Loading judgment…
Facts
The assessee filed an application in Form 10AB seeking approval under Section 80G of the Income Tax Act. The CIT(E) rejected the application due to an apparent selection of 'religious cum charitable trust' in the application form, despite the trust claiming to be purely charitable.
Held
The Tribunal held that the CIT(E) did not properly consider the documents submitted by the assessee, including the trust deed and supplementary deed. The Tribunal set aside the order of the CIT(E) and remanded the matter back for fresh consideration.
Key Issues
Whether the rejection of the application for approval under Section 80G by the CIT(E) was justified without proper consideration of the trust's charitable nature and submitted documents.
Sections Cited
80G, 11AA
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: HON’BLE SHRI MANU KUMAR GIRI & HON’BLE SHRI S. R. RAGHUNATHA
आदेश / O R D E R
PER MANU KUMAR GIRI, JM:
The present appeal is filed by the assessee is against the order of the CIT(E) dated 19.07.2024, rejecting the application dated 11.01.2024 filed in Form 10AB under Rule 11AA of the I.T. Rules 1962, seeking approval under clause (iii) of the first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961 (In short ‘Act’).
2. The registry has noted that the appeal has been filed after delay of ‘193 days and the assessee has filed an affidavit explaining the delay.
(AY -) Sri Prasanna Venkatachalapathy Perumal Charitable Trust Having gone through the contents of the affidavit, we are satisfied that there is sufficient cause for the delay. Therefore, we condone the delay of ‘145’ days and proceed to adjudicate the grounds of both appeals raised by the assessee.
3. Grounds of appeal raised by the assessee is as under:
1. The order of the CIT(Exemptions), Chennai dated 19.07.2024 vide DIN & Order No. ITBA/EXM/F/EXM45/2024-25/1066853739(1) for the above mentioned Assessment Year is contrary to law, fact and in circumstances of the case.
2. The CIT(Exemptions), Chennai erred in dismissing the application filed in Form No. 10AB dated 11.01.2024 in seeking recognition for the appellant Trust under Section clause (iii) of first proviso to sub- section (5) of section 80G of the Act without assigning proper reasons and justification.
3. The CIT(Exemptions), Chennai failed to appreciate that dismissal of the application filed in Form No. 10AB in seeking recognition without having examining the documents filed along with Form No. 10AB dated 11.01.2024 as well as in the response dated 03.06.2024 & 29.06.2024 in its entirety would demonstrate the complete non application of mind on his part, thereby vitiating the impugned order passed in its entirety. 4. The CIT(Exemptions), Chennai failed to appreciate that the entitlement of final recognition for the appellant trust would get fortified by the compliance of all conditions prescribed in relation thereto and hence ought to have appreciated that the findings in the rejection order should be considered as nullity in law. 5. The CIT(Exemptions), Chennai failed to appreciate that the reasons shown for the rejection of the plea for regular recognition with regard to activities of the trust being religious in nature were erroneous and ought to have appreciated that the activities clause refereed by them were erroneously construed as religious, thereby vitiating the decision to reject the registration on this count.
(AY -) Sri Prasanna Venkatachalapathy Perumal Charitable Trust 6. The CIT(Exemptions), Chennai failed to appreciate that reply dated 16.07.2024wherein the appellant trust had contented no "religious" activities were performed by the trust and that the clauses in the trust deed had pertained to activities which were charitable in nature, thereby vitiating the related findings.
The CIT(Exemptions), Chennai failed to appreciate that even in the context of mixed objects, there was no scope or power for him to reject the plea for tax exemption and ought to have appreciated that in the process, the judicial trend on this issue was completely overlooked.
The CIT(Exemptions), Chennai failed to appreciate that the order under consideration was passed out of time, invalid, passed without jurisdiction and not sustainable both on facts and in law.
The CIT(Exemptions), Chennai failed to appreciate that there was no effective/proper opportunity given before passing the impugned order including non granting of personal hearing and any order passed in violation of the principles of natural justice is nullity in law.
The Appellant craves leave to file additional grounds/arguments at the time of hearing.
Brief facts of the case are as under:
The assessee was asked to show cause as to why its application dated 11.01.2024 in Form No. 10AB should not be rejected on account of irregularities/inconsistencies/anamolies. The applicant was requested to furnish its objections in this regard, if any, on or before 16.07.2024, either in person or through an Authorized Representative or by uploading online in the e-filing portal. The above notice was duly served on the applicant by e-mode through ITBA/e-filing portal as per law.
