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Facts
The assessee, Bhartiya Shiksha Prachar Samiti, sought registration under Section 80G(5)(iii) of the Income Tax Act. The CIT(E) rejected the application citing non-registration under the Rajasthan Public Trust Act, 1959, and also cancelled its earlier provisional approval. The assessee later obtained the required registration under the Rajasthan Public Trust Act.
Held
The Tribunal noted that the assessee has now obtained the registration under the Rajasthan Public Trust Act, 1959. It felt that the matter needed re-examination by the CIT(E) and restored the case to the CIT(E) for fresh adjudication, providing one more opportunity of hearing.
Key Issues
Whether rejection of registration under Section 80G solely on the ground of non-registration under the State Public Trust Act is sustainable when the registration is subsequently obtained. Whether the CIT(E) erred in cancelling the provisional approval.
Sections Cited
80G, 80G(5)(iii), 12AB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES,”A” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 367/JPR/2025
fu/kZkj.k o"kZ@Assessment Year : 2024-25 Bhartiya Shiksha Prachar Samiti, Tonk cuke The CIT (Exemption) Vs. Jaipur Jaideep Jain Barjatya Mension, Subhash Bazar, Tonk – 404 001 (Raj) LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAAAB 7653 D vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby : Shri Devang Gargieya, CA jktLo dh vksjls@Revenue by: Shri Rajesh Ojha, CIT-DR & Smt. Anita Rinesh, JCIT-DR lquokbZ dh rkjh[k@Date of Hearing : 23/04/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 19 /05/2025 vkns'k@ORDER PER: DR. S. SEETHALAKSHMI, J.M. This appeal filed by the assessee is directed against order of the ld. CIT(E), Jaipur dated 28-12-2024 raising therein following grounds of appeal. ‘’1. The impugned order dated 28-12-2024 of the Act is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence, the same kindly be quashed.
2. The ld. CIT(E) erred in law as well as on the facts of the case in cancelling / refusing the registration u/s 80G(5)(iii) of the Act. The cancellation/ refusal of the registration by the ld CIT(E) is bad in law and on facts of the case and hence the same may kindly be quashed.
3. The appellant prays your honour to add, amend or alter any of the grounds of appeal on or before the date of hearing.
2.1 The Bench during the course of hearing noted that the Ground No. 1 and 3 of the assessee are general in nature which does not require any adjudication. 3.1 As regards the solitary ground No. 2 of appeal of the assessee, the Bench noted that the ld.CIT(E) rejected application of the assessee trust u/s 80G of the Act by observing as under:- ‘’2.6…. Hence, the case is decided as per reply/document filed by the applicant. It is clear that society is not registered under Rajasthan Public Trust Act, 1959. Therefore. in light of above discussion and in the absence of registration under Rajasthan Public Trust Act, 1959, assessee is not eligible for approval u/s 80G.
In view of the above, it is held that the assessee has no registration under RPT Act, 1959. In view of above discussion assessee's claim of approval u/s 80G is liable to be rejected and thus being rejected on following grounds -
Registration under Rajasthan Public Trust Act, 1959.
