FEHMICARE FOUNDATION,HYDERABAD V. CIT (EXEMPTIONS), HYDERABAD

ITA 734/HYD/2025

AI Insights

M/s. Fehmicare Foundation, a trust engaged in charitable activities, appealed against the rejection of their application for final registration under section 12AB of the Income Tax Act, 1961, by the Commissioner of Income Tax (Exemptions), Hyderabad. The CIT(E) had rejected the application on the grounds that the trust's activities were not in accordance with its stated objectives as per the trust deed. The Tribunal found that the CIT(E) had not adequately considered the detailed submissions and evidence provided by the trust, leading to a decision that was deemed mechanical and devoid of proper reasoning. Consequently, the Tribunal set aside the CIT(E)'s order and remanded the matter for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 708656 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDER KUMAR NAIK
• Assessee Lawyers: PAWAN KUMAR C HAKRAPANI
• Keywords: Set aside; Opportunity of being heard; Additional evidence; Principle of natural justice

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 Nos.733 & 734/Hyd/2025 M/s. Fehmicare Foundation, Hyderabad. PAN:AAATF4096R Vs. Commissioner of Income Tax (Exemptions), Hyderabad. (Appellant) (Respondent) निर्धारिती द्वधिध/Assessee by: Shri Pawan Kumar Chakrapani, C.A. िधजस्‍ व द्वधिध/Revenue by: Shri Narender Kumar Naik, CIT-DR सुिवधई की तधिीख/Date of hearing: 16/07/2025 घोषणध की तधिीख/Pronouncement: 18/07/2025 आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M. : These appeals are filed by M/s. Fehmicare Foundation (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Exemptions), Hyderabad (“Ld. CIT(E)”), both dated 13.02.2025. Since these appeals belong to the ITA Nos.733 & 734/Hyd/2025 2 same assessee and issues involved are identical, they are heard together and one consolidated order is being passed for the sake of convenience and brevity. 2. We take up ITA No.733/Hyd/2025 as lead appeal. The assessee has raised the following grounds of appeal : “ 1. The order of rejection for approval under section 12AB of the Act, passed by the learned Principal Commissioner of Income-tax [Exemption], Hyderabad, dated 13/02/2025, in so far as it is against the Appellant is opposed to law, equity, weight of evidence, probabilities and the facts and circumstances in the Appellant’s case. 2. Whether the learned Principal Commissioner of Income-tax (Exemptions), Hyderabad, is justified in mechanically rejecting the application filed by the Appellant for registration of the Appellant Trust under section 12AB of the Act, under the facts and circumstances of the case. 3. Whether the learned Principal Commissioner of Income-tax (Exemptions), Hyderabad, is justified in mechanically rejecting the application filed by the Appellant Trust under section 12AB stating that activities are not commensurate with the activities as per objectives of the registered Deed/MOA/AOA, which is not as per the provisions of the section 12AB of the Act, under the facts and circumstances of the case. 4. The Appellant craves leave of this Honorable Tribunal to add, alter, delete or substitute any or all of the grounds urged above, at the time of hearing of the appeal by this Honorable Tribunal. 5. In the view of the above and other grounds that may be urged at the time of the hearing of the appeal, the Appellant prays that the appeal may be allowed in the interest of justice and equity.” ITA Nos.733 & 734/Hyd/2025 3 3. The brief facts of the case are that, the assessee is a trust, was granted provisional registration under section 12A(1)(ac)(vi) of the Income Tax Act, 1961 (“the Act”) for the period from Assessment Year 2022–23 to Assessment Year 2026–27 vide Form No. 10AC dated 07.01.2022. Subsequently, the assessee filed an application for final registration under section 12A(1)(ac)(iii) of the Act in Form No. 10AB on 27.08.2024. The Ld. CIT(E), however, rejected the application for registration under section 12AB of the Act vide order dated 13.02.2025 passed in Form No. 10AD, stating that the activities of the trust were not found to be in accordance with its stated objects as per the trust deed. 4. Aggrieved by the order of Ld. CIT(E) , the assessee has filed the present appeal before the Tribunal. The learned Authorised Representative (“Ld. AR”) submitted that the assessee trust is engaged in charitable activities as per its object clause, which includes providing financial assistance to poor students and medical assistance to needy persons. Our attention was drawn to Clause 3 of the trust deed (placed at Page No. 3 of the paper book), which clearly enumerates the charitable objects of the trust. ITA Nos.733 & 734/Hyd/2025 4 5. Further, in support of the genuineness of the activities, the Ld. AR invited our attention to the submissions filed before the