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Facts
The assessee, The Retired Race Horse Welfare Society, applied for registration/approval under Section 80G(5) of the Income Tax Act for Assessment Year 2025-26. The CIT(Exemptions) rejected this application, alleging that the society had not carried out any substantial charitable activity.
Held
The Tribunal found that the CIT(Exemptions) rejected the application without considering the relevant details and records submitted by the assessee. The Tribunal set aside the impugned order and remanded the matter back to the CIT(Exemptions) for re-consideration, with directions to review all facts and records and provide the assessee an opportunity of hearing.
Key Issues
1. Whether the CIT (Exemptions) was justified in rejecting the assessee's application for approval under Section 80G(5) without properly appreciating the charitable activities carried out by the assessee. 2. Whether providing relief to retired racehorses constitutes a charitable purpose under Section 2(15) of the Income Tax Act.
Sections Cited
80G(5), 2(15), 12A, 12AB, 80G
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘DB-‘Bench, Hyderabad
Before: Shri Vijay Pal Rao, Vice-Shri Manjunatha, G.
आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘DB-‘Bench, Hyderabad Before Shri Vijay Pal Rao, Vice-President A N D Shri Manjunatha, G. Accountant Member आ.अपी.सं /ITA No.195/Hyd/2025 (िनधा�रण वष�/Assessment Year: 2025-26) The Retired Race Horse Vs. Commissioner of Income Welfare Society Tax (Exemptions) Hyderabad Hyderabad PAN:AABAT8634P (Appellant) (Respondent) िनधा��रती �ारा/Assessee by: CA C.S.Subrahmanyam & Adv. V. Siva Kumar राज� व �ारा/Revenue by:: Shri Narender Kumar Naik CIT(DR) सुनवाई की तारीख/Date of hearing: 08/07/2025 घोषणा की तारीख/Pronouncement: 08/07/2025 आदेश/ORDER Per Vijay Pal Rao, Vice President
This appeal filed by the assessee is directed against the order dated 16/12/2024 of the learned CIT (E), Hyderabad for the A.Y.2025-26 whereby the application of the assessee seeking registration/approval u/s 80G(5) of the Act was rejected.
The assessee has raised the following grounds of appeal: “1 The order of the CIT(E), Hyderabad is erroneous in law and on the facts of the case.
2. The CIT(E), Hyderabad erred in concluding in a very causal manner that the Society has not carried out any substantial charitable activity.
3. The CIT(E), Hyderabad erred in not appreciating the fact that providing relief to the horses which were retired from active tournament is a charitable purpose under Section 2(15), which is being pursued by the appellant from its inception on September 05, 2008.
4. The CIT(E), Hyderabad erred in not properly appreciating the charitable activity of providing healthcare to retired race horses being carried out by the appellant in the past periods as submitted in response to notices issued during the approval process.
5. The CIT(E), Hyderabad erred in not appreciating the charitable activity of the appellant, having perused the audited financials of the appellant for the past four years which evidenced the charitable activity.
6. The CIT(E), Hyderabad failed to appreciate that the charitable nature of the institution and the utilization of the funds for the charitable purposes has been conclusively examined at the time of grant of approval under section 12A.
7. The CIT(E), Hyderabad erred in not appreciating the fact that the Society has complied with all the conditions laid down under section 80G of the Income Tax Act.
8. The CIT(E) erred in not considering the submissions made by the appellant that entities pursuing similar object of providing health and care to animals were already granted registration under Section 80G, thus, the appellant is also entitled for such registration.
9. Any other ground that may be raised during the appellate proceedings with the prior permission from the Hon’ble Tribunal.
The appellant craves leave to add to, amend or modify the above grounds of appeal either before or at the time of hearing of the appeal, if considered necessary.”
The learned AR of the assessee has submitted that the CIT (Exemptions) has rejected the application of the assessee on the ground that no substantial activities which are charitable in nature are being carried out by the assessee Trust. The said finding of the CIT (Exemptions) is contrary to the record and facts and submitted that the assessee has duly complied with the notices issued by the CIT (Exemptions) and filed the relevant details and record vide letter dated 09/10/2024 placed at page Nos. 11 to 16 of the Paper Book and thereafter, vide letter dated 2/12/2024, placed at Page Nos. 44 to 47 of the paper book which is acknowledgement for filing the relevant details. However, the CIT (Exemptions) has rejected the application without considering the relevant record in support of the charitable activities carried out by the assessee. He has also pointed out that the assessee was granted registration u/s 12AB of the Act which is valid up to A.Y 2026-27. He has also relied upon the decision of this Tribunal in dated 9/6/2025 in case of Mahindra University vs. CIT (Exemptions). Thus, he has pleaded that the impugned order may be set aside, and the CIT (Exemptions) may be directed to grant approval u/s 80G of the Act.
On the other hand, the learned DR has relied upon the order of the CIT (Exemptions) and submitted that the CIT (Exemptions) has given the reasons that the assessee has failed to Page 3 of 5 prove that any charitable activity has been carried out by the assessee which is a mandatory requirement for granting approval u/s 80G(5) of the Act.
We have considered the rival contentions as well as the relevant material available on record. The assessee was granted provisional registration/approval in Form 10AC on 22/06/2022 valid from A.Y 2023-24 to A.Y 2025-26. Thereafter, the assessee filed the application in Form 10AB seeking regular approval u/s 80G of the Act on 16/12/2024 which was rejected by the learned CIT (Exemption) as under: “3. On perusal of the submissions made by the assessee, it is observed that no substantial activities which are charitable in nature are being carried out by the assessee trust, which is in violation of the provisions of the section 80G of the IT Act, 1961. In view of the above, the present application in form 10AB for registration u/s 80G is herewith rejected.”
Thus, it is manifest from the impugned order of the CIT (Exemptions) that the application of the assessee for approval u/s 80G was rejected on the ground that no substantial activities which are charitable in nature are being carried out by the assessee Trust. This finding of the CIT (Exemptions) shows that he has not taken into consideration the relevant details and record filed by the assessee in support of the charitable activities carried out by the assessee. The CIT (Exemptions) has not given any reference about the record filed by the assessee and accordingly, the impugned order of the CIT (Exemptions) is set aside and the matter is remanded to the record of the CIT
Page 4 of 5 (Exemptions) for re-consideration of the application of the assessee after considering all the relevant facts, details and record. Needless to say, before passing the fresh order, the assessee be given an appropriate opportunity of hearing.
In the result, appeal filed by the assessee is allowed for statistical purposes.