration in collaboration with Central and other appropriate agencies for formulation and execution of projects which would further the objects as set out above. (20) To accept donations, grants, endowments, presents, gifts, aid and other offerings in the shape of movable and/or immovable properties, in cash or In kind for the said purpose and for the attainment of the aims and objects of the Trust.
(21) To feed poor students and to start free student homes and free hostels. (22) To encourage the spiritual and intellectual development of child labour school dropout children .
& 457/Bang/2025 Page 10 of 14 and out of school group young, adults and imparting such special training in some vocation if possible, until they have completed a professional apprenticeship in order to establish social security and an environment which corresponds to their needs and temperaments.
(23) To generally impart education to children and for the purpose to do all acts that may be necessary. (24) To promote, construct and maintain state of the art schools, colleges institutions and universities. And educational programmes in rural areas to bridge the rurl and urban gap. (25) To offer information technology programmes for the rural youth and organizations. (26) To print and publish journals, periodicals literature, develop and create audio-visual materials of importance to the public.
(27) To establish, maintain and support libraries, museums and reading rooms and distribute books etc for advancement of education and knowledge in general. (28) It aims to take up all rural development activities like agriculture, soil conservation, horticulture, sericulture, animal husbandry health education women and child welfare and all other govt rural development programmes with the help of concerned govt departments & pubic. (29) It aims at creating awareness against the evils of the society illiteracy, untouchables, devadasi system slavery, child labourers, child marriages, (movement against) drug addiction etc.
The assessee had been granted provisional registration under sub-clause (vi) of clause (ac) of sub-section (1) of Section 12A of the Act on 27.5.2021 from the assessment year 2021-22 to A.Y. 2023-24.
26.9.2024 u/s. 12AB (1)(b) of the Act from A.Y. 2021-22 to 2025-26 vide URN- AAPTS9702G24BL01 as religious trust.
Further, the assessee has also obtained provisional approval u/s.80G of the Act in Form 10AC dated 9.7.2021 from Asst.Year 2021-22 to 2023-24. However, the ld CIT(Expenditure) vide order dated 26.9.2024 rejected the approval on the ground that the assessee has been granted registration u/s.12AB of the Act as religious trust.
Against the orders of the ld CIT(Exemptions), granting the registration u/s.12AB of the Act treating the assessee as religious Trust and rejection of approval u/s.80G of the Act, the assessee has filed the present appeals before this Tribunal.
Before us, the ld AR of the assessee vehemently submitted that the ld CIT(Exemptions) completely ignored the supplementary trust deed in holding that the activities of the trust are religious. The Ld AR further submitted that the ld CIT(Exemptions) without assigning any reason and without issuing any show cause notice to the assessee, treated the assessee as “religious trust” and also rejected the approval granted u/s.80G of the Act on the sole ground that the assessee trust is religious.
The Ld. DR on the other hand supported the order of the ld CIT(Exemptions).
& 457/Bang/2025 Page 12 of 14 16. We have considered the rival submissions and perused the materials available on record. On going through the order of ld CIT(Exemptions), we find that the ld CIT(Exemptions) has not given any cogent reason in treating the trust as religious. Further, on going through the trust deed, we observe that the activities of the trust as stated are charitable in nature. Our view also gets support from the fact that the assessee trust had not claimed any expenditure of religious nature in its audited income and expenditure account produced before us. Further, before us, the assessee trust has also produced the activity report in which, we found that the assessee is engaged towards free feeding to poor, pilgrims, devotees by providing food, shelter, constructed wash room etc for general public as well as agricultural awareness programmes for local in regard to benefit of farmers, construction of community hall and hospital, etc. Therefore, we are of the considered view that it cannot be said that the assessee is wholly and solely established for religious purposes. We are of the considered view that the ld CIT(Exemptions) had not examined all these facts while passing the order u/s. 12AB of the Act/80G of the Act. This being so, in the interest of justice and fair play, and as requested by ld AR, we deem it fit and proper to remit the issue in dispute to the file of the ld CIT(Exemptions) for fresh consideration taking into account the trust . statement, as produced before us along with the up-to-date details and pass an order in accordance with law. Needless to say, a reasonable opportunity of hearing must be granted to the assessee. The assessee is also directed to cooperate in the set aside proceedings and produce all necessary documents/information/ report/records/financials in order to substantiate its claim. It is ordered accordingly.
Since, we have remitted the grant of registration u/s.12AB of the Act to the file of the ld CIT(Exemptions), the issue or registration u/s.80G is also remitted to the file of learned CIT(E) with a direction to consider the same afresh after the decision in respect of assessee's application for approval under section 12AB of the Act.
In the result, both the appeals of the assessee are allowed for statistical purposes. Order pronounced in court on 25th day of August, 2025