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Facts
FMS Welfare Trust, provisionally registered under Sections 12A and 80G, applied for final registration under Sections 12AB and 80G of the Income Tax Act. The Ld. CIT(E) rejected both applications, stating that the Trust was not carrying out substantial charitable activities, despite the Trust having submitted a Trust Deed, provisional registrations, income tax returns, and other evidences.
Held
The Tribunal found that the CIT(E) passed a cryptic and non-speaking order without properly considering the relevant details and evidences provided by the appellant. The Tribunal set aside the CIT(E)'s order and remanded the matter back to the CIT(E) for fresh consideration of the applications for registration under Sections 12AB and 80G.
Key Issues
Whether the CIT(E) was justified in rejecting the Trust's applications for registration under Sections 12AB and 80G based on a non-speaking order and without considering the evidences of charitable activities.
Sections Cited
12A, 80G, 12AB, 2(15)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘A’ Bench, Hyderabad
Before: Shri Manjunatha G. & Shri Ravish Sood
ORDER PER. MANJUNATHA G., A.M: These appeals filed by the assessee are directed against the orders dated 09.12.2024 and 26.12.2024 of the learned Commissioner of Income Tax (Exemptions) [Ld.CIT(E)] - Hyderabad, relating to A.Y.2023-24. Since the facts are identical and issues are common, for the sake of convenience, these appeals were heard together and are being disposed of by this consolidated order.
The appellant, FMS Welfare Trust is registered under the Indian Trusts Act, 1882 with the main objects to establish and run orphanage or educational institutions, to provide monetary help for the needy students, to promote integrity and harmony among public, to provide and extend helping hand to the victims of natural calamities etc. The appellant Trust is provisionally registered u/s 12A and 80G of the Income Tax Act, 1961 (“the Act”) upto the A.Y.2024-25. The appellant Trust had filed an e- application in Form No.10AB, seeking registration u/s 12AB of the Act. The appellant Trust had also filed an e-application in Form No.10AB, seeking registration u/s 80G of the Act. The Ld.CIT(E) during the course of proceedings issued notice dated 05.07.2024 and called upon the appellant Trust to file relevant information in support of its application. In response, the appellant had filed its submissions and furnished relevant information, including copy of Trust Deed, copies of provisional registration u/s 12A and 80G of the Act and copies of income tax returns filed for the relevant assessment years. The Ld.CIT(E) issued one more notice dated 29.08.2024 and the appellant had furnished relevant details as called for by the Ld.CIT(E). The Ld.CIT(E), after considering relevant submissions of the assessee, rejected application filed in Form No.10AB, seeking registration u/s 12AB of the Act, on the ground that no substantial charitable activities are carried out by the appellant Trust, which is in violation of provisions of section 12AB of the Act. A similar order has been passed and rejected application filed in Form No.10AB, seeking registration u/s 80G of the Act with similar observations.
Aggrieved by the Ld.CIT(E) order, the appellant is now in appeal before the Tribunal.
The Ld.Counsel for the assessee, Shri C.Suresh, CA, referring to the main objects of the appellant Trust submitted that the appellant Trust is registered with main objects of providing relief to the poor, medical relief and other objects of general public utility, which is evident from the various objects clause of the Trust Deed. Further, the appellant Trust is carrying out its activities in accordance with its objects and also filed relevant evidences before the Ld.CIT(E) in support of its application. The Ld.CIT(E) without considering relevant details filed by the appellant, simply dismissed the application filed in Form No.10AB in a cryptic and non-speaking order on the ground that no substantial charitable activities are being carried out even though the appellant has filed relevant evidences to prove the activities carried out as per its objects. The Ld.Counsel for the assessee further referring to the provisions of section 12AB of the Act submitted that the Ld.CIT(E) on receipt of application may call for such documents or information from the trust or institution or make such inquiries as he thinks necessary and after satisfying himself about the objects of the Trust/institution pass an order in writing, registering or rejecting the application filed by the assessee. In the present case, the Ld.CIT(E) without even considering the relevant details filed by the assessee, rejected the application filed by the appellant in a non-speaking order. Therefore, he submitted that the order of the Ld.CIT(E) should be set aside and a direction may be given to the Ld.CIT(E) to consider the application filed by the appellant in accordance with law.
The Ld.CIT-DR, Shri B.Bala Krishna, on the other hand, fairly agreed that the Ld.CIT(E) has passed non-speaking order. However, fact remains that going by the main objects of the appellant Trust and its activities carried out for the relevant assessment year, there is necessity for verification of relevant activities carried out by the appellant in light of main objects and therefore, the matter may be remanded back to the file of the Ld.CIT(E) to consider the application, in light of relevant evidences filed by the appellant.
We have heard both the parties, perused the material on record and gone through the orders of the authorities below. The Ld.CIT(E) rejected the application filed in Form No.10AB, seeking registration u/s 12AB and 80G of the Act in one line finding that no substantial charitable activities are carried out by the appellant Trust, which is in violation of the provisions of 12AB and 80G of the Act. The order passed by the Ld.CIT(E) is cryptic and non-speaking, which is evident from the reasoning given by the Ld.CIT(E) to reject the application filed by the appellant in Form No.10AB. Further the appellant filed relevant details including copy of Trust Deed, copy of provisional registration u/s 12A and 80G of the Act, copies of income tax returns filed by the appellant Trust for the earlier assessment years and copy of notice issued by the Ld.CIT(E) and reply submitted by the assessee. Upon perusal of the relevant details filed by the appellant, we find that the main objects of the appellant Trust are charitable in nature as defined in section 2(15) of the Act, including relief of poor, medical relief and advancement of any other object of general public utility. Further, the appellant has also filed certain evidences including photocopies of various activities conducted by the appellant Trust for providing relief for poor, medical relief and any other object of general public utility. The Ld.CIT(E), without considering relevant details filed by the appellant, simply rejected the application filed in Form No.10AB in one line finding. Therefore, in our considered view, the Ld.CIT(E) erred in rejection of application filed by the appellant Trust for registration u/s12AB and 80G of the Act, even though the appellant has placed all plausible evidences to substantiate its application. Thus, we set aside the order passed by the Ld.CIT(E) and restore the issue back to the file of Ld.CIT(E) to consider the application filed by the appellant Trust in Form No.10AB, seeking registration u/s12AB and 80G of the Act.
In the result, both the appeals filed by the assessee are allowed for statistical purpose.
Order pronounced in the Open Court on 25th June, 2025.