HARE KRISHNA MOVEMENT KOTA,KOTA vs. CIT EXEMPTION, JAIPUR

3. On the facts and circumstances of the case and in law, Id. CIT(Exemption) has further erred in cancelling the provisional approval under section 80G of the Income Tax Act, 1961. Such cancellation being arbitrary in nature as well as bad in law hence deserves to be deleted.

2.1 Apropos to the ground so raised by the assessee in the ld. CIT(E) rejected the assessee’s claim of registration u/s 12AB of the Act by observing as under:- ‘’(Page 6) – Hence from the above it is clear that the activities are not verifiable and it could not be determined whether the applicant is genuinely carrying out charitable activity and it's cannot be ascertained that activities are as per objects. Therefore, the applicant claim of registration u/s 12AB is also liable to be rejected on ground of not proving its genuineness of activities 03. Business Objects: 3.1 On perusal of document submitted by the applicant it is found from objects of applicant trust that following objects mentioned in the MOA/Deed are related to activities of commercial/business nature- "5 (1) "deal in religious paraphernalia like incense, picture, bhahan, CDs children books (g) To enter into any venture on its own or as a joint venture in the form or mode with any person, firm, company, society or trust or anyone to promote any of the objects or purely as incidental or supportive to the objects.

Urban Development Authonty in Civil appeal no. 21762 of 2017 dated 19.10.2022 has opined the following ‘’A.1 It is clarified that an assessee advancing general public utility cannot engage itself in any trade, commerce or business, or provide service in relation thereto for any consideration ("cess, or fee, or any other consideration)’’ Therefore, it is clear that, the activities mentioned in the impugned objects are business activities as discussed in 2.1 above, these objects cannot be held as charitable within the meaning of section 2(15) of the Income Tax Act, 1961 and hence, the application of the applicant for registration u/s 12A is liable to be rejected In view of the above, the present application filed in Form No. 10AB is liable to be rejected 04. In view of above discussion applicant's application for registration u/s 12AB is liable to be rejected and thus being rejected on following grounds: -

 Genuineness of Activities.  Business Objects

5. Further 12AB (1)(b)(ii)(B) of the Income Tax Act, 1961 also state that if CIT is not satisfiedhas to pass order rejecting such applicationand also cancelling its earlier registration. Thus, it is clarified that applicant's provisional registration under clause (vi) of clause (ac) of sub-section (1) of section 12A of the Income Tax Act, 1961 dated 10.12.2022 is also being cancelled. Further assessee has failed to give proper justification for regularization of provisional registration, thus with this order provisional registration is also cancelled.’’ 2.2 Apropos to the ground so raised by the assessee in the ld. CIT(E) rejected the assessee’s claim of exemption u/s 80G of the Act by observing as under:- ‘’The reply of the assessee is considered on record but no found tenable. The assessee claimed various exp. like Administration and other expenses, Folk niwasexp., Ashram and volunteer Exp. etc which are more than 81% of the total receipt. Thus, it is clear that the applicant is actually a religious trust. In view of the above discussion, it is clear that applicant is making expenditure of religious nature and violating section 80G(5B) of the Act. Therefore, the assessee is not eligible for approval u/s 80G. 04 In view of abovediscussion assessee's claim of approval under section 80G(5) is liable to be rejected and thus being rejected on following grounds:

 Approval u/s 80G cannot be granted without registration u/s 12AB  Religious Trust are not eligible u/s 80G(5)(ii)  Expenditure incurred for religious purposes 80G(5B)

5. Further 2nd proviso to 80G(5) also state that if CIT is not satisfiedhas to pass order rejecting such application 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 10.12.2022 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.’’ 2.3 During the course of hearing, the ld. AR of the assessee in both the appeals mainly submitted that the assessee was not provided with an adequate opportunity of being heard by the ld. CIT(E) and thus both the orders should be quashed being against the principles of natural justice, as only two notices were issued. Further, it is submitted by the ld. AR of the assessee he has submitted all the required documents as desired by the ld. CIT(E) but the ld. CIT(E) without dealing with material placed on record decided that the assessee is enaged in the business activities and in fact it is not so based on the decision of Ahemedaand Urban Development Authority (AUDA) as decided by the apex court. The ld.ARof the assessee also submitted that the assessee trust is a charitable Sanstha and not religious and this should be re-examined based on the broad concept. Conclusively, he prayed that he should be given one more chance to contest the case before the ld. CIT(E) to resolve the issue and also to apprise him about the documents already produced by the Trust for registration u/s 12AB of the Act.

2.4. Per contra, the ld. DR relied on the order of the ld. CIT(E). 2.5 After hearing both parties and perusing the materials available on record, we noticed that an application for registration u/s 12AB of the Act was rejected by the ld CIT(E) on following grounds/ * Genuineness of activities * Business objects In the course of hearing of the case, it is requested by the ld.AR of the assessee that he had complied with the instructions of the ld. CIT(E) and supplied all the documents demanded by the ld. CIT(E) but it appears that the same has not been properly examined by the ld CIT(E) and the assessee was given only two notices. He submitted that from the records it can be seen the genuineness of the activities of the trust and alsoits objects. He prayed that one more chance should be given to the assessee trust to re-submit or argue the case before the ld. CIT(E) so that he will be in a position reappraise the case to the ld. CIT(A). The Bench adopts the lenient view and feels that the assessee should be given one more opportunity to advance the documents before the ld. CIT(E) as to registration of the trust u/s 12AB of the Act. Hence, in view of all the facts and circumstances of the case, the matter is restored to the file of the ld CIT(E) for afresh adjudication by providing adequate opportunity of being heard and the assessee is also required to submit the documents as demanded by the ld. CIT(E) with regard to registration of the Trust u/s 12AB of the Act. Thus, this appeal of the assessee is allowed for statistical purposes. 2.6 Since we have restored the appeal of the assessee with regard to the registration u/s 12AB of the Act to the file of the ld. CIT(E) for afresh adjudication, therefore, the outcome of appeal of the assessee u/s 80G of the Act is consequential in nature and is also restored to the file of the ld. CIT(E). 3.0 In the result, the appeals of the assessee are allowed for statistical purposes Order pronounced in the open court on 06/05/2025. Sd/- Sd/- ¼Mk0 ,l- lhrky{eh ½ ¼jkBksMdeys'kt;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;dlnL;@Judicial Member ys[kklnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 06/ 05/2025 *Mishra आदेश की प्रतिलिपिअग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Hare Krishna Movement, Kota 2. izR;FkhZ@The Respondent- The CIT (E). 3. vk;djvk;qDr@CIT 4. विभागीय प्रतिनिधि] आयकरअपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 5. xkMZQkbZy@Guard File {ITA No. 211 & 210/JPR/2025} vkns'kkuqlkj@By order

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