PARISARA ABHIVRUDHI FOUNDATION,BANGALORE vs. COMMISSIONER OF INCOME TAX (EXEMPTIONS), BANGALORE

Similarly by order dated 31.3.2025, she also rejected the approval u/s. 80G of the Act.

Assessee is aggrieved by both these orders and is in appeals before us. The ld AR submitted aa paper book containing 272 pages and a case law compilation containing not less than 43 decisions. We have heard him at length.

The ld. DR vehemently supported the orders of the ld. CIT (E) and stated that he has given ample reasons for not granting registration to the assessee trust u/s 12 AB of the Act and Further as registration under that section is not granted, naturally, recognitions u/s 80 G cannot be granted.

We have carefully considered the rival contentions and perused the order of the ld CIT (E) reusing to grant registration u/s 12AB and consequent recognition u/s 80G (5) of the Act.

Main reason for not granting registration to the assessee is that on verification of the details for assessment year 2021 – 22 and 2023 – 24 indicate that nothing substantial expenses has been incurred towards charitable objects of the trust. Further the monthly withdrawal in cash of ₹ 50,000 and further payment of Rs 4 lakhs and 5.50 lakhs given to two entities, reasons for such advances could not be explained by the assessee. Further the assessee has made payment of ₹ 20 lakhs to the Fortis Hospital on 19/10/2023 which was not found recorded in the income and expenditure account. Further there is a transaction of possession of land taken over by the assessee trust from another trust and assessee has not furnished any evidence to establish credentials of that trust which transferred the land parcel to the assessee. There is an advance payment of Rs. 2.60 crores to one private limited company where the trustee is the director.

Ld AR submitted that assessee was never asked about the payment made to VIBIN media private limited of ₹ 5.50 lakhs and Rs 4 lakhs to KC Enterprises. The necessary details were furnished at page number 236 – 247 of the paper book. Further it was the amount of ₹ 20 lakhs to The Fortis Hospital is the repayment of loan to one of the person, who earlier gave loan to the assessee , which is placed at page number 240-249 of the paper book. As the same was repayment of loan, same

It was the claim of the assessee that the learned CIT did not grant proper opportunity of hearing, and the view was formed without confronting the assessee about the observation without issuing a show cause notice. Had these details been asked for and questioned to the assessee, same would have been explained, such is the claim of the assessee. On reading of the order of the ld CIT (E) we do not find that such queries based on which an opinion is formed that assessee trust has not conducted substantial activities, are put to the assessee.

The nature of the transaction and volumes which are mentioned in the order of the ld CIT E, it is apparent that assessee has conducted some activities. Now it is for the LD CIT E to satisfy herself about the genuineness of the same in relation to objects of the trust. Further it is claimed that assessee has received an income of Rs 3.59 Crores and has incurred expenditure of Rs. 2.04 Cr in Ay 2024-25.

In of the above facts, we restore the appeal for registration under section 12 AB of the act in ITA number 912/Bangalore/2025 back to the file of the learned CIT – E with a direction to the assessee to submit explanation regarding the observation of the learned CIT – E. The learned CIT – E thereafter may examine the details, carry out examination of the genuineness of the activities of the trust, and thereafter decide the issue that whether the assessee trust is eligible for registration under section 12 AB of the act or not. That ld CIT E may issue show cause notice to the assessee, if she does not agree with the submission of the assessee and then pass the reasoned order. Accordingly this appeal is allowed for statistical purposes.

The second ITA number 913/B/2025 is against the rejection of application for registration under section 80 G (5) of the act which may be examined consequent to the status of the registration under section 12 AB of the act. Therefore, this appeal is also restored the file of the learned CIT – E to decide the issue afresh. Accordingly this appeal is also allowed for statistical purposes.

In the result the appeals of the assessee are allowed for statistical purposes. Pronounced in the open court on this 28th day of July, 2025. Sd/- Sd/- (KESHAV DUBEY) (PRASHANT MAHARISHI) JUDICIAL MEMBER VICE PRESIDENT Bangalore, Dated, the 28th July 2025. /Desai S Murthy / Copy to: