BHINMAL WELFARE ASSOCIATION,MUMBAI V. CIT (EXEMPTIONS), MUMBAI

ITA 1071/MUM/2025

AI Insights

The case involves the Bhinwal Welfare Association, a Trust, which appealed against the decision of the Commissioner of Income Tax (Exemptions) rejecting their application for registration under section 80G of the Income Tax Act, 1961. The primary reasons for rejection included the incompleteness of the application and a specific clause in the Trust Deed that allowed for the application/receipt of funds outside India, which was found to be in violation of section 11 of the Act. The Tribunal considered the Trust's intention to amend the Trust Deed to restrict operations to India only and decided to set aside the CIT(E)'s order, allowing for a re-evaluation of the application.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 470942 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2022-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAKESH RANJAN
• Assessee Lawyers: BHUPENDRA SHAH
• Keywords: Set aside; Principle of natural justice; Charitable institution
• Section: 11; 80G

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA No.1071/MUM/2025 (Assessment Year 2022-23) Bhinwal Welfare Association, 115, Bullion House, Tamba Katta, Mumbadevi Road, Opp. Dagina Bazar, Phydonie, Mumbai – 400003 PAN : AACTB3671L ............... Appellant v/s CIT(Exemptions), Room No.601, 6th Floor, Cumballa Hill, MTNL TE Building, Peddar Road, Dr. Gopalrao Deshmukh Marg, Mumbai - 400026 ……………… Respondent Assessee by : Shri Bhupendra Shah Revenue by : Shri Rakesh Ranjan, CIT-DR Date of Hearing – 01/04/2025 Date of Order - 03/04/2025 O R D E R PER SANDEEP SINGH KARHAIL, J.M. The assessee has filed the present appeal against the impugned order dated 28/12/2024 passed by the learned Commissioner of Income Tax (Exemptions), Mumbai [“learned CIT(E)”], rejecting the application filed by the assessee seeking registration under section 80G of the Income Tax Act, 1961 (“the Act”). ITA No.1071/Mum/2025 (A.Y. 2022-23) 2 2. In this appeal, the assessee has raised the following grounds: – “1. In the facts and circumstances of the case and in law, the leaned CIT (Exemption) erred in not granting registration u/s 80G(5) of ITA, 1961, and rejecting the Application thereby not considering the submissions. 2. In the facts and circumstances of the case and in law, the leaned CIT (Exemption) erred in not granting an opportunity to the Appellant for personal hearing for rectifying the application submitted by the Appellant thereby violating principles of natural justice. [B] Relief Prayed: The appellant therefore prays Your Honour; 1) To restore the matter to the CIT[exemption] 2) To stay the order of CIT [exemption] till a fresh order is passed” 3. We have considered the submissions of both sides and perused the material available on record. The brief facts of the case are that the assessee is a Trust and filed an application in Form 10AB, requesting approval under clause (iii) of first proviso to section 80G(5) of the Act. Upon verification of the application in Form 10AB filed by the assessee, it was found that the application was incomplete, and all the documents required to accompany the application were not furnished. Accordingly, the assessee was asked to furnish the complete set of documents mentioned in Rule 11AA(2) of the Income Tax Rules, 1962. After going through the submissions made by the assessee, it was noticed from the Trust Deed/Memorandum of Association (“MOA”) that one of the objects of the assessee is in violation of the provisions of section 11 of the Act as the Trust intends to apply/receive funds outside India. Accordingly, a show cause notice was issued to the assessee. In response, the assessee submitted that the Trust wants to collaborate with organisations in India of international reputation, such as IIMs and IITs, as well as ITA No.1071/Mum/2025 (A.Y. 2022-23) 3 organisations such as Harvard or Oxford University, which are organisations of international reputation to give quality education to Indian students in India. The learned CIT(E), vide impugned order, after noting the objects of the Trust, concluded that the same conveys the intention of the Trust to utilise funds outside India, thereby leaving the possibility for future endeavours, which may involve expenditure outside the country. The learned CIT(E) further held that the assessee Trust ought to have amended the clauses of its MOA/Trust Deed to align with the provisions of the Act, however, the assessee has failed to do so. The learned CIT(E) held that the approval under section 80G of the Act is to be accorded to the assessee after being satisfied regarding the genuineness of the activities and the compliance of all the conditions mentioned in clauses (i) to (v) of section 80G(5) and any other provisions of the Act relevant to charitable institutions. Accordingly, the learned CIT(E) rejected the application filed by the assessee for seeking registration under section 80G of the Act. 4. During the hearing, the learned Authorized Representative (“learned AR”) reiterated the submissions made before the learned CIT(E) and submitted that the Trust has never applied funds outside India, nor is there any intention to do so in future. The learned AR further submitted that the Trust has initiated the process of modifying the provisions of its Trust Deed, which shall now specifically provide that the area of operations of the Trust will be restricted to territories of India only and not outside India. In this regard, the learned AR placed on record the draft copy of the scheme under section 50A of the Maharashtra Public Charitable Trust Act, 1950. ITA No.1071/Mum/2025 (A.Y. 2022-23) 4 5. Therefore, having considered the facts and circumstances of the present case, we deem it appropriate to restore the application for seeking registration under section 80G of the Act to the file of the learned CIT(E) for de novo adjudication with a direction to the assessee to file its amended object/Trust Deed at the earliest before the learned CIT(E), which may be considered in accordance with law. With the above directions, the impugned order is set aside, and grounds raised by the assessee are allowed for statistical purposes. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 03/04/2025 Sd/- VIKRAM SINGH YADAV ACCOUNTANT MEMBER Sd/- SANDEEP SINGH KARHAIL JUDICIAL MEMBER MUMBAI, DATED: 03/04/2025 Prabhat Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order Assistant Registrar ITAT, Mumbai "