KIRTI MAHAL SATSANG BHAWAN TRUST,MATHURA vs. CIT EXEMPTION, LUCKNOW

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ITA 96/LKW/2025Status: DisposedITAT Lucknow05 January 2026AY 2023-24Bench: SHRI KUL BHARAT (Vice President), SHRI ANADEE NATH MISSHRA (Accountant Member)4 pages

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Facts

The assessee, Kirti Mahal Satsang Bhawan Trust, filed applications for registration under section 12AB and for approval under section 80G(5) of the Income Tax Act, 1961. The CIT (Exemptions) rejected both applications, citing that the trust was not engaged in any substantial charitable activity as per its objects and the genuineness of its activities was not satisfactorily established. The assessee appealed to the Income Tax Appellate Tribunal.

Held

The Tribunal found merit in the assessee's argument that limited funds were primarily utilized for the construction of Satsang Bhawan, which aligns with its charitable objective, and that charitable activities have now commenced. Concluding that the construction was complete and activities were ongoing, the Tribunal set aside the CIT (Exemptions)'s orders and directed the acceptance of the assessee's applications under sections 12AB and 80G of the Act.

Key Issues

Whether the CIT (Exemptions) was justified in rejecting the trust's applications for registration under sections 12AB and 80G(5) of the Income Tax Act, 1961, due to a perceived lack of substantial charitable activity.

Sections Cited

Section 10 (second proviso to sub-section 23C), Section 80G(5), Section 12AB, Rule 2C (Income-tax Rules, 1962), Rule 11AA (Income-tax Rules, 1962)

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Income Tax Appellate Tribunal, LUCKNOW BENCH ‘A’, LUCKNOW

Before: SHRI KUL BHARAT & SHRI ANADEE NATH MISSHRA

For Appellant: Shri Umesh Seth, Advocate

PER ANADEE NATH MISSHRA:A.M.

(A) These two appeals have been filed by the assessee, against the impugned orders each dated 24/12/2024 passed by learned CIT (Exemptions), Lucknow under second proviso to sub-section 23C of section 10 and under section 80G(5) of the Income Tax Act, 1961 (“the Act” for short).

(B) The facts of the case, in brief, are that the assessee submitted an application in Form No. 10AB under Rule 2C of the Income-tax Rules, 1962 on 27/06/2024 seeking registration under section 12AB of the Act. The assessee also moved an application for registration of the trust u/s 80G(5) of the Act on 27/06/2024 in Form No.10AB under Rule 11AA of the Income-tax Rules, 1962. The application for registration under

I.T.A. No.95 & 96/Lkw/2025 Assessment Year:2023-24 2

section 12AB of the I.T. Act and for approval u/s 80G(5) of the I.T. Act was rejected by learned CIT (Exemptions) on the ground that the assessee was not carrying out any substantial charitable activity, as per objects of the trust. Being aggrieved, now the assessee is in appeal before the Income Tax Appellate Tribunal.

(C) During the course of hearing, learned Counsel for the assessee submitted that learned CIT (Exemptions) has wrongly rejected assessee’s application u/s 12AB and u/s 80G of the I. T. Act and denied registration to the assessee on the ground that the assessee trust was not engaged in any substantial charitable activity as per its objects. Learned Counsel for the assessee further submitted that the assessee had received limited contribution which was spent for construction of Satsang Bhawan. Regarding the present status, it was submitted by learned Counsel for the assessee that the construction of Satsang Bhawan is complete and charitable activities as per objects of the trust, including Satsang have began. Learned Counsel for the assessee also submitted that the construction of Satsang Bhawan was in accordance with the charitable objective of the assessee. He also submitted that the other charitable work could not be carried out at a large scale because of paucity of fund, as the funds were used mainly for construction of Satsang Bhawan. On the other hand, learned Departmental Representative relied on the order of learned CIT (Exemptions) and left the matter to the discretion of the Bench.