Ld. CIT(E) along with the acknowledgments of such filings, placed at page nos. 82 to 92 of the paper book. It was submitted that the assessee furnished details of donations received during the financial years 2021–22, 2022–23, and 2023–24 (placed at page nos. 66 to 68 of the paper book), as well as the list of donations made to various persons for medical aid and educational assistance (placed at page nos. 69 to 71 of the paper book). The Ld. AR argued that the Ld. CIT(E) failed to consider the aforesaid submissions and supporting documents and passed a non-speaking order without identifying any specific defect or inconsistency in the activities of the trust. It was submitted that the rejection was mechanical and devoid of any reasoning. The Ld. AR prayed for restoration of the matter to the file of the Ld. CIT(E) for fresh adjudication on merits, after granting an opportunity of being heard. 6. Per contra, the Learned Departmental Representative (“Ld. DR”) relied on the findings of the Ld. CIT(E) as contained in the impugned order. However, the Ld. DR fairly accepted that the order ITA Nos.733 & 734/Hyd/2025 5 of the Ld. CIT(E) does not adequately deal with the detailed submissions and evidences filed by the assessee and lacks proper reasoning. 7. We have heard the rival submissions and perused the material available on record. We find that the assessee had filed its application in Form No. 10AB on 27.08.2024 seeking final registration under section 12AB of the Act. We have gone through Clause 3 of the trust deed placed at Page No. 3 of the paper book and found that the trust’s charitable objectives include providing educational and medical aid to the underprivileged. We have also perused the documentary evidences filed by the assessee before the Ld. CIT(E), including (i) submission before the Ld. CIT(E) (Page Nos. 82 and 92 of the paper book), (ii) list of donations received by the assessee during F.Ys. 2021–22 to 2023–24 (Page Nos. 66 to 68 of the paper book), and (iii) list of donations given by the assessee during F.Ys 2021-22 to 2023-24 (Page Nos. 69 to 71 of the paper book), indicating the conduct of charitable activities. ITA Nos.733 & 734/Hyd/2025 6 8. We have also gone through para no.3 of the Annexure to Form No.10AD dated 13.02.2025, which is to the following effect : “ On perusal of the submissions made by the assessee, it is observed that activities are not commensurate with the activities as per objectives of the registered Deed / MOA / AOA, which is not as per the provisions of the section 12AB of the IT Act, 1961. In view of the above, the present application in form 10AB for registration u/s. 12AB is herewith rejected.” 9. On perusal of the above, we find that the Ld. CIT(E) has merely stated that the activities of the trust were not in line with its objectives, without recording any specific reasons or referring to any discrepancy in the evidences submitted by the assessee. The order does not deal with the documentary evidences submitted by the assessee and appears to have been passed without considering the same. In our considered view, the rejection of the application in such a summary and non-speaking manner amounts to denial of natural justice. The Ld. CIT(E) ought to have examined the documents submitted and given a clear finding supported by reasons before ITA Nos.733 & 734/Hyd/2025 7 concluding that the activities were not in accordance with the stated objects. Accordingly, we set aside the impugned order and restore the matter to the file of the Ld. CIT(E) for de novo adjudication. The Ld. CIT(E) shall consider all the submissions and evidences filed by the assessee and pass a reasoned and speaking order after granting due opportunity to the assessee to present its case and file any additional evidence in support of its claim. 10. In the result, the appeal of the assessee is allowed for statistical purposes. ITA No.734/Hyd/2025 11. The issues involved in this appeal is identical to the issues involved in the appeals in ITA Nos.733/Hyd/2025, wherein we have allowed the appeal of the assessee for statistical purposes. Therefore, our discussion and findings in ITA No.733/Hyd/2025 are mutatis mutandis applicable to this appeal also. As the appeal of the assessee in ITA No.733/Hyd/2025 has been allowed, this appeal is also allowed for statistical purposes. ITA Nos.733 & 734/Hyd/2025 8 12. To sum up, both the appeals filed by the assessee are allowed for statistical purposes. Order pronounced in the open Court on 18th July, 2025. Sd/- Sd/- (VIJAY PAL RAO) (MADHUSUDAN SAWDIA) VICE PRESIDENT ACCOUNTANT MEMBER Hyderabad, Dated: 18.07.2025. * Reddy gp Copy of the Order forwarded to : 1. M/s. Fehmicare Foundation, H.No.8-3-229/37, Tahir Villa, Yousufguda, Hyderabad-500 073 2. CIT (Exemptions), Hyderabad. 3. Pr.CIT, Hyderabad. 4. DR, ITAT, Hyderabad. 5. Guard file. BY ORDER, "