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Facts
The assessee applied for registration under Section 80G of the Income-Tax Act, 1961. The Ld. CIT(E) rejected the application, citing that the trust's objectives were not charitable as per Section 2(15) and that no substantial charitable activities were carried out, without a detailed speaking order.
Held
The Tribunal found that the Ld. CIT(E)'s rejection order lacked a proper discussion on why the trust's objectives were deemed non-charitable or the utility of funds. Consequently, the Tribunal set aside the rejection order and remitted the matter back to the Ld. CIT(E) for a fresh examination and to pass a speaking order.
Key Issues
The key issue was the justification for rejecting the Section 80G registration application, particularly the lack of a reasoned speaking order from the Ld. CIT(E) regarding the charitable nature of the trust's objectives and activities.
Sections Cited
80G, 80G(5)(i), 2(15)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, VISAKHAPATNAM “SMC” BENCH, VISAKHAPATNAM
Before: SHRI LALIET KUMAR, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
आदेश /O R D E R
PER SHRI LALIET KUMAR, JUDICIAL MEMBER:
This appeal is filed by the assessee against the rejection order by the Learned Commissioner of Income Tax (Exemption), Hyderabad [hereinafter in short “Ld.CIT(E)” vide DIN & Notice No. ITBA/EXM/F/EXM45/2024- 25/1069261945(1) dated 30.09.2024.
I.T.A.No.464/VIZ/2024 Intention Attention Manifestation Foundation 2. Briefly stated facts of the case are, assessee has fled an e-application in Form No. 10AB seeking registration under section 80G of the Income-Tax act, 1961 (in short “Act”). On 27.04.2024 Ld.CIT(E) issued Notice to the assessee in respect of proceedings under section 80G(5)(i) of the Act, to produce the copy of Memorandum of Association/Trust deed for verification and to furnish a detailed reply on the specific information called for in the said notice. In response, assessee has submitted some of the details as called for. Subsequently, another notice dated 22.05.2024 was issued to the assessee to submit the full information as per the notices issued. In response, assessee furnished its reply in compliance to the notice issued by the Ld.CIT(E). On considering the submissions of the assessee, Ld. CIT(A) rejected the application and issued Form No.10AD dated 30.09.2024.
Aggrieved by the rejection order assessee filed an appeal before us by raising following grounds of appeal: -
“1. The order of the learned Commissioner of Income Tax (Exemption), Hyderabad is contrary to the facts and also the law applicable to the facts of the case. 2. The learned Commissioner of Income Tax (Exemption) is not justified in rejecting the application filed by appellant in Form no.10AB for Registration u/s 80G(5) of the Act. 3. Any other ground that may be urged at the time of appeal hearing.”
The only issue contested by the assessee is rejection of the Registration by the Ld.CIT(E). On this issue, Ld. Authorised Representative [hereinafter
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I.T.A.No.464/VIZ/2024 Intention Attention Manifestation Foundation “Ld.AR”] submitted that assessee has filed Form No. 10AB seeking registration under section 80G of the Act and the same was rejected by the Ld.CIT(E) without any speaking order. Ld.AR pleaded that the rejection order may be set-aside and the matter be remit back to Ld.CIT(E) for deciding afresh.
Per contra, Ld. Departmental Representative [hereinafter in short “Ld.DR”] relied on the order of the Ld.CIT(E).
We have heard both the sides and perused the material available on record. We observe that Ld.CIT(E) rejected the application of the assessee by observing as under:
“3. On perusal of the submission made by the assessee, it is noticed that the objectives of the trust does not fall under the charitable nature which violates the provisions of section 2(15) of Income tax act 1961, and there are no substantial activities which are charitable in nature have been carried out by the trust. In light of the above facts, the present application in form 10AB for registration u/s 80G is herewith rejected.”
On perusal of the order of the Ld.CIT(E), we find that the Ld.CIT(E) has not discussed anything except stating that the objectives of the trust does not fall under the charitable nature and rejected the application. We find that the Ld.CIT(E) has not discussed the case how the objective of the assessee are not charitable in nature. Further, Ld.CIT(E) has not discussed about the utility of the funds during the assessment years. Therefore, keeping in view all the facts discussed above, we hereby set- aside the order of the Ld.CIT(E) on this issue and remit the matter back to the Page No. 3
I.T.A.No.464/VIZ/2024 Intention Attention Manifestation Foundation file of the Ld.CIT(E) to examine the issue afresh after considering the submissions by the assessee. We also hereby direct the assessee to furnish all the details before Ld.CIT(E) and cooperate promptly with the proceedings of Ld.CIT(E) deciding the issue afresh. We reiterate that on furnishing the details by the assessee, the Ld.CIT(E) should verify and examine them in accordance with law and pass a speaking order. It is ordered accordingly.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 22nd January, 2025.