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Facts
The assessee society filed an application for registration under Section 10(23C) of the Income Tax Act, 1961. The CIT(E) rejected the application stating that no substantial charitable activities were being carried out. The society runs an engineering college, which it considers a charitable activity.
Held
The Tribunal held that the CIT(E)'s order rejecting the application was cryptic and lacked application of mind. The Tribunal found that running an engineering college is a charitable activity and set aside the CIT(E)'s order.
Key Issues
Whether the operation of an engineering college by the assessee society constitutes a substantial charitable activity for the purpose of registration under Section 10(23C) of the Income Tax Act, 1961.
Sections Cited
10(23C), 147, 148, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, HYDERABAD “B” BENCH: HYDERABAD
Before: SHRI MANJUNATHA G & SHRI RAVISH SOOD
Date of Hearing : 07.05.2025 Date of Pronouncement : 07.05.2025 ORDER PER MANJUNATHA G. :
This appeal has been filed by the Assessee- Society against the order dated 16.12.2024 of the learned Commissioner of Income Tax-(Exemption, Hyderabad, in rejecting the application in Form-10AB submitted by the Assessee-Society for registration u/sec.10(23C) of the Income Tax Act, 1961 [in short “the Act”].
2 ITA.No.223/Hyd./2025 2. Briefly stated facts of the case are that, the appellant is a society registered under the Societies Registration Act, 2001. The appellant is a charitable institution engaged in the activity of establishing educational institutions to provide technical education. It is running educational institution being Engineering College under the name International School of Technology and Science for Women in the State of Andhra Pradesh since 2011. The appellant had granted provisional registration under section 10(23C) of the Act for the period 2024-2025 to 2026-2027. Subsequently, the appellant filed Form 10AB seeking permanent registration under section 10(23C) of the Income tax Act 1961 [in short “the Act”]. The CIT(E) rejected the application filed by the assessee in Form-10AB on the ground that, no substantial activities which are charitable in nature are being carried out by the appellant, which is in violation of the provisions of section 10(23C) of the Income Tax Act 1961.
CA G. Giridhar, Learned Counsel for the Assessee, referring to various documents including relevant 3 ITA.No.223/Hyd./2025 objects of the appellant society submitted that, the appellant society is registered under section 10(23C) of the Act. The society is imparting education which itself is a ‘charitable activity’. Therefore, the observation of the CIT(E) that, no substantial charitable activity is carried out by the appellant society is contrary to material on record. Therefore, he submitted that, the order of the learned CIT(E) should be set-aside and application filed by the appellant in Form-10AB should be accepted.
MS. M. Narmada, learned CIT-DR, on the other hand, supporting the order of the learned CIT(E) submitted that, the appellant itself is admitted that, it has furnished part information in response to notice issued by the CIT(E). In absence of complete information, the learned CIT(E) has rightly held that, no substantial charitable activity has been carried out by the appellant society. However, the appellant society has filed relevant details to establish the fact that, it is running Engineering College and, therefore, the matter may be remanded back to the file of CIT(E) to verify the claim and to consider the application as per Law.
4 ITA.No.223/Hyd./2025 5. We have heard both the parties, perused the material on record and the orders of the authorities below. The order passed by the CIT(E) in rejecting the application filed by the appellant in Form-10AB is cryptic and in one line. The CIT(E) rejected the application filed by the appellant stating that, no substantial activities which are charitable in nature are being carried out by the appellant. On the other hand, the facts brought on record by the appellant including relevant application in Form-10AB clearly establish the fact that, the appellant society is provisionally registered under section 10(23C) of the Act being charitable institution after considering the relevant objects and activities carried out by the appellant society. Further, the appellant society is running an Engineering College in the name of International School of Technology and Science for Women since 2011 and imparting education. Since the activities carried out by the appellant being running Engineering College itself is a ‘charitable activity’ falls under the definition of “Education”, in our considered view, the observation of the CIT(E) that, no 5 ITA.No.223/Hyd./2025 substantial charitable activities are being carried out by the appellant society is contrary to facts available on record and without any application of mind. Thus, we set aside the order of the CIT(E) and restore the issue back to the file of CIT(E) to re-consider the application filed in Form-10AB seeking for registration of the appellant society under section 10(23C) of the Act. The CIT(E) is directed to consider the application filed by the appellant society by providing adequate opportunity of being heard in accordance with Law.
In the result appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 07.05.2025.