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Facts
Nayanta Education Foundation, a company registered under Section 8 of the Companies Act, 2013 and Section 12AB of the Income Tax Act, applied for registration under Section 80G. The Commissioner of Income Tax (Exemption) rejected the application, citing failure to submit relevant information and lack of substantial charitable activities. The appellant, engaged in establishing universities, contended it had furnished all details and its primary object of education is inherently charitable, especially being in the initial stages of operations.
Held
The Tribunal found the CIT(E)'s observation regarding lack of substantial charitable activity incorrect, considering the appellant's educational objects and its nascent stage of establishing universities. It noted the appellant's claim of submitting all necessary documents. The Tribunal set aside the CIT(E)'s order and remitted the matter back for reconsideration, directing the CIT(E) to re-examine the case based on the trust's objects and any additional evidence.
Key Issues
Whether the CIT(E) was justified in rejecting the application for Section 80G registration on grounds of failure to submit information and lack of substantial charitable activities, for an educational institution in its initial stages of establishing universities.
Sections Cited
80G, 8, 12AB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, HYDERABAD “A” BENCH: HYDERABAD
Before: SHRI VIJAY PAL RAO & SHRI MANJUNATHA G
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “A” BENCH: HYDERABAD BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MANJUNATHA G, ACCOUNTANT MEMBER ITA.No.165/Hyd/2025 [u/sec.80G of the Income Tax Act, 1961] Nayanta Education The Commissioner of Foundation, vs. Income Tax (Exemption), Secunderabad – 500 016. Hyderabad – 500 029. PAN AAICN5427D Telangana. (Appellant) (Respondent) For Assessee : Shri Anil Kumar, Advocate For Revenue : MS. U. Mini Chandran, CIT-DR Date of Hearing : 24.04.2025 Date of Pronouncement : 24.04.2025 ORDER PER MANJUNATHA G. :
This appeal has been filed by the Assessee against the order dated 24.12.2024, of the learned Commissioner of Income Tax (Exemption), Hyderabad in rejecting the application of assessee in Form-10AB for registration u/sec.80G of the Income Tax Act, 1961 [in short “the Act”].
2 ITA.No.165/Hyd./2025 2. Briefly stated facts of the case are that, the appellant is company registered u/sec.8 of the Companies Act, 2013 and is a non-profit company. The appellant- company is engaged in activity of imparting education by establishing universities. The appellant-company has also filed relevant applications before the Authorities for seeking permission to establish universities and the application filed by the appellant-company before the Government of Maharashtra has been accepted and permission has been granted for establishment of university. Further, the appellant-company has filed an application for establishment of university before the Government of Telangana, which is pending for consideration. The appellant-company is registered u/sec.12AB of the Act vide order of registration for approval in Form-10AD dated 31.12.2024. The appellant-company has filed an application in Form-10AB seeking for registration u/sec.80G of the Act. The learned CIT(E) rejected the application filed by the appellant-company on the ground that appellant-company failed to submit relevant information called for during the 3 ITA.No.165/Hyd./2025 course of proceedings to explain it’s case. The learned CIT(E) further observed that the appellant-company is not carried- out substantial charitable activities which is in violation of provisions of sec.80G of the Act.
Aggrieved by the order of the learned CIT(E), the appellant-company is now in appeal before the Tribunal.
Shri Anil Kumar, Advocate-Learned Counsel for the Assessee submitted that, the learned CIT(E) was erred in rejecting the application filed by the appellant-company in Form-10AB seeking registration u/sec.80G of the Act, even though the appellant-company is registered u/sec.12AB of the Act as a charitable-trust or institution for imparting education. Therefore, he submitted that, the matter may be remitted back to the file of learned CIT(E) to consider the case of the appellant-company, after providing an opportunity to explain the case with relevant evidences.
MS. U. Mini Chandran, CIT-DR fairly agreed that the matter may be remitted back to the file of learned CIT(E)
4 ITA.No.165/Hyd./2025 to give another opportunity to the appellant-company to explain it’s case.
We have heard both the parties, perused the material on record and the orders of the authorities below. Admittedly, the appellant-company is a registered company u/sec.8 of the Companies Act, 2013 as a non-profit company. As per the main objects of the appellant- company, it is engaged in imparting education by setting-up colleges and universities for other similar activities. Since the appellant-company is in the initial stage of establishing universities and the main object of the appellant-company is imparting education, which itself, is a charitable activity, in our considered view, the observation of learned CIT(E) while rejecting the application filed by the appellant-company for registration u/sec.80G of the Act that no substantial charitable activity is carried-out is incorrect. We find that the appellant-company is in the initial stage of establishing universities by securing relevant permission from the concerned State Government’s, therefore, at this stage, the learned CIT(A) needs to look into the objects of the trust
5 ITA.No.165/Hyd./2025 instead of activities carried-out by the trust for recognition u/sec.80G of the Act. Since the appellant-company is a new trust which is in the process of establishing universities, in our considered view, the application filed by the assessee in Form-10AB for registration u/sec.80G of the Act ought to have been considered by the learned CIT(E) in light of objects of the appellant-company’s trust and the registration provided u/sec.12AB of the Income Tax Act, 1961. Further, the learned CIT(E) rejected the application filed by the assessee on the ground that the appellant-company failed to submit relevant details called for including the cash-flow statement /bank statement, copy of latest three months GST returns, list of donors in respect of sec.80G claim etc. It was the case of the appellant-company that, it has furnished all the relevant details before the learned CIT(E), however, the learned CIT(E) is failed to consider the details filed by the appellant-company. Since the learned CIT(E) rejected the application filed by the assessee in a casual manner without considering the details filed by the appellant-company and also on the ground that no 6 ITA.No.165/Hyd./2025 substantial charitable activities are being carried-out by the appellant-company’s trust, in our considered view, the matter needs to be set-aside to the file of learned CIT(E) for reconsideration of the issue. Thus, we set-aside the order of the learned CIT(E) and restore the issue to the file of learned CIT(E) for reconsideration. We direct the learned CIT(E) to re-examine the case of the appellant-company’s trust in light of any evidences filed by the appellant-company’s trust to justify it’s case. Accordingly the grounds of appeal of the appellant-company is allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.