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Facts
Ikka Learning Foundation, a Section-8 company, applied for registration under Section 12AB(1) and approval under Section 80G(5) of the Income Tax Act, 1961. The CIT(E) granted Section 12AB(1) registration but rejected the Section 80G(5) application, citing a lack of substantial charitable activities, which the assessee challenged before the Tribunal.
Held
The Tribunal found that the CIT(E) rejected the Section 80G application without proper reasoning or considering the documentary evidence and charitable activities of the assessee-trust. Concluding that the trust is prima facie eligible for Section 80G registration, the Tribunal set aside the CIT(E)'s order and remitted the matter back for re-verification and reconsideration.
Key Issues
Whether the CIT(E) was justified in rejecting the application for registration under Section 80G of the Income Tax Act, 1961, without proper consideration of the assessee's charitable activities and submitted evidence.
Sections Cited
80G, 12AB(1), 80G(5)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, HYDERABAD “B” BENCH: HYDERABAD
Before: SHRI MANJUNATHA G & SHRI RAVISH SOOD
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “B” BENCH: HYDERABAD BEFORE SHRI MANJUNATHA G, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA.No.197/Hyd./2025 [U/sec.80G of the Income Tax Act, 1961] The Commissioner of Ikka Learning Foundation, Hyderabad – 500 058. Income Tax (Exemption), vs. Telangana. Hyderabad – 500 004. PAN AAHCI0161Q Telangana. (Appellant) (Respondent) For Assessee : CA A Akhil Yadav For Revenue : MS. M. Narmada, CIT-DR Date of Hearing : 30.04.2025 Date of Pronouncement : 30.04.2025 ORDER PER MANJUNATHA G. :
This appeal has been filed by the assessee against the order dated 12.12.2024, of the learned CIT(E) in rejecting the application of the assessee filed in Form-10AB for registration u/sec.80G of the Income Tax Act, 1961 [in short “the Act”].
2 ITA.No.197/Hyd./2025 2. Briefly stated facts of the case are that, the appellant “Ikka Learning Foundation” is a Section-8 company registered under the Companies Act, 2013, incorporated on 19.01.2023. The main objects of the company is to organise accessible skill development programs for women and young graduates from rural and semi-urban areas of Andhra Pradesh and Telangana. The appellant filed an application seeking for regular registration u/sec.12AB(1) and for regular approval u/sec.80G(5) of the Income Tax Act, 1961 on 04.06.2024. The learned CIT(E) after verification of genuineness of the activities and documents submitted, passed his order on 16.12.2024 granting registration u/sec.12AB(1) of the Act. However, he had rejected the application filed by the appellant for registration u/sec.80G(5) of the Act on the ground that no substantial charitable activities are being carried-out by the appellant trust.
Being aggrieved by the order of the learned CIT(E), the assessee is now in appeal before the Tribunal.
3 ITA.No.197/Hyd./2025 4. CA A. Akhil Yadav-Learned Counsel for the Assessee, referring to the Memorandum of Association of the appellant-company and more particularly, it’s main objects submitted that, the appellant-trust is engaged in providing skill development programs for women and young graduates from rural and semi-urban areas of Andhra Pradesh and Telangana, for which, it has received CSR funds from various corporates. Further, the appellant-trust has spent the amount towards various programmes for development of skill for women and young graduates, for which, relevant evidences and also photographs have been furnished before the learned CIT(E). The learned CIT(E) without considering the details, simply rejected the application filed by the assessee. Therefore, he submitted that, the order of the learned CIT(E) should be set aside and registration should be granted to the assessee.
MS. M. Narmada, learned CIT-DR, on the other hand, supporting the order of the learned CIT(E) submitted that, although, the learned CIT(E) has not discussed the objects of appellant-trust, but, the fact remains that, the 4 ITA.No.197/Hyd./2025 assessee has furnished only part particulars and in absence of all the particulars/documentary evidences, the application filed by the appellant-trust could not be examined by the learned CIT(E). therefore, in order to verify the objects and activities, the matter may be remitted back to the file of learned CIT(E).
We have heard both the parties, perused the material on record and the orders of the authorities below. We find that, there is no dispute between the parties that the assessee is a trust and carrying-out skill development programmes for women and young graduates from rural and semi-urban areas of Andhra Pradesh and Telangana. The learned CIT(E) granted registration u/sec.12AB(1) of the Act vide order dated 16.12.2024 after considering the relevant documents furnished by the assessee, however, rejected the application filed by the assessee for registration u/sec.80G(5) of the Act. We find that, the assessee-trust is carrying-out skill development programmes for women and young graduates from rural and semi-urban areas of Andhra Pradesh and Telangana, for which, it has received 5 ITA.No.197/Hyd./2025 CSR funds various corporates. The assessee has also spent amounts towards various programmes for development of skill for women and young graduates and also filed relevant evidences and photographs before the learned CIT(E). Further, from the careful perusal of the order of the learned CIT(E), the learned CIT(E) did not give reasons for decision and simply rejected the application filed in Form-10AB for registration u/sec.80G of the Act by simply observing that “no substantial activities which are charitable in nature are being carried-out by the assessee-trust”. We find that the learned CIT(E) has passed a lackadaisical order, without considering the documentary evidences filed by the assessee-trust. In this connection, we may note that, although, the Government is taking steps for providing skill development for women and young graduates by conducting work-shops and seminars, but, as a matter of fact, the efforts taken-up by the Government is not at all enough/sufficient. Therefore, in our view, if any trust, like the assessee-trust before us, came forward to providing skill development for women and young graduates in rural and 6 ITA.No.197/Hyd./2025 semi-urban areas, such noble activities by Trust(s) established by some individuals/group of persons, shall be encouraged in true letter and spirit. Therefore, going by the objects of the appellant-trust and activities carried-out during the year, we are of the considered view that in principle the appellant trust is eligible for registration u/sec.80G of the Act. We, therefore, set aside the matter in issue back to the file of learned CIT(E) for limited purpose of verification and considering application filed by the assessee for registration u/sec.80G of the Act.
In the result, appeal of the assessee is allowed for statistical purposes.