YAKSHIT YUVA FOUNDATION,BELAGAVI vs. CIT (EXEMPTION), BENGALURU

& 234/PAN/2025 5. As a corollary the application for grant of regular 80G recognition was also rejected by Ld. CIT(A) on a like reasons as paraphrased hereinbefore.

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& 234/PAN/2025 7. We have heard both rival parties; and subject to the provisions of rule 18 of ITAT Rules, perused material placed on record and considered the facts in the light of settled position of law.

A. Applications for registration were Time Barred 8. We note that, in this twin cases the appellant trust right from the date of its formation on 14/11/2022 claimed to have commenced its activities which was accepted by the Revenue and accordingly on such basis provisional registrations u/s 12AB & 80G were granted to the appellant on 24/03/2023. Since the activities of the appellant were already commenced prior to grant of former provisional registrations, therefore the appellant was under obligation to apply for regular registration separately within a period six months from such grant of provisional registrations.

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& 234/PAN/2025 9. However, the appellant admittedly have applied for regular registrations after the expiry of such period of six month from the grant of provisional registration. As solidified by both the parties that said twin applications were time barred in law. The Ld. CIT(A) therefore rejected the twin applications as time barred in first place. Having done so, the Ld. CIT(A) further travelled on merits and after a threadbare discussion rejected the applications on merits as well.

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& 234/PAN/2025 11. In our thoughtful consideration, when an application or appeal is barred by limitation and the adjudicating or appellate authority who is in law empowered to condone the delay, having noted such fact of time barred application/appeal, deals therewith in the order and then if proceeds on merits of the matter then it is good enough to sweepingly infer that, said adjudication on merits in law succeeded only upon due admission of belated application or appeal, thus by deemingly condoning the delay in filing of such application or instituting of such appeal as the case may be. We found this proposition fortified in the case of ‘Shyam Sunder Sarma Vs Pannalal Jaiswal [2005, 1 SCC 436(SC)] which in turn followed the larger bench decision rendered in ‘Sheodan Singh Vs Daryao Kunwar’ [AIR 1966, SC 1332] by the Hon’ble Apex Court.

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& 234/PAN/2025 12. A similar direction can also be found in the recent judgment of Hon’ble Apex Court in the case of ‘Dilip Kumar Vs Esque Finamark Pvt Ltd.’ [2025, INSC 102] wherein their hon’ble lordship made it clear that, ‘the merits of the case can be examined by the adjudicating or appellate forum only when delay (if any) in filing such application or appeal is condoned and not otherwise.

& 234/PAN/2025 14. The Ld. DR Mr Zain could hardly lay any contrary decision or any material before us to showcase that appellant was benefited by lodging a time barred applications for regular registration. Therefore, we find merits in appellant’s argument that, since the Ld. CIT(A) in law had power to condone the delay occurred in its case and who indeed choose to proceed on merits in view of the aforestated judicial precedents clearly suggests that the said delay is condoned. Faced with the situation, in view of the aforestated judicial precedents and Ld. CIT(E)’s action in adjudicating the application filed for registration on its merits who in law had power to condone the same, we deem it fit to vacate the first premise of delay in filing applications as founded in rejecting the impugned applications by the Ld. CIT(E). Ergo ordered accordingly.

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& 234/PAN/2025 15. Now coming to merits of the case; we observed that, in rejecting the application on merits the Ld. CIT(E) come to a conclusion that, the appellant’s activities of providing ‘taekwondo training’ does not fall within the scope of charitable activities as defined in section 2(15) of the Act. In the course of hearing the Ld. DR Mr Zain while relying on the impugned order bottled-up the denial by adding that such training centre is in the nature of commercial establishment therefore cannot even sheltered in residuary limb ‘the advancement of any other object of public utility’ of section 2(15) of the Act. Au contraire appellant claimed that; it an institute established predominantly for imparting ‘sports education/training’ as per section 2(15) and hence eligible for registration u/s 12AB, & 80G of the Act thus for exemption from taxation u/s 11 of the Act.

