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Facts
The assessee, a charitable trust, had existing approval under section 80G until AY 2021-22 and provisional approval from 04.04.2022 to AY 2024-25. The assessee applied for renewal under section 80G. The CIT rejected the application citing multiple deficiencies in the trust deed.
Held
The Tribunal held that while the CIT identified deficiencies, the assessee should have been given an opportunity to rectify them or provide clarifications. The matter is remanded to the CIT for re-examination.
Key Issues
Whether the rejection of the application for approval under section 80G without providing an opportunity for rectification was justified.
Sections Cited
80G, 12AA, 11(5), 13(1)(d), 11(4A), 2(15)
AI-generated summary — verify with the full judgment below
Before: SHRI INTURI RAMA RAO & SHRI SONJOY SARMA
Assessment Year: 2025-26 Monkombu Aundi Iyer Educational and Charitable Trust………………….………………………………………....…..….……….Appellant Viswanathapuram, Peerumedu, Murukady, Viswanathapuram SO, Kerala - 685535. [PAN:AABTM3938Q] vs. CIT (Exemption), Kochi………….…..….....................……........……...…..…..Respondent Appearances by: Shri Bijumon Antony, CA, appeared on behalf of the assessee. Smt. Veni Raj, CIT DR, appeared on behalf of the Revenue. Date of concluding the hearing: June10, 2025 Date of pronouncing the order: August 06, 2025 ORDER
Per Sonjoy Sarma, Judicial Member:
This appeal by the assessee is directed against the order of the Commissioner of Income Tax (Exemptions), Kochi, dated 26.09.2024, declining to grant approval under section 80G of the Income Tax Act, 1961.
Brief Facts of the case are that the assessee is a charitable trust duly registered under section 12AA of the Income-tax Act, 1961, and had been granted approval under section 80G up to the assessment year 2021–22. The assessee sought renewal of approval under section 80G from 01.04.2021 and accordingly filed an application. Provisional approval was granted in Form No. 10AC, effective from 04.04.2022 to A.Y. 2024–25. Before the expiry of the provisional approval (i.e., before 31.03.2024), the assessee filed an application for regular registration/ Monkombu Aundi Iyer Educational and Charitable Trust approval under section 80G in Form No. 10AB. However, the Commissioner of Income Tax (Exemptions), Kochi, vide order dated 26.09.2024, rejected the application and declined to grant approval under section 80G.The rejection was based on multiple deficiencies noted in the trust deed, including:
Absence of a clause stating that amendments to the trust deed will be carried out only with the prior approval of the CIT (Exemptions); Absence of a clause specifying that, upon dissolution, the assets of the trust shall be transferred to another trust with similar objectives and registered under section 12A; Lack of a clause ensuring that funds will be invested strictly in accordance with section 11(5) read with section 13(1)(d); No clause confirming that the trust’s activities shall be carried out only in India; No clause ensuring that the income of the trust shall be utilized only for charitable objects and not for the benefit of any trustee or related person; No clause that the benefits of the trust are available to all sections of society irrespective of caste, religion, or gender; No clause to the effect that, if the trust undertakes any business activity, it shall comply strictly with the conditions laid down under section 11(4A) read with proviso to section 2(15).
Aggrieved by the above order assessee is in appeal before this tribunal at the time of hearing ld. AR stated that the impugned order is bad in law and liable to be set aside.
On the other hand Ld. DR supported the order of authority below.
Monkombu Aundi Iyer Educational and Charitable Trust 5. We after hearing both parties and perusing the material available on record, we are of the considered view that although the CIT(Exemptions) pointed out several deficiencies in the trust deed, the assessee ought to have been given a proper opportunity to rectify the same or present clarifications. In the interest of justice and fair play, we deem it appropriate to remand the matter back to the file of the CIT(Exemptions), Kochi with a direction to re-examine the matter afresh after affording due opportunity of being heard to the assessee and permitting rectification, if permissible under the law.
In the result, the appeal of the assessee is allowed for statistical purposes.
The 6th August, 2025.