INITIATIVE FOR MORAL AND CULTURAL TRAINING FOUNDATION TELANGANA,HYDERABAD vs. CIT (EXEMPTION), HYDERABAD

The rejection of application by the Learned commissioner of Income Tax (Exemptions) Hyderabad of the application under Section B0G(5) of the Income Tax Act is erroneous, unjustified, and contrary to the facts and the law' 3. The order passed by the Learned commissioner of Income Tax (Exemptions), Hyderabad, rejecting the application for Page 2 of 6 registration under Section 80G of the Income Tax Act, 1961 vide DIN: ITBA/EXM/F/EXM4512024- 251L074701894(1) dated Lg.O3.ZO25, is erroneous, arbitrary, unjustified, and against the principles of natural justice.

The Learned CIT (Exemptions) rejected the appellant's registration under Section 80G, stating that the trust's activities are not commensurate with its registered objectives. However, the appellant asserts that the Learned CIT(Exemptions) failed to properly understand the activities conducted by the trust.

The rejection of the application based on an observation that "no substantial charitable activity is being carried out" is contrary to the facts and unsupported by any findings on record, especially when the trust has submitted evidence of its ongoing charitable initiatives' 6. The action of the CIT (Exemptions) in rejecting the application without affording a reasonable opportunity for persona! hearing or clarification, especially after submission of documents, violates the principles of natural justice and fair procedure.

The action of the Learned CIT (Exemptions) in rejecting the application u/s 80G without invoking condonation provisions or offering guidance on remedying the procedural lapse is arbitrary and violative of the principles of natural justice.

The appellant craves leave to add, amend, modify, or withdraw any of the grounds at the time of hearing.”

The brief facts of the case are that the assessee is a charitable organization. It had filed an application in Form No. 10AB seeking approval under Section 80G of the Income Tax Act, 1961 (“the Act”) before the Ld. CIT(E). After considering the submissions made by the assessee, the Ld. CIT(E) rejected the application of the assessee by order dated 19.03.2025 in Form No. 10AD, contending that the activity of the assessee are not Page 3 of 6 commensurate with its objects and the same are not as per the provisions of section 80G of the Act.

Aggrieved with the order of Ld. CIT(E), the assessee is in appeal before the Tribunal. The Ld. AR submitted that, during the course of proceedings, the Ld. CIT(E) issued notices to the assessee on 3.12.2024 and 17.02.2025. The assessee had duly complied with by the notice of the Ld. CIT (E) dated 17.02.2025 on 27.02.2025 (page nos.2 to 20 of the Paper Book). In response to the notice, the assessee submitted all requisite documents including the Trust Deed, activity reports, photographs etc., substantiating its charitable activities. He further submitted that, the Ld. CIT(E) rejected the application of the assessee without pointing out any specific deficiency in the documents furnished by the assessee. It was also submitted that the impugned order is a non-speaking order, violating principles of natural justice. The Ld. AR prayed that the matter be remanded back to the Ld. CIT(E) to consider the submissions afresh and pass a reasoned and speaking order, after giving the assessee an effective opportunity of being heard.

The Ld. DR supported the order of the Ld. CIT(E), stating that the Ld. CIT(E) has jurisdiction to assess the genuineness of activities before granting approval under Section 80G of the Act. However, she fairly agreed that the impugned order does not record any specific finding or reasoning in relation to the material placed on record.

We have heard the rival contentions and perused the material available on record. It is an undisputed fact that the assessee had responded to the notice dated 17.02.2025 issued by the Ld. CIT(E) and furnished relevant documents substantiating its charitable activities. These include the Trust Deed, activity reports and photographs (page nos. 2 to 20 of the paper book). On perusal of the impugned order passed in Form No. 10AD, we find that the Ld. CIT(E) has not specifically referred to any of the documents filed by the assessee or given any finding as to why the evidence was insufficient. The order merely states in a cryptic manner that the activity of the assessee are not commensurate with its objects and the same are not as per the provisions of section 80G of the Act. A non-speaking order rejecting statutory approval, without dealing with the submissions and evidence furnished, is violative of the principles of natural justice. In view of the above, we are inclined to set aside the impugned order and restore the matter to the file of the Ld. CIT(E) for de novo adjudication. The Ld. CIT(E) is directed to examine all the documents submitted by the assessee, grant an opportunity of personal hearing, permit filing of any additional documents, and thereafter pass a speaking and reasoned order in accordance with law.

In the result, the appeal filed by the assessee is allowed for statistical purposes.