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Facts
The assessee, Asha Education Trust, applied for approval under Section 80G of the Income Tax Act for AY 2025-26. The CIT(E) rejected the application, citing that the trust did not carry out any charitable activity in FY 2022-23 and 2023-24 due to insufficient funds.
Held
The Tribunal held that while the assessee did not carry out charitable activities in the relevant years due to financial constraints, its objective was not questionable and it had a regular registration. Therefore, the impugned order was set aside.
Key Issues
Whether the rejection of approval under Section 80G was justified solely due to non-carrying out of charitable activities in specific financial years, despite having a valid registration and a laudable objective.
Sections Cited
80G(5)(iii), 80G, 12A, 12AB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘A’: NEW DELHI
Before: SHRI CHALLA NAGENDRA PRASAD & SHRI AVDHESH KUMAR MISHRA
A.Y. 2025-26 Asha Education Trust Commissioner of Income D-275, Kargil Apartment, Tax (Exemption), Sector-18A Dwarka, New Delhi Vs. E-2, Civic Centre, PAN: AABTA3570E Minto Road, New Delhi (Appellant) (Respondent) Appellant by Sh.Deepesk Singh, Advocate Respondent by Sh. Jitender Singh, CIT-DR Date of Hearing 16/10/2025 Date of Pronouncement 30/10/2025 ORDER
PER AVDHESH KUMAR MISHRA, AM
The appeal for the Assessment Year (‘AY’) 2025-26 filed by the assessee is directed against the order dated 11.11.2024 of the Commissioner of Income Tax (Exemption), New Delhi [‘CIT(E)’].
Vide sole substantial ground, the assessee has challenged rejection of approval under section 80G(5)(iii) of the Income Tax Act, 1961 (‘Act’)
The relevant facts giving rise to this appeal are that the assessee is incorporated in 2004. As per the assessee, it is engaged in education and healthcare for the underprivileged communities; however, it did not carry out any charitable activity in Financial Years 2022-23 and 2023-24 as the Asha Education Trust appellant assessee did not receive any donation in those years. The appellant assessee filed an application in 2024 for grant of approval under section 80G of the Act, which was rejected by the Ld. CIT(E) on the following reasoning:
“5. The trust is incorporated on 19.10.2004. The trust has been accorded registration in Old Regime vide S.no. DIT(E)/12a/2005-06/A1888/04/402 dated 27.06.2005. The trust is also registered in New Regime in Form 10AC vide date of registration dated 02.10.2021 from AY 2022-23 to A.Y 2026-27. However, on perusal of financials for FY 2022-23 and 2023-24, it is noticed that no charitable activity has been carried out by the applicant. The applicant has not carried out any charitable activity inspite of having Regular registration and provisional approval.
6. The applicant was asked to provide complete addresses of all the premises used for carrying out its activities along with NOC. The applicant submitted the NOC; however, the said NOC has been signed on 08.07.2016 and 01.08.2017. The applicant was asked to explain the same. However, the applicant did not submit any reply in this regard.
7. In view of the facts stated above, approval u/s 80G(5)(iii) of I.T Act is rejected. Since, the application filed in Form 10AB seeking approval Clause (iii) of first proviso to sub-section (5) of section 80G of the Act is rejected, the provisional approval granted vide order dated 10.03.2022 having Unique Registration Number AABTA3570EF20220 for the period from AY 2022-23, is also cancelled.”
Before us, the Ld. Counsel submitted that the society trust was having regular registration vide order dated 02.10.2021. The appellant assessee did not carry out any charitable activity in Financial Years 2022-23 and 2023-24 as it was not having any sufficient fund to do so, which was evident from its Income & Expenditure Accounts of these years. The Ld. Counsel drew our attention to the fact that the appellant assessee trust got its new appointed trustees; namely, Rajeev Dhawan, Mr. Girish Kumar Sidana and Mr. Rajesh Asha Education Trust Talwar in August, 2024. The appellant assessee had decided to endeavor to fulfill its objectives with mission mode in the field of education by developing skills of weaker section in the Healthcare Eco-system. It was submitted that the appellant assessee intended to provide Ministry of Skill Development & Entrepreneurship (MSDE) approved Vocational trainings to the children from underprivileged segment with humble background, especially girl candidates. To augment its charitable activities, the appellant assessee needed funds from Donors and the approval under section 80G of the Act would help in achieving objectives of the appellant assessee. It was submitted that the half of the period for which the application filed had gone by now and any lapse of further time would affect adversely. His argument was that had the assessee failed in doing the charitable activities and violating any law of the land, etc. the approval under section 12A/12AB and 80G of the Act could be withdrawn/ discontinued/not renewed. Here, the registration of the assessee under the Act was in existence and was not cancelled/withdrawn, which showed that the appellant assessee was existing for charitable activities, which could be done when the fund would be available to do so.
On the other hand, the Ld. CIT-DR defended the order of the Ld. CIT(E) and prayed for dismissal of the appeal.
We have heard both the parties and have perused the material available on record. The purpose of granting approval under section 80G of the Act is to provide/enhance the socio-economic welfare to achieve the directive principles Asha Education Trust of the state policy as all socio-welfare activities cannot be done solely by the Governments. Section 80G of the Act is welfare legislation. Charity can not be done when fund for mere survival is with the person intending to do good for the society at large. The appellant assessee has not carried out activities in the FYs 2022-23 and 2023-24 as evident from its Income & Expenditure Accounts of these years. Receipts are quite meagre even not sufficient for bare survival. Here, the objective of the appellant assessee is not questionable. Therefore, considering the larger interest of justice, above discussion, objectives, intent of provisions of section 80G of the Act and facts in entirety, we are setting aside the impugned order and are granting approval under section 80G(5) of the Act for the period for which the said application seeking approval under section 80G(5)(iii) of the Act has been filed.
In the result, the appeal is allowed as above.
Order pronounced in open Court on 30th October, 2025