FEHMICARE FOUNDATION,HYDERABAD vs. CIT (EXEMPTIONS), HYDERABAD

The brief facts of the case are that, the assessee is a trust, was granted provisional registration under section 12A(1)(ac)(vi) of the Income Tax Act, 1961 (“the Act”) for the period from Assessment Year 2022–23 to Assessment Year 2026–27 vide Form No. 10AC dated 07.01.2022. Subsequently, the assessee filed an application for final registration under section 12A(1)(ac)(iii) of the Act in Form No. 10AB on 27.08.2024. The Ld. CIT(E), however, rejected the application for registration under section 12AB of the Act vide order dated 13.02.2025 passed in Form No. 10AD, stating that the activities of the trust were not found to be in accordance with its stated objects as per the trust deed.

Aggrieved by the order of Ld. CIT(E) , the assessee has filed the present appeal before the Tribunal. The learned Authorised Representative (“Ld. AR”) submitted that the assessee trust is engaged in charitable activities as per its object clause, which includes providing financial assistance to poor students and medical assistance to needy persons. Our attention was drawn to Clause 3 of the trust deed (placed at Page No. 3 of the paper book), which clearly enumerates the charitable objects of the trust.

Further, in support of the genuineness of the activities, the Ld. AR invited our attention to the submissions filed before the Ld. CIT(E) along with the acknowledgments of such filings, placed at page nos. 82 to 92 of the paper book. It was submitted that the assessee furnished details of donations received during the financial years 2021–22, 2022–23, and 2023–24 (placed at page nos. 66 to 68 of the paper book), as well as the list of donations made to various persons for medical aid and educational assistance (placed at page nos. 69 to 71 of the paper book). The Ld. AR argued that the Ld. CIT(E) failed to consider the aforesaid submissions and supporting documents and passed a non-speaking order without identifying any specific defect or inconsistency in the activities of the trust. It was submitted that the rejection was mechanical and devoid of any reasoning. The Ld. AR prayed for restoration of the matter to the file of the Ld. CIT(E) for fresh adjudication on merits, after granting an opportunity of being heard.

Per contra, the Learned Departmental Representative (“Ld. DR”) relied on the findings of the Ld. CIT(E) as contained in the impugned order. However, the Ld. DR fairly accepted that the order of the Ld. CIT(E) does not adequately deal with the detailed submissions and evidences filed by the assessee and lacks proper reasoning.

We have heard the rival submissions and perused the material available on record. We find that the assessee had filed its application in Form No. 10AB on 27.08.2024 seeking final registration under section 12AB of the Act. We have gone through Clause 3 of the trust deed placed at Page No. 3 of the paper book and found that the trust’s charitable objectives include providing educational and medical aid to the underprivileged. We have also perused the documentary evidences filed by the assessee before the Ld. CIT(E), including (i) submission before the Ld. CIT(E) (Page Nos. 82 and 92 of the paper book), (ii) list of donations received by the assessee during F.Ys. 2021–22 to 2023–24 (Page Nos. 66 to 68 of the paper book), and (iii) list of donations given by the assessee during F.Ys 2021-22 to 2023-24 (Page Nos. 69 to 71 of the paper book), indicating the conduct of charitable activities.

We have also gone through para no.3 of the Annexure to Form No.10AD dated 13.02.2025, which is to the following effect :

On perusal of the above, we find that the Ld. CIT(E) has merely stated that the activities of the trust were not in line with its objectives, without recording any specific reasons or referring to any discrepancy in the evidences submitted by the assessee. The order does not deal with the documentary evidences submitted by the assessee and appears to have been passed without considering the same. In our considered view, the rejection of the application in such a summary and non-speaking manner amounts to denial of natural justice. The Ld. CIT(E) ought to have examined the documents submitted and given a clear finding supported by reasons before concluding that the activities were not in accordance with the stated objects. Accordingly, we 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) shall consider all the submissions and evidences filed by the assessee and pass a reasoned and speaking order after granting due opportunity to the assessee to present its case and file any additional evidence in support of its claim.

In the result, the appeal of the assessee is allowed for statistical purposes. ITA No.734/Hyd/2025

The issues involved in this appeal is identical to the issues involved in the appeals in wherein we have allowed the appeal of the assessee for statistical purposes. Therefore, our discussion and findings in are mutatis mutandis applicable to this appeal also. As the appeal of the assessee in ITA No.733/Hyd/2025 has been allowed, this appeal is also allowed for statistical purposes.

To sum up, both the appeals filed by the assessee are allowed for statistical purposes.