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Facts
The assessee, a trust involved in education, applied for permanent registration under Section 80G of the Income Tax Act. The CIT(Exemptions) rejected the application, citing Section 80G(2). The assessee had previously obtained provisional registration under Section 12A and Section 80G, and permanent registration under Section 12A.
Held
The Tribunal held that the CIT(Exemptions) erred in referring to Section 80G(2) instead of Section 80G(5) for considering the grant of registration. The Tribunal found that the assessee fulfilled all conditions prescribed under Section 80G(5) and the activities were genuine and charitable in nature.
Key Issues
Whether the CIT(Exemptions) erred by applying the wrong sub-section of Section 80G while rejecting the assessee's application for registration. Whether the assessee's activities and objects are genuine and charitable.
Sections Cited
80G, 12A, 12AA, 80G(2), 80G(5), 11, 13, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH : BANGALORE
Before: SHRI WASEEM AHMED & SHRI PRAKASH CHAND YADAV
Date of hearing : 27.01.2025 Date of Pronouncement : 31.01.2025 O R D E R
Per Prakash Chand Yadav, Judicial Member
The present appeal of the assessee is arising out of the order of the ld. CIT(Exemptions), Bangalore dated 30.9.2024 and relates to denial of registration u/s. 80G of the Act.
The brief facts of the case as coming out from the orders of the authorities below are that the assessee is a trust created by virtue of trust deed dated 28.11.2017 at Bangalore. The main object of the trust is to impart education among all the categories of the society. The assessee applied for provisional registration u/s. 12A and got the same vide order dated 28.10.2021, the same is applicable for AY 2022-23 to 2024-25. Copy of the provisional registration is at page 27 of PB. On 16.11.2021, the assessee also got a provisional registration u/s. 80G, copy of the same is at page 30-31 of PB. Thereafter the assessee applied for permanent registration u/s. 12A and 80G. On 30.9.2024 the assessee has got permanent registration u/s. 12A from the department. Copy of the same is at page 104-106 of PB.
The assessee has applied for permanent registration u/s 80G on 27.3.2024, however the application filed by the assessee has been rejected by the ld. CIT(Exemptions) referring to provisions of section 80G(2) of the I.T. Act.
Aggrieved with the order of the ld. CIT(Exemptions), assessee has come up in appeal and inter alia argued that the ld. CIT(E) has erred in referring to the provisions of section 80G(2) instead of 80G(5) applicable to the present case.
The ld. DR fairly conceded that the ld. CIT(E) had erred in relying on the provisions of section 80G(2).
We have heard the rival submissions and considered the matter available on record. We observe that it is an undisputed fact that the activities of the assessee are genuine and the objects of the assessee trust are charitable in nature. As evident from the fact, that the assessee has been granted permanent registration u/s. 12AA . We observe that while considering the application of assessee for grant of registration u/s. 80G, the ld. CIT(E) has inadvertently/wrongly referred to provisions of section 80G(2) of the I.T. Act. In our view, these provisions are applicable for claim of deduction of the sums paid to the charitable organisation. We further observe that the relevant clause for considering the grant of registration u/s. 80G is sub-section (5). We are of the firm opinion that assessee has fulfilled all the conditions prescribed u/s. 80G(5) and hence entitled for registration of 80G. We further observe that it is settled position of law that at the time of granting of registration, the authority has to see whether the objects of the applicant is charitable in nature and the activities of the applicant are genuine or not. The benefits of section 11 & 13, application of funds collected by the charitable organisation, are to be examined during the course of assessment proceedings u/s. 143(3) or any under any other section, as the case may be.
Issue whether the student course fee falls under the category of donation or not, is not at all relevant in the present proceedings. Therefore, appeal of the assessee is allowed and the CIT(E) is directed to grant 80G to the assessee.
In the result, the appeal of the assessee is allowed.
Pronounced in the open court on this 31st day of January, 2025.