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& 234/PAN/2025 16. Before analysing the connotation and applicability of the expression 'education', it would be worthwhile to note the actual activity carried on by the assessee. It can be seen from registered trust deed of the appellant that, the principal object of the assessee revolves around promoting & instilling values of sportsmanship among the youngster, developing young athletes in taekwondo, sports training to the children/students from rural and underprivileged class/areas. We also note that, the appellant’s object is very much aligned with the national education policy declared by the central government of India in 2020. Of course, such provision of training was made available either for a nominal fee from certain class of student or free for underprivileged students, government running schools & colleges in Karnataka & Maharashtra etc.

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& 234/PAN/2025 17. It is pulpable from the annual activity reports submitted for three years (2023, 2024 & 2025) that, the appellant trust in those years of its operation had reached out to thousands of students across the state of Karnataka & Maharashtra to inspire & instil self- defense among underprivileged girls studying in government aided schools. In the course of its operation, the appellant had trained more than 936 underprivileged girls through undertaking 72+ ‘kick & Shout’ self-defense workshops. Further the appellant trust was regular in arranging for or participating in ‘Taekwondo competitions’ across the state of Maharashtra and Karnataka. This clearly shows that the assessee was organizing its operation with much less exploiting it commercially. The holistic vouching suggest that, charging nominal fees from students in substance lacked commercial principle.

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& 234/PAN/2025 18. Now coming to the activity of sports training as whether it constitutes education, we note that the term ‘education’ has not been defined in the Act, however it has been interpreted in context of section 2(15) by the Hon'ble Apex Court in ‘Loka Shikshana Trust Vs CIT’ [1975, 101 ITR 234 (SC)]. The Hon’ble lordship therein held that; ‘what education connotes in that clause 2(15) is the process of training and developing the knowledge, skill, mind and character of students by normal schooling.' It clearly emerges from former factual narration of hon’ble lordship that; so long as assessee is engaged into developing any knowledge or skill or character of school/college going students, etc., such assessee’s activities of imparting scholastic training shall fall within the scope of ‘education’ for the purpose of section 2(15) of the Act.

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& 234/PAN/2025 19. The term schooling also neither defined in the Act nor in the General Clauses Act, therefore resorting to ‘common parlance test’ laid in ‘CoC Vs M/s Welkin Foods’ [2026 INSC 19 (SC)], as it understood that ‘a process of receiving formal education, training or instruction typically within an institution like school’. This definition necessarily expunges solitariness of school premises as the only institution for imparting education, training, or instructions etc. Therefore, the conjoint reading of interpretation laid in ‘Loka Shikshana Trust’ (supra) & former discussion plainly suggests that, irrespective of nature & character of establishment, the process of imparting scholastic training & developing knowledge, skill, mind, and character of students is sole determinant factor in earmarking the activity as ‘education’ for the purpose of section (15) of the Act.

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& 234/PAN/2025 20. The instant case, the appellant is admittedly engaged into imparting and developing sports knowledge to school going girls & underprivileged students either inhouse by running own institute/class [where it collects nominal fees for its maintenance] or by arranging workshops in/for government schools etc., in the state of Karnataka & Maharashtra. In view of interpretation laid in ‘Loka Shikshana Trust’ (supra) & ‘ACIT Vs AUDA’ [2022, 115 CCH 253] and the definition of schooling adopted on the strength of judicial support laid in ‘CoC Vs M/s Welkin Foods’ (supra), it is ostensibly clear that an activity of providing scholastic sports training and conducting incidental workshops was with a focal view to develop sports knowledge, skill, mind & character of school students, which does fall in the realm of ‘education’ as used in section 2(15) of the Act.

