DR M BHANU PRASAD MEMORIAL TRUST,KAKINADA V. CIT (EXEMPTION) , HYDERABAD

ITA 39/HYD/2025

AI Insights

The case involves Dr. M. Bhanu Prasad Memorial Trust, which appealed against the decision of the Commissioner of Income Tax (Exemptions), Hyderabad, rejecting their application for registration under Section 80G of the Income Tax Act, 1961. The Trust argued that the rejection was inconsistent with their previously granted registration under Section 12A, which acknowledged their charitable activities. The Tribunal found that the Commissioner had not adequately considered the Trust's submissions and documents, leading to a non-speaking order that violated the principles of natural justice. Consequently, the Tribunal set aside the Commissioner's order and remitted the case for a fresh examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 668853 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: 2023-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDER KUMAR NAIK
• Assessee Lawyers: KEERTHANA
• Keywords: Set aside; Principle of natural justice
• Section: 11; 12A; 12; 80G

Judgement Text

" आयकर अपीलीय अधिकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘B’ Bench, Hyderabad श्री विजय पाल राि, उपाध् यक्ष एिं श्री मिुसूदन सािडिया, लेखा सदस् य क े समक्ष । BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER आ.अपी.सं /ITA No.39/Hyd/2025 (निर्धारण वर्ा/Assessment Year:2023-24) Dr. M. Bhanu Prasad Memorial Trust, Kakinada. PAN: AABTD2020Q Vs. Commissioner of Income Tax (Exemptions), Hyderabad. (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Ms. Keerthana, C.A. रधजस् व द्वधरध/Revenue by: Shri Narender Kumar Naik, CIT-DR सुिवधई की तधरीख/Date of hearing: 23/06/2025 घोर्णध की तधरीख/Pronouncement: 23/06/2025 आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M. : This appeal is filed by Dr. M. Bhanu Prasad Memorial Trust, (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Exemption), Hyderabad (“Ld. CIT(E)”), dated 11.12.2024 for the A.Y. 2023-24. ITA No.39/Hyd/2025 2 2. The assessee has raised the following grounds of appeal : “ 1. That the learned Commissioner of Income tax (Exemption), erred in law and on facts in rejecting the application in Form 10AB filed for registration under Section 80G, without properly appreciating that the Appellant is a trust duly registered under Section 12A of the Income Tax Act, 1961. 2. That the learned officer failed to appreciate that the Appellant has been carrying out charitable activities in accordance with the objects of the trust, which are eligible for exemption under Section 11 and 12 of the Income Tax Act, 1961, however has not granted exemption under Section 80G of the Income Tax Act, 1961 by rejecting Form 10AB. 3. That the learned officer acted arbitrarily and in violation of the principles of natural justice by rejecting the application without providing the Appellant with sufficient opportunity to rebut the observations or findings made in the impugned order. 4. That the learned officer has misconstrued the provisions of Section 80G and Form 10AB and erred in concluding that the charitable activities of the Appellant are not substantial, despite the fact that the Appellant has been submitting audited financial statements and other documents demonstrating the same. 5. That the rejection of the application under Section 80G is contrary to the provisions of law, as the Appellant has already been registered under Section 12A, which itself is prima facie evidence of the charitable nature and activities of the trust. ITA No.39/Hyd/2025 3 6. The appellant may add or alter or amend or modify or substitute or delete and or rescind all or any of the grounds of appeal at any time before or at the time of hearing of the appeal.” 3. The brief facts of the case are that, the assessee is a trust, had applied for registration u/s.80G of the Income Tax Act, 1961 (“the Act”) in Form no.10AB. The Ld. CIT(E) rejected the grant of registration of the assessee vide his order dated 11.12.2024 in Form no.10AD alleging that no substantial charitable activities are being carried out by the assessee. Aggrieved with the order of Ld. CIT(E), the assessee is in appeal before the Tribunal. 4. The learned Authorised Representative (“Ld. AR”) submitted that the assessee is a trust duly registered under Section 12A of the Act as evident from Form No. 10AC dated 02.122.2022 placed at page nos. 103–104 of the paper book, granting registration for the period from Assessment Year 2022–23 to Assessment Year 2026–27. The Ld. AR contended that having once recognised the charitable nature of the assessee’s objects and activities while granting registration under Section 12A, the rejection of the application under Section 80G on the ground that no substantial charitable activities are ITA No.39/Hyd/2025 4 being undertaken is inconsistent and contradictory. Further, the Ld. AR drew our attention to page nos. 1 to 146 of the paper book, which contain the details of notices issued by the Ld. CIT(E), submissions made in response to notices issued by the Ld. CIT(E) and various documentary evidences filed by the assessee before the Ld. CIT(E). It was submitted that these materials were filed before the authority, but the Ld. CIT(E) passed the impugned order without making any reference to or analysis of these documents, thereby violating the principles of natural justice. The Ld. AR thus prayed for setting aside the impugned order and remitting the matter back to the file of the Ld. CIT(E) for fresh adjudication after affording an opportunity of hearing. 5. The learned Departmental Representative (“Ld. DR”) supported the impugned order passed by the Ld. CIT(E). It was submitted that the grant of approval under Section 80G is a distinct and independent process, and that mere registration under Section 12A does not automatically entitle an assessee to 80G approval. ITA No.39/Hyd/2025 5 6. We have considered the rival submissions and perused the material available on record. It is undisputed that the assessee was granted registration under Section 12A of the Act vide Form 10AC dated 02.12.2022 placed at page nos. 103–104 of the paper book, for the period from Assessment Year 2022–23 to Assessment Year 2026–27. However, in the impugned order in Form 10AD dated 11.12.2024, the application for registration under Section 80G of the Act has been rejected summarily on the ground that the assessee did not carry out substantial charitable activities. We find merit in the submission of the Ld. AR that this conclusion was reached without any discussion of the documentary evidences placed before the authority. On a plain reading, the impugned order lacks reasoning and does not identify any specific deficiencies in the submissions or documents furnished by the assessee. It is a non-speaking order, which renders it unsustainable in the eyes of law. In view of the above, and in the interest of justice, we deem it appropriate to set aside the impugned order and restore the matter to the file of the Ld. CIT(E) with the directions that the Ld. CIT(E) shall examine afresh the application in Form 10AB, taking into account the submissions ITA No.39/Hyd/2025 6 and documents already filed. We also direct that the assessee shall be permitted to file any further supporting material, if required and the Ld. CIT(E) shall provide an effective opportunity of hearing. 7. In the result, the appeal of the assessee is allowed for statistical purposes in the terms indicated above. Order pronounced in the open Court on 23rd June, 2025. Sd/- Sd/- (VIJAY PAL RAO) (MADHUSUDAN SAWDIA) VICE PRESIDENT ACCOUNTANT MEMBER Hyderabad. Dated: 23.06.2025. * Reddy gp Copy of the Order forwarded to : 1. Dr. M. Bhanu Prasad Memorial Trust, KD Collectorate, S.O. Kakinada (Urban) – 533 001 Andhra Pradesh. 2. CIT( E ), Hyderabad. 3. Pr.CIT, Hyderabad. 4. DR, ITAT, Hyderabad. 5. Guard file. BY ORDER, "