04. Further 2nd proviso to 80G(5) also state that if CIT is not satisfied has to pass order rejecting such application BHARTIYA SHIKSHA PRACHAR SAMITI TONK VS CIT (E), JAIPUR and also cancelling its earlier approval. Thus, it is clarified that applicant provisional approval under clause (iv) of first proviso to sub-section (5) of section 80G of the Income Tax Act. 1961 dated 24.09.2021 is also being cancelled. Further assessee has failed to give proper justification for regularization of provisional approval, thus with this order provisional approval is also lapsed and cancelled. ‘’ 3.2 During the course of hearing, the ld.AR of the assessee filed the following written submission with the prayer to grant the registration u/s 80G(5)(iii) of the Act. ‘’Submissions 1.1 Rejection solely based on non-registration under the Rajasthan. Public Trust Act, 1959 It is respectfully submitted that the rejection of the application u/s 80G(5)(iii) is based only on a technical ground of non-registration under the Rajasthan Public Trust Act, 1959, which now stands fully complied with. The appellant has since obtained registration under the Rajasthan Public Trust Act, 1959, vide certificate dated 06.03.2025 (PB 1) issued by the competent authority. Once the very basis for rejection is no longer in existence, the impugned rejection cannot be sustained in the eyes of law 1.2 Conditions prescribed u/s 80G(5) otherwise fully satisfied The appellant submits that the charitable objects and activities are duly supported by documents on record and have not been doubted or disputed by the CIT(E) There is no adverse finding regarding the genuineness of the activities or the fulfillment of any other requirement under section 80G(5) of BHARTIYA SHIKSHA PRACHAR SAMITI TONK VS CIT (E), JAIPUR the Act. It is a settled legal position that approval u/s 80G is to be granted when the conditions prescribed in the said provision are satisfied, which in the present case, are squarely met by the appellant. 1.3 Registration under State Public Trust Act not a statutory precondition under section 80G of the Act It is submitted that registration under any State Public Trust Act, including the Rajasthan Public Trust Act, 1959, is not a mandatory precondition under section 80G of the Income Tax Act. Even under section 12AB[1][b]((B) of the Act, the reference to compliance with other laws pertains to such compliance that is material for achieving the objects of the trust. The appellants compliance with the Rajasthan Societies Act was already complete at the time of application, and registration under the Public Trust Act, while now obtained, is not shown to be essential for the functioning or fulfillment of the trust's charitable objectives. Therefore, the rejection solely on this ground is unjustified. 1.4 ITAT Jaipur has already held that such rejection is not tenable Reliance is placed on the judgment of the Hon'ble ITAT, Jaipur Bench in the case of APJ Abdul Kalam Education and Welfare Trust vs. CIT (E), Jaipur in dated 06.01.2025, wherein it has been held that non-registration under the Rajasthan Public Trust Act cannot be the sole ground for denial of registration or approval, especially when the trust is otherwise compliant with the objects and purposes of law. It was further held that where no prohibition exists in the respective Trust Act for carrying out charitable activities in the absence of registration, such procedural omission cannot form the basis for denial of benefits under the Income Tax Act. In view of the above, the impugned order dated 28.12.2024 deserves to be quashed and the appellant's application for approval u/s 80G(5)(iii) of the Act may kindly be allowed.’’ BHARTIYA SHIKSHA PRACHAR SAMITI TONK VS CIT (E), JAIPUR Further, the ld.AR of the assessee has filed the copy of Registration Certificate under Rajasthan Public Trust Act, 1959 dated 06-03-2025 (PB page 1) and also copy of Registration Certificate u/s 12A dated 24-09-2021 (PB Pages 2 to 4). 3.3 On the other hand, the ld. DR supported the order of the ld. CIT(E) 3.4 We have heard both the parties and perused the materials available on record. In this case, it is noted that the ld. CIT(E) rejected approval u/s 80G of the Act for the reason that the assessee samiti was not Registered under Rajasthan Public Trust Act, 1959. Now the assessee has filed the copy of registration of the Samiti under Rajasthan Public Trust Act, 1959. Hence, in this view of the matter, the Bench in the interest of equity and justice feel that the matter needs re- examination by the ld. CIT(E). Accordingly, the matter is restored to the file of the ld.CIT(E) to consider the above submissions of the assessee and allow the appeal of the assessee in accordance with law. The assessee is also directed to submit the necessary document before the ld. CIT(E) to settle the lis and the matter is restored to the file of the ld. CIT(E) to decide it afresh by providing one more opportunity of hearing. However, the assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings. Thus the appeal of the assessee is allowed for statistical purposes. 3.5 Before parting, we may make it clear that our decision to restore the matter back to the file of the ld. CIT(E) shall in no way be construed as having any BHARTIYA SHIKSHA PRACHAR SAMITI TONK VS CIT (E), JAIPUR reflection or expression on the merits of the dispute, which shall be adjudicated by ld. CIT(E) independently in accordance with law. 4.0 In the result, the appeal of the assesee is allowed for statistical purposes Order pronounced in the open court on 19 /05/2025.