PENNAM FOUNDATION,HYDERABAD vs. CIT(EXEMPTION), HYDERABAD

That the order of the learned CIT(Exemptions) is arbitrary and contrary to the provisions of the Income Tax Act, 1961 and passed without proper application of mind in the facts and circumstances of the case.

The appellant was under the bonafide impression that the approval for final registration under Section 80G would be granted, in the absence of any objection raised by the Learned CIT(exemption) prior to the issuance of the final rejection order. Furthermore the appellant had submitted the required information properly and completely in response to all the notices issued.

That the Appellant has been duly registered under Section 12AB of the Income Tax Act, 1961 and its activities are entirely charitable in nature, which entitles it to registration under Section 80G.

That the rejection of the application is based on surmises and conjectures, rather than being supported by any concrete evidence that indicates non-compliance or misuse of the provisions. 2. Succinctly stated, the assessee trust was granted provisional registration under Clause (iv) of the “first proviso” to sub-section (5) of Section 80G of the Act by the Principal Commissioner of Income

The assessee trust, being aggrieved with the order passed by the CIT(Exemption), Hyderabad, rejecting its application for registration under Section 80G(5) of the Act, has carried the matter in appeal before us. 6. We have heard the Ld.Authorized Representatives of both parties, perused the orders of the lower authorities and the material available on record. 7. We find that though the CIT(Exemption) had observed in his order that the assessee trust had furnished only partial information, but he had failed to specify what particular information was not provideD, Further, we find that the CIT(Exemption) had observed that no substantial activities that were charitable in nature were being carried out by the assessee trust, which, thus, was in violation of the provisions of section 80G of the Act. Accordingly, the CIT(Exemption), based on his aforesaid observations, had declined the application filed by the assessee trust for registration u/s 80G of the Act. 8. We have given thoughtful consideration and are unable to comprehend that, on what basis and reasoning, the CIT(Exemption) has observed that no substantial activities which were charitable in nature were being carried out by the assessee trust. We find that there is no 5 Pennam Foundation whisper in his order about any such activity of the assessee trust, which as per him was not found to be charitable in nature. Although the assessee trust vide its replies dated 22.07.2024 (Page Nos.76-154 of APB), dated 09.09.2024 (Pages Nos.155-208 of APB); and dated 25.11.2024 (Pages Nos.209-269 of APB), had filed before the CIT(Exemption) the requisite details along with supporting documentary evidence to substantiate its charitable activities, but we find that he had not adversely commented on the same to support his observation that the activities of the assessee trust, based on the submissions filed before him were not found to be charitable in nature. 9. We have thoughtfully considered the order passed by the ClT(Exemption), and are of the considered view that the impugned order is a non-speaking order. The ClT(Exemption) has not brought on record any finding or material analysis to substantiate how and in what manner the activities of the trust were not charitable in nature. Nor has he articulated which information was missing, despite the assessee trust furnishing a detailed reply along with supporting documents. We are of a firm conviction that the rejection by the ClT(Exemption) of the application filed by the assessee trust for regular registration without passing a reasoned order violates the principles of natural justice. It will be apposite to observe that non-speaking, cryptic, and mechanical

निर्धाररती/The Assessee : M/s Penna Foundation, Plot No.260, Krishi Allure, Kavuri Hills, Ranga Reddy District, Hyderabad 2. रधजस्व/ The Revenue : CIT (Exemptions), Hyderabad, Aaykar Bhavan, Opp. LB Stadium, Basheerbagh, Hyderabad. 3. The Principal Commissioner of Income Tax (Exemption), Hyderabad 4. नवभधगीयप्रनतनिनर्, आयकर अपीलीय अनर्करण, हैदरधबधद / CIT-DR, ITAT, Hyderabad 5. गधर्ाफ़धईल / Guard file