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Facts
The assessee trust applied for registration under Section 12A of the Income Tax Act and approval under Section 80G(5). The CIT(E) rejected the application for registration, granting it only as a 'religious entity' for a limited period, and also rejected the application for approval under Section 80G(5). The assessee contended that the CIT(E) failed to consider its charitable activities and treated it as solely religious.
Held
The Tribunal found that the CIT(E)'s order was a 'non-speaking order' as it failed to discuss the charitable activities of the trust and improperly rejected the application for registration as a charitable trust and for approval under Section 80G(5). Therefore, the matter was remanded back to the CIT(E) for fresh consideration.
Key Issues
Whether the CIT(E) erred in rejecting the application for registration under Section 12A and approval under Section 80G(5) without properly considering the trust's charitable activities. Whether the CIT(E)'s order was a non-speaking order.
Sections Cited
12A, 12AA, 12AB(1)(b), 80G(5)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AMRITSAR BENCH: AMRITSAR.
Before: MEMBER & SH. UDAYAN DAS GUPTA
Appellant by Sh. Deepak Aggarwal, Adv. Respondent by Dr. Vedanshu Tripathi, CIT. DR Date of Hearing 27.03.2025 Date of Pronouncement 24.04.2025 ORDER Per: Udayan Das Gupta, J.M.:
Both the appeals of the assessee are directed against the orders of the ld. Commissioner of Income Tax (Exemptions), Chandigarh, one rejecting the application of the assessee for registration u/s 12A and another rejecting application for approval u/s 80G (5) of the Act 61, both, vide separate orders of even date 14/06/2024.
& 490/Asr/2024 Assessment Year.: 2024-25 2 ITA 489/ ASR / 2024 Asst Year : 2024-25
The grounds taken by the assessee in memorandum of appeal are as follows:
“1. That the ld. CIT was not justified in rejecting the application for registration u/s 12AA of the Appellant /Trust for carrying out charitable activities on the ground that the appellant trust is a areligious trust whereas as per the appellant all the objects and / or activity of the trust are charitable in nature, therefore, the impugned order being devoid of merits is liable to be set aside.
2. That the assessee prays for amendment and/or addition of any other ground of appeal during the course of present appellate proceedings.”
Brief fact of the case is that the assessee trust claimed to be engaged in charitable activities, has applied for registration u/s 12A of the Act, as a charitable and religious trust, but the registration has been allowed by the Ld. CIT (E) u/s 12AB(1)(b) of the Act considering the assessee to be only a “religious entity” for the period 2024-25 to 2028-29, date of approval being 14th June, 2024.
The Ld. AR of the assessee, submitted that the application for registration u/s 12A of the Act 61 , has not been considered by the Ld. CIT ( E ), in its proper perspective ignoring the basic objects of charity for which the trust has been formed and the various charitable activities carried out by the trust ignoring the documentary evidence and proof of which are already on record and the findings of & 490/Asr/2024 Assessment Year.: 2024-25 3 the Ld. CIT ( E ) is only restricted to its religious activities, totally ignoring the nature of charitable activities that are carried out by the assessee trust, and the application for registration has not been considered as a whole, in its true perspective, which amounts to rejection of the application for registration u/s 12A as a charitable trust, and he further submits that the order of the Ld. CIT ( E ) dated 14th June, 2024, there is no specific findings regarding the charitable activities that are carried out and there are no findings or discussion as to why the claim for registration as a charitable trust has not been allowed and he prays that since it is a “non speaking order” regarding its claim of charitable activities , the matter may please be remanded for fresh consideration on merits.
The Ld. DR relied on the order of the Ld. CIT (E).
We have heard the rival counsels and considered the materials on record and we find that the registration has been granted to the trust as a “ religious entity” subject to conditions contained in annexure attached to the CIT ( E ) order, but without any discussion as to why the application of the assessee trust for registration as a charitable trust , has not been considered (or ignored ), which make the order passed by the authority a cryptic and non - speaking order and the same is not legally sustainable .
& 490/Asr/2024 Assessment Year.: 2024-25 4 6.1 As such in the interest of justice, we remand the matter back to the Ld. CIT (E), to consider the application of the assessee trust, for registration u/s 12A, afresh especially considering all the relevant activities carried out by the trust (charitable and religious) and to proceed with the registration process after being satisfied about the objects and genuineness of the activities as required under the provisions of the Act 61.
The assessee is also directed to file all necessary supporting documents and submissions in support of its contention before the Ld. CIT (E) and to fully cooperate in fresh proceedings. We have not expressed any opinion on merits.
In the result the appeal of the assessee is allowed for statistical purpose.
ITA / 490 / ASR / 2024
This appeal is filed by the assessee against the rejection of application for approval filed u/s 80G(5)(iii) of the Act 61. This application has been rejected on the finding of the Ld. CIT (E), that the trust has been established wholly or substantially the whole of which is of religious nature and in such cases the trust cannot be said to be established for charitable purposes. However, the claim of the assessee is that the activities of the trust are for charitable purpose as stipulated in the objects of the trust and supported by documentary evidence along with religious activities also, but the charitable activities carried out, has not been considered by & 490/Asr/2024 Assessment Year.: 2024-25 5 the Ld. CIT (E), while disposing off the application u/s 80G (5), which is not as per provisions of law.
Since, we have already remanded the matter in ITA / 489 / ASR / 2024, back to the Ld. CIT (E) for fresh consideration on the application for registration u/s 12A on merits, our observation, applies mutatis mutandis to this appeal also, and we also render this matter back to the Ld. CIT (E), for fresh consideration of the application u/s 80G (5), in tandem with the application for registration u/s 12A of the Act 61.
In the result, both the appeals of the assessee bearing & 490/Asr/2024 are allowed for statistical purposes.
Order pronounced on 24.04.2025 at Amritsar, Punjab in accordance with Rule 34(4) of the Income tax (Appellate Tribunal) Rules, 1963.