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Facts
The assessee, Kosuke Sports Foundation, applied for registration under Section 12AB and Section 80G of the Income Tax Act. The Commissioner of Income Tax (Exemption) rejected the application, citing failure to furnish tentative financial statements, details of coaches, and evidence of expenses, and also cancelled the provisional registration.
Held
The Tribunal held that the Commissioner had not applied his mind to the facts submitted by the assessee and that the reasons for rejection were not sufficient. The Tribunal found that the assessee's objects were charitable, its activities were genuine and in line with its objects, and it had complied with the relevant provisions of the Act.
Key Issues
Whether the Commissioner was justified in rejecting the assessee's application for registration under Section 12AB and 80G based on the provided reasons, and whether the assessee's activities and objects were genuine and charitable.
Sections Cited
12AB, 80G, 12A, 2(15)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “A” :: PUNE
Before: DR.DIPAK P. RIPOTE & SHRI VINAY BHAMORE
appeals were heard together and are being disposed of by this common order.
Findings & Analysis : 2. We have heard both the parties and perused the records. In this case Kosuke Sports Foundation (assessee) is a Company registered under section 8 of the Company Act incorporated on 29/06/2024 having CIN: U88900PN2024NPL232314. It has received Provisional Registration u/s 12A of the Income Tax Act on 25/10/2024 and it is valid till AY 2027-28.
It had filed an application in Form Number 10AB to obtain Registration u/s 12A(1)(ac) of the Income Tax Act on 21/12/2024. The Commissioner of Income Tax(exemption) Pune rejected the Application of the Assessee and also cancelled the Provisional Registration dated 25/10/2024 vide his order dated 17/04/2025.
4 The relevant paragraphs of the Order passed by Commissioner of Income Tax (exemption) are reproduced here as under :
It can be observed from the above that Commissioner of Income Tax (exemption) rejected the application of the assessee for following reasons :
- Failure of assessee to furnish tentative Financial Statement for FY 2024-25. - Failure to furnish details of coaches and their qualification who rendered services . - Bills, vouchers for expenses not provided. 4 Thus, these are the three reasons based on which the Commissioner of Income Tax (exemption) concluded that Commissioner of Income Tax (exemption) is unable to draw any satisfactory conclusion about Genuineness of activities and compliance of any other law , hence Commissioner of Income Tax (exemption) rejected the Application of the Assessee.
5.1 In these factual background lets understand the Section 12A and 12AB of the Income Tax Act. The relevant provisions are reproduced here under :
“12A. (1) The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely:— (a)… (ab)……. (ac) notwithstanding anything contained in clauses (a) to (ab), the person in receipt of the income has made an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for registration of the trust or institution,— (i)……….. (ii)……….. (iii) where the trust or institution has been provisionally registered under section 12AB, at least six months prior to expiry of period of the provisional registration or within six months of commencement of its activities, whichever is earlier; Procedure for fresh registration. 12AB. (1) The Principal Commissioner or Commissioner, on receipt of an application made under clause (ac) of sub-section (1) of section 12A, shall,— (a) where the application is made under sub-clause (i) of the said clause, pass an order in writing registering the trust or institution for a period of five years; (b) (b) where the application is made under sub-clause (ii) or sub- clause (iii) or sub-clause (iv) or sub-clause (v) 66[or item (B) of sub- clause (vi)] of the said clause,— 5
(c) (i) call for such documents or information from the trust or institution or make such inquiries as he thinks necessary in order to satisfy himself about— (A) the genuineness of activities of the trust or institution; and (B) the compliance of such requirements of any other law for the time being in force by the trust or institution as are material for the purpose of achieving its objects; (ii) after satisfying himself about the objects of the trust or institution and the genuineness of its activities under item (A) and compliance of the requirements under item (B), of sub-clause (i),— (A) pass an order in writing registering the trust or institution for a period of five years; or [(B) if he is not so satisfied, pass an order in writing,— (I) in a case referred to in sub-clause (ii) or sub-clause (iii) or sub-clause (v) of clause (ac) of sub-section (1) of section 12A rejecting such application and also cancelling its registration; (II) in a case referred to in sub-clause (iv) or in item (B) of sub-clause (vi) of sub-section (1) of section 12A, rejecting such application, (d) after affording a reasonable opportunity of being heard;] (e) [(c) where the application is made under item (A) of sub-clause (vi) of the said clause or to the application is made under sub-clause (vi) of the said clause, as it stood immediately before its amendment vide the Finance Act, 2023, pass an order in writing provisionally registering the trust or institution for a period of three years from the assessment year from which the registration is sought,] and send a copy of such order to the trust or institution………
Thus to get benefit of provisions u/s. 11 of the Act the Trust or Institute must have a valid registration u/s.12A of the Act. The procedure for registration is provided in Section 12AB of the Act.