(AY -) Sri Prasanna Venkatachalapathy Perumal Charitable Trust In response to the Show Cause Notice, the applicant has uploaded its reply on 16.07.2024 and submitted that due to an oversight, had inadvertently selected religious cum charitable trust in Form 10AB. They also placed reliance on their Trust deed and supplementary deed which speaks about its objects and purpose. However, the Ld.CIT(E ) has rejected the application filed by the applicant dated 11.01.2024 in Form 10AB u/s.80G(5)(iii) seeking approval u/s 80G(5)(iii) of the Act by assigning the following reasons: i) The applicant in the application filed in Form 10AB mentioned the nature of activity of the trust as 'Religious cum Charitable' and in the object column, it has mentioned 'Religious' as one of the objects. As per the provisions of section 80G(5) any institutions or funds established only in India for a Charitable purpose will be granted approval under this section. ii) In the verification column of the application in Form 10AB. SANKARASUBRAMANIAN SATHIYANARAYANAN, Managing Trustee of the applicant has declared that the details given in the form are true and correct to the best of knowledge and belief. The Verification Column of the application in Form 10AB is reproduced here for the sake of clarity. Verification I SANKARASUBRAMANIAN SATHIYANARAYANAN, son of SANKARASUBRAMANIAN, hereby declare that the details given in the form are true and correct to the best of my knowledge and belief. I further undertake to communicate forthwith any alteration in the terms of the Trust, or in the rules governing the Institution, made at any time hereafter. I further declare that I am filling this form in my capacity as TRU, (designation) having PAN BRVPR8220C and that I am competent to file this form and verify it. Name: SANKARASUBRAMANIAN SATHIYANARAYANAN (AY -) Sri Prasanna Venkatachalapathy Perumal Charitable Trust Place: TRICHY Date: 11-Jan-2024 iii) The CIT (E) can grant approval only based on the application filed by the applicant in Form 10AB. The System also process the application based on the application filed by the applicant. Processing of application and granting of approval are carried in ITBA and there is no functionality available in the system to change the objects mentioned in Form 10AB other than applied in the application filed in Form 10AB and grant approval. iv)Hence, approval for the application filed in Form 10AB as Religious cum Charitable cannot be accepted. In view of the above, the application in Form No. 10AB filed by the applicant on 11.01.2024 cannot be processed. 3.2 As explained in para 1 of this order, as per the second proviso to Section 80G(5) of the I.T.Act, 1961, if the application is made under first proviso to section 80G(5) and the Principal Commissioner or Commissioner has not satisfied, he can reject the application. 3.3 In view of the above facts and circumstances of the case, its application is not maintainable for the reasons stated above in para 3.1 of this order. Hence, the application filed by the applicant on 11.01.2024 in Form No. 10AB u/s 80G(5)(iii) seeking approval u/s.80G(5) of the I.T. Act, 1961 is rejected.
The assessee before us referred letter dated 16.07.2024 at page 206 of the paper book wherein the assessee stated as under:
We are a purely charitable trust, and we do not engage in any religious activities. Due to an oversight, we inadvertently selected 'religious cum charitable trust' in Form 10AB. We would like to draw your attention to the amendments in our supplemental deed, which clarifies our objects and purposes. Furthermore, we would like to explain that the mention of "Vedas, Upvedas, etc.' in our objects refers to the promotion of Indian culture and traditions, rather than any religious activity. We are committed to our core objective of (AY -) Sri Prasanna Venkatachalapathy Perumal Charitable Trust charitable work, and we seek your consideration in this matter. We have attached the supplemental trust deed for your Ready reference.
We draw attention to Clause 4(31) of our Trust Deed, which explicitly states that 'the Trust will carry out its activities without discrimination based on caste, creed, color, or religion. This provision reaffirms our commitment to operating as a public charitable trust, benefiting society at large without any religious or communal bias. We hereby confirm that our activities are purely secular and altruistic, aligning with the spirit of Section 80G(5) of the Income Tax Act. We are attaching the trust deed for your ready reference.
We have now provided all the necessary information and details as required by the department. We request that the kind officer consider this complete and accurate submission, and grant the approval accordingly.
However, the Ld.CIT(E) without considering the submissions dated 16.07.2024 has rejected the aforesaid application in Form No. 10AB u/s 80G(5)(iii) seeking approval u/s.80G(5) of the I.T. Act, 1961. We have also gone through the entire paper book filed by the assessee from pages (1-219) wherein trust deed in document No.1905 of 2005 dated 17.09.2025 and supplementary trust deed in document no.639 of 2006 dated 02.03.2006 are filed, wherein objections of the trust are elaborately mentioned.
(AY -) Sri Prasanna Venkatachalapathy Perumal Charitable Trust From the perusal of the record and paper book, we are of the considered view that the Ld.CIT(E) has not at all considered various documents including trust deeds placed on record before him. Hence without going into those documents, the Ld.CIT(E) was not right in holding that the application filed in Form-10AB has tenor of Religious cum Charitable.
Therefore, in the light of the above factual matrix, we set aside the order of the Ld.CIT(E) and remand back this appeal to the file of the ld.CIT(E) to consider a fresh the aforesaid application dated 11.01.2024 filed in Form 10AB u/s 80G(5)(iii) seeking approval u/s.80G(5) of the I.T. Act, 1961 after giving proper and adequate opportunity to the assessee to file of such documents/evidence to substantiate the application dated 11.01.2024 filed in Form 10AB as referred supra.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced on the 30th day of July, 2025, in Chennai.
Sd/- Sd/- (एस.आर.रघुनाथा) (मनु कुमाि गिरि) (S. R. RAGHUNATHA) (MANU KUMAR GIRI) लेखा सदस्य/ACCOUNTANT MEMBER न्यानयक सदस्य/JUDICIAL MEMBER चेन्नई/Chennai, ददनांक/Dated: 30th July, 2025. KB/- 1. अपीलार्थी/Appellant 2. प्रत्यर्थी/Respondent (AY -) Sri Prasanna Venkatachalapathy Perumal Charitable Trust 3. आयकरआयुक्त/CIT, Chennai / Madurai / Salem / Coimbatore. 4. विभागीयप्रविविवि/DR 5. गार्डफाईल/GF