KASI VISVANATHAR KOVILOOR FOUNDATION,SIVAGANGA vs. DCIT / ACIT, EXEMPTIONS , CHENNAI

rejecting the application filed by the assessee dated 30.05.2024 in Form No.10AB under Rule 11AB of the Income Tax Rules, 1962 (hereinafter referred to as ‘the Rules‘) seeking approval u/s.80G(5)(iii) of the Act.

At the outset, the Ld.AR of the assessee pointed out that even though the Ld.CIT(E) vide order dated 12.11.2024 has allowed the grant of regular registration u/s.12AB (1) of the Act for five (5) years from AYs 2024-25 to 2028-29, after it was granted provisional registration initially u/s.12AB of the Act vide earlier order dated 28.12.2023, but its grievance is that Ld CIT(E) while granting registration has treated the nature of its activity as “religious-cum-charitable” only because the assessee inadvertently mentioned its object/nature of activity as “religious-cum- charitable” i.e. in Column-3 of Form 10AB; According to the Ld.AR, the nature of the activity of the assessee is purely charitable in nature and pointed out that there is no religious activity stated anywhere in the objects of the assessee-company. Therefore, the plea of the Ld.AR is that the inadvertent mistakes in Form 10AB as well as in the replies given by it shouldn’t be the basis for treating the assessee as “religious-cum- charitable” and in order to support such a contention, drew our attention to the ‘Memorandum of Association’ of the assessee company found kept at Page Nos.1-7 of the Paper Book which was uploaded for perusal of the Ld.CIT(E). Taking us through the ‘Memorandum of Association’ as well as ‘Articles of Association’ of the assessee company, the assessee prima & 58/Chny/2025 (AY -) Kasi Visvanathar Koviloor Foundation facie has shown that the assessee doesn’t have any objects of religious nature whereas it was formed for discharging charitable activities viz., education to poor, addressing hunger and food insecurity, etc. Thus, according to the Ld.AR, when the assessee company’s main objects were only to do charitable activities, it couldn’t have been treated as “religious- cum-charitable” organization. Further, according to the Ld.AR, by pronouncing assessee as a “religious-cum-charitable” organization, the Ld.CIT(E) has denied the approval u/s.80G of the Act, which impugned action, the assessee has challenged by filing appeal numbered as ITA No.58/Chny/2025.

Brief facts are that assessee ‘a Section 8 Company’ which was formed on 18.11.2023 has been carrying on charitable activities. The objects of ‘a Section 8 Company’ are, inter alia, to establish building and run schools, colleges for primary, secondary and higher education in any field and to help addressing hunger and to prove for deserving public clean nutritious food; to facilitate medical relief to the poor and under privilege public, etc. The assessee is noted to have filed for provisional registration u/s.12AB of the Act which was granted vide order dated 28.12.2023 for three (3) years from AYs 2024-25 to 2026-27 as well as it was granted provisional registration u/s.80G of the Act for the same period. Thereafter, the assessee is noted to have filed online application in From No.10AB under clause (iii) of section 12A(1)(ac) of the Act & 58/Chny/2025 (AY -) Kasi Visvanathar Koviloor Foundation seeking registration u/s.12AB of the Act and while doing so, the assessee inadvertently mentioned the nature of its activity in Column-3 of Form- No.10AB as “religious-cum-charitable” which was allowed by the Ld.CIT(E) by order dated 12.01.2024 by granting registration to the assessee as “religious-cum-charitable institution”, which action is assailed before us. In this respect, the Ld.AR pointed out that despite, the assessee having uploaded the ‘Memorandum of Association & Articles of Association’ before the Ld.CIT(E) wherein there is not even a word of religious activity, the Ld.CIT(E) on the strength of mistake in the Form as well as certain replies of the assessee granted registration to assessee- company u/s.12AB of the Act as “religious-cum-charitable institution” which impugned action of the Ld.CIT(E) is erroneous, because, the objects of the assessee can’t be changed by the assessee company without making amendments as per law i.e. as per Company’s Act to its ‘Memorandum of Association & Articles of Association’. Therefore, the assessee aggrieved by the impugned action of the Ld.CIT(E) has filed an appeal No.57/Chny/2025 praying that the Ld.CIT(E) be directed to treat the assessee company as Charitable Institution.

Per contra, the Ld.DR submitted that the Ld.CIT(E) can’t be faulted because assessee company itself has filled up the Form 10AB and has even replied initially as it is “religious-cum-charitable”. Therefore, even if the assessee later asserted before the Ld.CIT(E) that its object was only & 58/Chny/2025 (AY -) Kasi Visvanathar Koviloor Foundation to do charitable activity, the Ld.CIT(E) has rightly held it to be “religious- cum-charitable” and doesn’t want us to interfere.

Having heard both the parties and after perusal of the records, it is noted that the assessee is ‘a Section 8 Company’ incorporated in 2023 and has applied for provisional registration u/s.12AB/80G of the Act which was granted for three (3) years vide order dated 28.12.2023 [refer Page Nos.24 to 27 of the Paper Book]. Thereafter, the assessee is noted to have filed an application in Form 10AB for registration u/s.12(1)(ac)(iii)

In Owners & Parties interested in MV Vali Perov. Fernandeo Lopez AIR 1989 SC 2206, it was observed - Rules of procedure are not by themselves an end but means to achieve the ends of justice. Rules of procedure are tools forged to achieve justice and are not hurdles to obstruct the pathway to justice. Construction of a rule of procedure which promotes justice and prevents its miscarriage by enabling the Court to do justice in myriad situations, all of which cannot be envisaged, acting within the limits of permissible construction, must be preferred to that which is rigid and negatives the cause of justice. Procedure is meant to subserve and not rule the cause of justice

In the light of the discussion (supra), we direct the Ld.CIT(E) to consider the application as stated (supra) and decide on merits granting of registration as Charitable Institution in accordance to law after hearing the assessee. the main grievance of the assessee is against action of the Ld.CIT(E) rejecting the application for registration u/s.80G on the ground that since the assessee is “religious- cum-charitable institution”, it can’t be granted approval u/s.80G of the Act. Since we have already set aside the action of the Ld.CIT(E) (supra) back to his file for de novo examination, we set aside the impugned action of the Ld.CIT(E) and direct him to examine the grant of approval u/s.80G & 58/Chny/2025 (AY -) Kasi Visvanathar Koviloor Foundation of the Act after deciding the application for grant of registration u/s.12AB of the Act as Charitable Institution after hearing the assessee. The assessee is directed to file all relevant documents in accordance to law.

In the result, appeals filed by the assessee are allowed for statistical purposes.