VIDYA BHARATI KOKAN MUMBAI,MUMBAI vs. COMMISSIONER OF INCOME TAX (EXEMPTION), MUMBAI

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ITA 4423/MUM/2024Status: DisposedITAT Mumbai29 November 2024AY 2023-244 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the documentary evidence produced by the assessee before the Tribunal was not made available to the CIT(Exemption). Therefore, deeming it proper to restore the matter to the CIT(Exemption) for a fresh adjudication and decision on merits, the Tribunal allowed both appeals for statistical purposes. This implies that the CIT(Exemption) will re-examine the applications for registration under Section 12AB (as indicated in the order, though Section 12A was mentioned in the grounds) and approval under Section 80G, considering the evidence presented by the assessee. The specific findings on the interpretation of Section 2(15) or the charitable nature of the activities were not made by the Tribunal in this order, as the matter was remanded. No issue was expressly left undecided.

What were the facts?

The assessee, Vidya Bharati Kokan Mumbai, filed two appeals before the Income-Tax Appellate Tribunal (ITAT), Mumbai, against orders passed by the Commissioner of Income-tax (Exemption) (CIT(Exemption)) on March 27, 2024. These orders rejected the assessee's applications for registration under Section 12A and approval under Section 80G of the Income-tax Act, 1961, for the assessment year 2023-24. The CIT(Exemption) had issued a show cause notice seeking details of affiliating university/institute and certificates for running schools/ashrams. The assessee explained their activities were in education and imparting Indian cultural values through association with other institutions, not being directly affiliated. The CIT(Exemption) rejected the applications, stating the assessee collected fees and lacked affiliation, thus not engaged in charitable activity. The appeals were filed with a delay of 95 days, which the Tribunal condoned on grounds of the main trustee's ill-health.

What were the issues?

1. Whether the assessee's application for registration under Section 12A of the Income-tax Act, 1961, was rightly rejected by the CIT(Exemption)? 2. Whether the assessee's application for approval under Section 80G of the Income-tax Act, 1961, was rightly rejected by the CIT(Exemption)? 3. Whether the objects of the trust fall under the definition of charitable purpose as per Section 2(15) of the Income-tax Act, 1961? Assessee's Contentions: The assessee argued that its activities of providing education in the traditional Indian system constitute charitable activity. They submitted a paper book with documentary evidence, photographs, and news reports to support their claim of charitable activities and cited judicial pronouncements. The assessee also contended that their activities are charitable in nature under Section 2(15). Revenue's Contentions: The revenue, through the CIT(Exemption)'s order, contended that since the assessee collected fees from trainees/students and lacked affiliation with any university or board, it was not engaged in any charitable activity. The rejection of the Section 12A application also led to the rejection of the Section 80G application.

Which sections of the Income-tax Act were involved?

Section 12A,Section 80G,Section 2(15),Section 12AB

AI-generated summary — verify with the full judgment below

Before: SHRI SANDEEP SINGH KARHAIL & SMT. RENU JAUHRI

For Appellant: Shri Chandan Katariya
For Respondent: Shri Yogesh Kamat
Hearing: 13.11.2024Pronounced: 29.11.2024

Heard together (2 matters)

ITA No. 4423/MUM/2024
ITA No. 4424/MUM/2024

Read from the judgment's own cause title. This page is filed under one of them.

Assessee by : Shri Chandan Katariya Revenue by : Shri Yogesh Kamat Date of Hearing 13.11.2024 Date of Pronouncement 29.11.2024 आदेश / O R D E R PER RENU JAUHRI [A.M.] :- These two appeals are filed by the assessee against the orders of the Learned Commissioner of Income-tax (Exemption), Mumbai [hereinafter referred to as “CIT(Exemption)”] u/s 12A & 80G of the Income-tax Act, 1961 [hereinafter referred to as “Act”] passed both on 27.03.2024.

& 4424/Mum/2024 A.Y. 2023-24 Vidya Bharati Kokan Mumbai “1. That the learned Commissioner of Income Tax (Exemptions) has erred both in law and on facts in rejecting application for registration under Section 80G((5)(i) of Income Tax Act, 1961.

2.

That the learned Commissioner of Income Tax (Exemptions) has erred both in law and on facts in application of objects of the trust under section 2(15) of Income Tax Act, 1961.

3.

The appellant craves leave to add/delete/modify amend all or any of the grounds of appeal “1. That the learned Commissioner of Income Tax (Exemptions) has erred both in law and on facts in rejecting application for registration under Section 12A of Income Tax Act, 1961.

2. That the learned Commissioner of Income Tax (Exemptions) has erred both in law and on facts in application of objects of the trust under section 2(15) of Income Tax Act, 1961.

3. The appellant craves leave to add/delete/modify amend all or any of the grounds of appeal”

3. The brief facts of the case are that the assessee trust is a charitable organization which was created on 17.06.2007. It is registered with the Charity Commissioner of Maharashtra. The assessee applied for registration u/s 12A as well as for approval u/s 80G of the Act in prescribed forms. Vide orders dated 27.03.2024, the Ld. CIT(Exemption) rejected the assessee’s both applications. A show cause notice was issued by the Ld. CIT(Exemption) requiring the assessee to furnish details of affiliating university/institute and copy of certificate issued to them for running school/ashram. It was explained by the assessee that they are working in the field of education by way of training and educational activity of providing fundamental values of Indian culturel to the students. This activity is conducted by way of association with the other schools and institutions and that the trust is not affiliated to any university, board etc.. However, Ld. CIT(Exemption) held that since no affiliation certificate of any & 4424/Mum/2024 A.Y. 2023-24 Vidya Bharati Kokan Mumbai University etc. is granted to the assessee and they have collected fees from trainees/students, therefore, it is not engaged in any charitable activity. Accordingly, the application for registration u/s 12A was rejected.

4.

With regard to the application for approval u/s 80G, it was observed by the Ld. CIT(Exemption) that since its application for registration u/s 12AB has been rejected, it is not eligible for approval u/s 80G of the Act. Accordingly, the assessee’s application dated 20.09.2023 for approval u/s 80G was also rejected vide order dated 27.03.2024.

5.

At the outset, it is noticed that the appeals have been filed after a delay of 95 days. The assessee has filed an affidavit and an application for condonation of delay on the ground of ill-health of the main trustee. Requisite documents and evidences in support of his hospitalization and treatment have been filed. In view of these facts, the delay in filing of the appeals is hereby condoned.

6.

We have heard the rival submission on merits. It was argued by the Ld. AR that the activity to provide education of under traditional Indian system was a charitable activity. He has furnished a paper book containing details, documentary evidences, photographs and news reports to establish the charitable activities under taken by the assessee trust as well as judicial pronouncement to establish that the activities of the trust are charitable in nature. However, the documentary evidences produced before us were not made available to the Ld. CIT (Exemption. We, therefore, deem it proper to & 4424/Mum/2024 A.Y. 2023-24 Vidya Bharati Kokan Mumbai restore the matter to the Ld. CIT (Exemption) for a fresh adjudication and decision on merits in respect of application for registration u/s 12AB and approval u/s 80G of the Act.

7.

In the result, both the appeals of the assessee are allowed for statistical purposes. Order pronounced in the open court on 29.11.2024.

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