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Facts
The assessee, Just Blossom Foundation, is a charitable trust that applied for approval under Section 80G of the Income Tax Act. The Commissioner of Income Tax (Exemptions) rejected the application, citing a lack of substantial charitable activities. The assessee appealed this decision.
Held
The Tribunal observed that the CIT(E)'s order was a non-speaking order and did not address the documents submitted by the assessee. The Tribunal found this to be a violation of natural justice.
Key Issues
Whether the rejection order by the CIT(E) was justified, considering the documents provided by the assessee and if it was a speaking order.
Sections Cited
Section 12A, Section 80G, Section 80G of the Income Tax Act, 1961
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Income Tax Appellate Tribunal, Hyderabad ‘B’ Bench, Hyderabad
Before: SHRI RAVISH SOOD & SHRI MADHUSUDAN SAWDIA
आदेश/ORDER
PER MADHUSUDAN SAWDIA, A.M.:
This appeal is filed by M/s. Just Blossom Foundation (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Exemptions), Hyderabad (“Ld. CIT(E)”), dated 26.11.2024 for the A.Y. 2024-25.
At the outset, it is observed that there is a delay of 109 days in filing the present appeal before the Tribunal. The assessee has filed a petition for condonation of delay, explaining the reasons for such delay. We have perused the condonation petition and considered the submissions made by the Learned Authorised Representative (“Ld. AR”) as well as the Learned Departmental Representative (“Ld. DR”). Further, keeping in view the principle laid down by the Hon’ble Supreme Court, in the case of Vidya Shankar Jaiswal vs. The Income Tax Officer, Ward-2, Ambikapur in Special Leave Petition (Civil) Nos. 26310- 26311/2024, dated 31st January, 2025, wherein, the Hon’ble Supreme Court has held that a justice-oriented and liberal approach should be taken while dealing with the application filed by an appellant seeking condonation of the delay in filing of the appeal, we are inclined to condone the delay of 109 days in filing of this appeal before us and admit the appeal for adjudication.
The grounds of the assessee are as under :
The brief facts of the case are that, the assessee is a charitable trust. It had filed an application in Form No. 10AB on 14.05.2024 seeking approval under Section 80G of the Income Tax Act, 1961 (“the Act”). After considering the submissions made by the assessee, the Ld. CIT(E) rejected the application of the assessee by order dated 26.11.2024 in Form No. 10AD, citing that “no substantial charitable activities were being carried out by the trust”.
Aggrieved with the order of Ld. CIT(E), the assessee is in appeal before the Tribunal. The Ld. AR submitted that, during the course of proceedings, the Ld. CIT(E) issued notices to the assessee on 10.06.2024, 21.08.2024, and 03.10.2024, which were duly complied with by the assessee on 11.06.2024, 23.08.2024 and 09.10.2024, respectively. In response to the notices, the assessee submitted all requisite documents including the Trust Deed, audited financial statements, activity reports, photographs, bank statements, and other material substantiating its charitable activities. These are placed in the paper book from page nos. 1 to 108. She further submitted that, the Ld. CIT(E) rejected the application of the assessee without pointing out any specific deficiency in the documents furnished. It was also submitted that the impugned order is a non-speaking order, violating principles of natural justice. The Ld. AR prayed that the matter be remanded back to the Ld. CIT(E) to consider the submissions afresh and pass a reasoned and speaking order, after giving the assessee an effective opportunity of being heard.
The Ld. DR supported the order of the Ld. CIT(E), stating that the Ld. CIT(E) has jurisdiction to assess the genuineness of activities before granting approval under Section 80G of the Act. However, he fairly agreed that the impugned order does not record any specific finding or reasoning in relation to the material placed on record.
We have heard the rival contentions and perused the material available on record. It is an undisputed fact that the assessee had responded to all the notices issued by the Ld. CIT(E) and furnished relevant documents substantiating its charitable activities. These include photographs, financial statements, and activity reports (page nos. 1 to 108 of the paper book). On perusal of the impugned order passed in Form No. 10AD, we find that the Ld. CIT(E) has not specifically referred to any of the documents filed by the assessee or given any finding as to why the evidence was insufficient. The order merely states in a cryptic manner that no substantial charitable activities were being carried out by the assessee, which is not sustainable in law. A non- speaking order rejecting statutory approval, without dealing with the submissions and evidence furnished, is violative of the principles of natural justice. In view of the above, we are inclined to set aside the impugned order and restore the matter to the file of the Ld. CIT(E) for de novo adjudication. The Ld. CIT(E) is directed to examine all the documents submitted by the assessee, grant an opportunity of personal hearing, permit filing of any additional documents, and thereafter pass a speaking and reasoned order in accordance with law.
In the result, the appeal filed by the assessee is allowed for statistical purposes.