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& 234/PAN/2025 21. A similar case where assessee trust engaged in providing vocational training & skill development of youth in the area of science, arts, business & commerce came for consideration before the Hon’ble jurisdictional High Court in ‘Deshpande Education Trust Vs ACIT’ [2025, 181 taxmann.com 796], wherein their hon’ble lordship following the decision laid in ‘CIT(E) Vs Unique Education Society’ [2024, 168 Taxmann.com 448 (P&H)] have categorically vide para 14 held that; ‘14. In the case on hand as well, the appellant's activity includes vocational training for the development of soft skills of underprivileged, poor and women to develop their skills in the area of science, arts, business, and commerce by providing various programmes in order to make them employable. The activity that the appellant is indulged in includes systematic instructions or training which involves the process of teaching and learning various subjects. Moreover, in the subsequent AYs, the appellant has affiliated with Karnataka University, Dharwad and is offering Master of Social Entrepreneurship Course in exchange of fees. Hence, it cannot be stated that the activities offered by the appellant are not 'education' under Section 2(15) of the Act. (Emphasis supplied)

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& 234/PAN/2025 22. In the instant case, the appellant trust also engaged in activity of providing scholiastic vocational training and skill development to rural youth predominantly schoolgirls and underprivileged school children in the areas of sports and self-defense including martial arts. Since carrying out such activity/operations included a systematic instructions or training session which involved process of teaching and learning, in view of the former judicial precedents it could be held that such activities offered were in the nature of 'education' for the purpose of section 2(15) of the Act. And in result, the appellant was entitled for grant of regular registration u/s 12AB & 80G(5) of the Act. In view of this, we deem it fit to vacate the impugned observation vis-à-vis adjudication laid on this score and direct the Ld. CIT(A) to grant registration.

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& 234/PAN/2025 23. Now coming appellant’s alternate claim that its activity of imparting ‘Taekwondo Training’ being a notified sports/games falls within the ambit of ‘advancement of any other object of general public utility,’ thus within section 2(15) of the Act. Whereas the Revenue treats it to be of commercial in nature therefore denied the registration.

& 234/PAN/2025 games/sports and one of such notification with which the present adjudication is concerned was issued by the board vide its Notification No. 03/2010 dt. 12/01/2010. By clause (xlviii) the board recognised/included the ‘Taekwondo’ sports/games for the purpose of section 80G vis-à-vis for section 2(15) of the Act.

& 234/PAN/2025 assessee is in compliance of such requirements of any other law for the time being in force as are material for the purpose of achieving its objects. Conversely in our considered view the registration can be denied only if the material placed by the appellant or brought on record by the Revenue clearly & cumulatively suggests that; the activities/operations of the appellant badly lacks genuineness and the appellant’s noncompliance of applicable laws are so material that achieving the purpose/object for which it came into existence becomes impossible. In the impugned proceedings neither of these findings were present, therefore the order of rejection deserves to be vacated on this score as arbitrary and contra-legem.

& 234/PAN/2025 exemption u/s 11 of the Act came for consideration before the Ld. Co-ordinate bench in ‘Dahisar Sports Foundation Vs ITO(E)’ [2017, 87 Taxmann.com 313 (Mum)], wherein the assessee-trust’s main object was promotion of sports and games as advancement of any other object of general public utility. There it held that, collecting of certain charges from coaching camps meant for promotion of sports and games only could not alter its basic character of promotion of sports/games being charitable purpose. Therefore, the assessee held to be eligible for registration u/s 12A/12AB & consequential registration u/s 80G of the Act and thus for claiming exemption u/s 11 of the Act. A similar view that collecting fee would not itself disqualify the assessee from registration & disentitle for exemption was found taken in ‘ITO Vs Chembur Gymkhana’ [2017, 80 Taxmann.com 354 (Mum)].

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& 234/PAN/2025 27. The respondent Revenue could lay much less material to showcase the disqualification of the appellant assessee for grant of regular registration u/s 12AB of the Act and equal registration u/s 80G of the Act. Faced with the situation, without multiplying the authority on the subject matter, we set-aside the impugned orders on both the score and remand these matters to the file of Ld. CIT(E) with a direction to grant both the registrations in accordance with law after ensuring the procedural compliance if any remained uncomplied previously.

-S/d- -S/d- PAVAN KUMAR GADALE G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER Panaji/Dt: 06th March, 2026. Copy of the Order forwarded to :

1. 1. The Appellant.

2. The Respondent.