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Facts
The assessee, a society registered under the Societies Act, obtained registration under Section 12AB of the Income Tax Act, 1961. Its application for regular approval under Section 80G(5) was subsequently rejected by the CIT (Exemption) on the ground that no substantial charitable activities were being carried out.
Held
The Tribunal found the CIT(E)'s rejection order to be cryptic, non-speaking, and lacking proper application of mind, especially considering the assessee's prior Section 12AB registration. Consequently, the impugned order was set aside, and the matter was remanded back to the CIT(E) for reconsideration of the Section 80G(5) application, with directions to examine all relevant records.
Key Issues
Whether the CIT(E)'s rejection of the assessee's Section 80G(5) approval application was justified given the prior Section 12AB registration, and if the rejection order properly considered all submitted records and charitable activities.
Sections Cited
80G, 80G(5), 12AB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘ DB-B ‘ Bench, Hyderabad
Before: Shri Vijay Pal Rao, Vice-Shri Manjunatha, G.
(िनधा�रण वष�/Assessment Year: 2025-26) Veedhi Balala Sneha Vs. Commissioner of Income Sangam, Hyderabad Tax (Exempotion) PAN:AAAAV3788P Hyderabad (Appellant) (Respondent) िनधा��रती �ारा/Assessee by: Shri M V Anil Kumar, Advocate राज� व �ारा/Revenue by:: Shri Narender Kumar Naik, CIT(DR) सुनवाई की तारीख/Date of hearing: 04/06/2025 घोषणा की तारीख/Pronouncement: 06/06/2025 आदेश/ORDER
Per Vijay Pal Rao, Vice President
This appeal filed by the assessee is directed against the order dated 13/12/2024 of the learned CIT (E) whereby the application for approval u/s 80G of the Act was rejected.
The assessee has raised the following grounds of appeal:
1. Your appellant submits that the CIT (E) has erred in rejecting the, application for registration under section 80G ignoring the submission made. The rejection is bad in law.
2. Your appellant submits that the CIT(E) has erred in holding that there is no substantial charitable activity being carried out by ignoring the submission made in response to the notices issued.
3. Your appellant submits the CIT (E) having granted the registration under section 12AB ought not to have rejected the registration under section 80G(5) is bad in law.
4. Your appellant submits that the CIT(E ) ought to have provided another hearing having submitted the opportunity of information asked for nature activities taken up by till date. The rejection of the registration is bad in law. For these and such other grounds that may be urged at the appellant prays that the order time of hearing, your passed rejecting the application u/s 80G(5) be set aside.”
The assessee is a society registered under the Societies Act having the objects to improve the quality of life of street children through welfare, social and economic viable projects. The assessee filed for registration u/s 12AB of the I.T. Act, 1961 which was granted on 17th February, 2024. The assessee also applied for the approval u/s 80G(5) which was granted provisionally on 7th April, 2022. The assessee then applied for regular approval u/s 80G(5) vide application dated 26/06/2024, however, the same was rejected by the learned CIT (E).
The learned AR of the assessee has submitted that the assessee filed all the relevant details and documents showing the charitable activities carried out by the assessee and therefore, the assessee complied with the notices issued by the learned CIT (E). However, while passing the impugned order, the learned CIT (E) has rejected the application on the ground that no substantial
Page 2 of 5 charitable activities are being carried out by the assessee trust. Thus, the learned AR has submitted that the details and documents filed by the assessee have not been considered by the learned CIT (E) while passing the impugned order and therefore, the same is not sustainable in law and liable to be set aside. The learned AR has pleaded that the learned CIT (E) may be directed to grant the registration/approval u/s 80G(5) of the Act to the assessee.
On the other hand, the learned DR has submitted that the registration granted u/s 12AB would not ipso fact entitle the assessee to get the approval u/s 80G(5) until and unless the competent authority satisfied that the assessee has actually carried out the charitable activities as required u/s 80G of the Act. He has relied upon the impugned order of the learned CIT (E).
We have considered the rival contentions as well as the relevant material available on record. The learned CIT (Exemption) has rejected the application of the assessee by recording the reasons in para 3 of the impugned order as under: “3. On perusal of the submissions of the assessee, it is observed that no substantial charitable activities are being carried out by the assessee trust, which is in violation of provisions of section 80G of the IT Act, 1961. In light of the above facts, the present application in form 10AB for registration u/s 80G is herewith rejected.”
There is no dispute that the assessee was already granted registration u/s 12AB of the Act and thereby the objects
Page 3 of 5 of the assessee trust have been considered as charitable in nature as well as the activities of the assessee was also considered as genuine for achieving the objects of the assessee trust. While passing the impugned order, the learned CIT (E) has stated that no substantial charitable activities are being carried out by the assessee trust. These reasons given by the learned CIT (E) are cryptic and non-speaking as nothing has been discussed about the record filed by the assessee showing the activities carried out as well as the record filed by the assessee at the time of seeking registration u/s 12AB of the Act. Once the assessee has reponded to the notices issued by the learned CIT (E) which is also not disputed in the impugned order, then a factual finding ought to have been given by considering the relevant facts and record available before the learned CIT (E). Thus, we have came across identical orders passed by the learned CIT (E) in other cases while deciding the application for registration u/s 12AB as well as approval u/s 80G of the I.T. Act, 1961 in a stereotype manner giving the reasons in verbatum leading to the inference that there is no application of mind on the part of the learned CIT (E) while passing the impugned order. Accordingly, the impugned order of the learned CIT (E) is set aside and the matter is remanded to the record of the learned CIT (E) for reconsideration of the application of the assessee for approval u/s 80G(5) of the Act after considering the relevant record and details filed by the assessee as well as further relevant record required to be filed by the assessee.
In the result, appeal filed by the assessee is allowed for statistical purposes.