In this case the Assessee has commenced its activities on 19/07/2024. The assessee applied for Registration within six months of commencement of activities as per the provisions of the Act. This fact has not been doubted by the Commissioner of Income Tax (exemption). 6
As per the Section 12AB of the Act, the Commissioner of Income Tax (exemption) has to verify Objects of the trust, whether they are charitable or not as defined in section 2(15) of the Act, and Genuineness of Activities and whether the activities are as per the Objects or not. One more aspect the Commissioner of Income Tax (exemption) has to verify is whether there is any violation of applicable Act. These are the specific aspects the Commissioner of Income Tax (exemption) has to verify and satisfy himself.
Now lets understand the objects of the Assessee Kosuke Sports Foundation, its objects are as under :
-to promote , nurture the sport of ‘Fencing’ while fostering overall physical development of Youths. - Spread awareness of sport of ‘Fencing’ -Providing right infrastructure, coaching, training of ‘Fencing’. -raising funds for sports equipments -organising and national and international tournaments 9.1 These are some of the objects of the Assessee. These Objects are charitable in nature as per the section 2(15) of the Act.Fencing is a combat sport that features sword fighting. Fencing is a Olympic sports since 1986.
Now, lets understand the activities undertaken by the Assessee within a short period since its incorporation. As per the note submitted by the Assessee, it had organised training camps in Government schools in Pune with the Approval of Municipal Corporation sports department. Assessee submitted copy of the permission granted by Pune Municipal corporation which in the 7 paper book.Assessee has started training these students free of cost. Assessee also submitted Photographs of these camps. The Assessee adopted 5 kids from these Municipal Schools to train them properly in the sport of Fencing. One student named Piyush trained by assessee participated in ECFA Fencing Championship and won Gold. The Assessee submitted photographs too.
10.1 All these documents discussed above have been filed by the assessee before the Commissioner of Income Tax (exemption). Assessee filed copy of E-acknowledgement as proof of submission of these documents before the Commissioner of Income Tax (exemption). The Ld.DR has not doubted it.
When we have studied the note on activities with its photographs, we are convinced that the activities carried out are as per the Objects.
12. We have already reproduced relevant paragraphs of the Order of the Commissioner of Income Tax (exemption). The Commissioner had called for tentative Financials, however, since the activities were just started in July 2024 and assessee applied in December 2024, the assessee had not prepared its Financials as it had not completed the Financial year. The Commissioner of Income Tax (exemption) has not explained why he wanted to study Financials for such a short period and how it would have helped him in understanding Genuineness of activities. We have already listed the activities which are genuine and as per the objects. Therefore, in 8 our opinion in the facts of this case the Financials of such a short period was not essential to decide Genuineness of Activities and Charitableness of objects and activities.
The Commissioner of Income Tax (exemption) had asked for complete details of Coaches and their qualifications. Again this question is irrelevant in the case of the Assessee as one of the Director of the Assessee Mrs. Shweta Avad is an expert in Fencing and she has received various awards for the same. Mrs.Shweta Avad had represented India in World Fencing Championship held in Germany and won Bronz medal. She has also been awarded the prestigious Chhatrapati award. All these facts were provided to the Commissioner of Income Tax (exemption) by the assessee.
