DR M BHANU PRASAD MEMORIAL TRUST,KAKINADA vs. CIT (EXEMPTION) , HYDERABAD

The brief facts of the case are that, the assessee is a trust, had applied for registration u/s.80G of the Income Tax Act, 1961 (“the Act”) in Form no.10AB. The Ld. CIT(E) rejected the grant of registration of the assessee vide his order dated 11.12.2024 in Form no.10AD alleging that no substantial charitable activities are being carried out by the assessee. Aggrieved with the order of Ld. CIT(E), the assessee is in appeal before the Tribunal.

The learned Authorised Representative (“Ld. AR”) submitted that the assessee is a trust duly registered under Section 12A of the Act as evident from Form No. 10AC dated 02.122.2022 placed at page nos. 103–104 of the paper book, granting registration for the period from Assessment Year 2022–23 to Assessment Year 2026–27. The Ld. AR contended that having once recognised the charitable nature of the assessee’s objects and activities while granting registration under Section 12A, the rejection of the application under Section 80G on the ground that no substantial charitable activities are being undertaken is inconsistent and contradictory. Further, the Ld. AR drew our attention to page nos. 1 to 146 of the paper book, which contain the details of notices issued by the Ld. CIT(E), submissions made in response to notices issued by the Ld. CIT(E) and various documentary evidences filed by the assessee before the Ld. CIT(E). It was submitted that these materials were filed before the authority, but the Ld. CIT(E) passed the impugned order without making any reference to or analysis of these documents, thereby violating the principles of natural justice. The Ld. AR thus prayed for setting aside the impugned order and remitting the matter back to the file of the Ld. CIT(E) for fresh adjudication after affording an opportunity of hearing.

The learned Departmental Representative (“Ld. DR”) supported the impugned order passed by the Ld. CIT(E). It was submitted that the grant of approval under Section 80G is a distinct and independent process, and that mere registration under Section 12A does not automatically entitle an assessee to 80G approval.

We have considered the rival submissions and perused the material available on record. It is undisputed that the assessee was granted registration under Section 12A of the Act vide Form 10AC dated 02.12.2022 placed at page nos. 103–104 of the paper book, for the period from Assessment Year 2022–23 to Assessment Year 2026–27. However, in the impugned order in Form 10AD dated 11.12.2024, the application for registration under Section 80G of the Act has been rejected summarily on the ground that the assessee did not carry out substantial charitable activities. We find merit in the submission of the Ld. AR that this conclusion was reached without any discussion of the documentary evidences placed before the authority. On a plain reading, the impugned order lacks reasoning and does not identify any specific deficiencies in the submissions or documents furnished by the assessee. It is a non-speaking order, which renders it unsustainable in the eyes of law. In view of the above, and in the interest of justice, we deem it appropriate to set aside the impugned order and restore the matter to the file of the Ld. CIT(E) with the directions that the Ld. CIT(E) shall examine afresh the application in Form 10AB, taking into account the submissions and documents already filed. We also direct that the assessee shall be permitted to file any further supporting material, if required and the Ld. CIT(E) shall provide an effective opportunity of hearing.

In the result, the appeal of the assessee is allowed for statistical purposes in the terms indicated above.