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Facts
The assessee, Maditssia Trade & Convention Centre, applied for registration under Section 12A(1)(ac)(iii) and approval under Section 80G of the Income Tax Act. The CIT(E) rejected both applications, citing lack of evidence regarding the charitable nature of the convention center's activities, particularly concerning free or subsidized access, and concluding that the activities appeared predominantly commercial.
Held
The Income Tax Appellate Tribunal (ITAT) noted that the assessee claimed to have evidence of charitable activities which could not be furnished earlier. Considering the interest of justice, the ITAT remitted both matters (registration under Section 12AB and approval under Section 80G(5)) back to the CIT(E) for fresh consideration, granting the assessee a reasonable opportunity to present all relevant documents and clarify its objectives and activities.
Key Issues
Whether the assessee's proposed activities for its convention center are charitable in nature to qualify for registration under Section 12AB and approval under Section 80G, given the concerns about commercial intent and lack of free/subsidized access.
Sections Cited
12A(1)(ac)(iii), 12AB, 80G, 80G(5), 2(15)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI MANU KUMAR GIRI & SHRI JAGADISH
आदेश / O R D E R
PER JAGADISH, A.M : Aforesaid appeals filed by the assessee arises out of the orders of Learned Commissioner of Income Tax (Exemption), Chennai [hereinafter “CIT(E)”] dated 27.06.2025 in rejecting application for registration u/s. 12A(1)(ac)(iii) of the Income-tax Act, 1961 (hereinafter “the Act”) and approval u/s 80G of the Act.
& 1920/Chny/2025 Maditssia Trade & Convention Center :- 2 -: ITA No.1919/Chny/2025:
The Ld CIT(E) has rejected the application filed by the assessee in Form 10AB u/s. 12(1)(ac)(iii) of the Act on 21.11.2024 seeking registration u/s. 12AB of the Act for the reason that the applicant has not provided any evidence or clarification regarding the proposed usage of the convention center, specifically whether it will be made free of charge or fee will be levied for its use and in the absence of any note regarding free or subsidized access to the proposed convention center the activities are structured with commercial objective.
The Ld. Authorized Representative (AR), before us, submitted that the learned CIT(E), in para 4.2(v) of the impugned order, has observed that the activities of the assessee appear to be predominantly commercial in nature, with a clear revenue-generating intent. It was further noted by the Ld. CIT(E) that no material was placed on record by the assessee to demonstrate that the proposed convention centre would advance any charitable purpose or serve the public interest in any meaningful manner. The Ld. CIT(E) also observed that, in the absence of any note regarding free or subsidized access to the proposed convention centre, the activities appear to be structured with a commercial objective. The Ld. AR, therefore, pleaded & 1920/Chny/2025 Maditssia Trade & Convention Center :- 3 -: that one more opportunity may be granted to the assessee to file the necessary details before the learned CIT(E) to prove charitable objective.
On the other hand, the Ld. Departmental Representative (DR), has relied on the orders of lower authorities.
We have heard both the parties and gone through the order of the Ld. CIT(E). The Ld. CIT(E) rejected the application for registration u/s. 12AB of the Act after examining the present and proposed activities and observing that the applicant has not provided any evidence or clarification regarding the proposed usage of the convention center – specifically whether it will be made free of charge or fee will be levied for its use. The Ld CIT(E) has held that in absence of any note regarding free or subsidized access to the proposed convention center the activities are structured with a commercial objective. The Ld. AR has submitted that the assessee has evidences to demonstrate that it has undertaken charitable activities, but could not be furnished before Ld CIT(E), therefore one more opportunity may be provided before Ld CIT(E). Considering the submissions and in the interest of justice, we are of the view that one more opportunity should be granted to the assessee to present its case before Ld CIT(E).
1. & 1920/Chny/2025 Maditssia Trade & Convention Center :- 4 -: Accordingly, we remit the matter back to the file of the Ld. CIT(E) for fresh consideration of the application, after affording the assessee a reasonable opportunity of being heard. We also direct the assessee to appear before the Ld. CIT(E) on the date of hearing without fail and submit all the relevant documents sought for by the Ld. CIT(E). In view of the above, the appeal filed by the assessee is allowed for statistical purposes only.
: 6. In this case, the Ld. CIT(E) had rejected the assessee’s application for approval u/s. 80G(5) of the Act on the ground that the assessee has failed to prove the activities of the trust/institution are in charitable as defined in section 2(15) of the Act. Since, we have already remitted the matter relating to registration u/s. 12AB back to the file of the Ld. CIT(E) for fresh consideration, we are of the considered opinion that the issue of approval u/s. 80G(5) of the Act also requires reconsideration. Accordingly, we remit this matter as well to the file of the Ld. CIT(E) for fresh adjudication, after giving due opportunity to the assessee to clarify its objects and activities.
& 1920/Chny/2025 Maditssia Trade & Convention Center :- 5 -: 7. In the result, both the appeals filed by the assessee is allowed for statistical purposes.
Order pronounced on 29th day of September, 2025 at Chennai.