Non furnishing of bills and vouchers was not essential in the facts of this case as the assessee had proved beyond doubt the nature of activities carried out in short period.
We have also observed from the Order of the Commissioner of Income Tax (exemption) that he has not applied his mind at all to the facts submitted by the assessee and the facts mentioned by the assessee in the application.
We have already reproduced the Objects of the assessee, activities carried out by the assessee. In the facts and circumstances of the case we are convinced that Objects of the Assessee are Charitable as defined u/s 2(15) of the Act, the Activities carried out are as per the Objects, the Genuineness of the Activities have been established by the assessee. The Commissioner of Income Tax 9 (exemption) has not mentioned any violation of any Law by the assessee. Therefore, in the facts and circumstances of the case, we are convinced that Assessee is eligible for Registration u/s 12AB rws12A of the Act.
We find support from the Order of ITAT Benglore Bench in the case of Marine Drishti and Coastal Foundation vs CIT(E) [2025] 177 taxmann.com 433 (Bangalore - Trib.) where in ITAT held as under :
Quote, “11.3 Therefore, we find force in the argument of ld. Counsel of the assessee that it is not a case that no activities had been commenced but in fact a little amount spent towards the objects as the trust is at the inception stage. We are of the firm opinion that for the purpose of granting registration, the ld. CIT(E) shall call for such documents or information or make such inquiry as he thinks necessary in order to satisfy himself about the twin object:- (a) the genuineness of the activity of the trust and (b) the compliance of such requirements of any other law for the time being in force by the trust or institution as are material for the purpose of achieving its object. 11.4 In the present case, there is not even a whisper about any non-genuineness of the activities carried on by the assessee trust. The only allegation by the ld. CIT(E) is that the assessee had not commenced its activities towards the object of the Trust which in our opinion is not true by taking into consideration the Activity report, photographs & financials along with provisional produced before us. We are also of the considered opinion that it is not the quantum of expenditure which is relevant for the purpose of granting registration but in fact the genuineness of the activity of the trust in accordance with the object of the trust is relevant for granting registration. In the present case, it is a fact that the assessee had already commenced its activity towards the attainment of the object as the assessee trust had conducted the training programme which comes under the framework of the Annual Lifesaver Revalidation Programme in the presence of Deputy conservator of Forests. Since it was the inception stage of its operation, the assessee was not able to spend towards the large scale activity. Therefore, considering the totality of the fact of the case, as the assessee had already commenced its activities which is also not held to be non-genuine by the ld. CIT(E), we are inclined to allow the appeal filed by the assessee& direct the ld. CIT(E) to grant registration u/s 12AB of the Act. It is ordered accordingly. 10
In the result, appeal” Unquote. 17.1 Accordingly ,we direct the Commissioner of Income Tax (exemption) to Grant the Registration u/s 12AB rws 12A of the Act to the Assessee.
In the result the Appeal of the Assessee in ITA 1195/PUN/2025 is allowed.
ITA 1194/PUN/2025: 19. The Commissioner of Income Tax(exemption) has rejected the Application of the assessee for registration u/s 80G only on one Ground that the Assessee’s application for Registration u/s 12AB r.w.s 12A has been rejected.
We in ITA 1195/PUN/2025 has directed the Commissioner of Income Tax(exemption) to grant Registration u/s 12AB r.w.s 12A to the Assessee. Hence, the assessee is also eligible for Registration u/s 80G of the Act as CIT has rejected it only for non availability of 12A . Accordingly the Commissioner of Income Tax(exemption) is directed to grant registration u/s 80G to the assessee.
In the result appeal of the Assessee in ITA 1194/PUN/2025 is allowed.
Order pronounced in the open Court on 29th August, 2025.