HARDEO DASS NATMULL BAIROLIYA CHARITY TRUST,DARBHANGA V. THE PRINCIPAL CIT(EXEMPTION)PATNA, PATNA

ITA 618/PAT/2024

AI Insights

The case involves the Hardeo Dass Natmull Bairoliya Charity Trust, which appealed against the decisions of the Commissioner of Income Tax (Exemptions), Patna, denying them registration under sections 12A and 80G of the Income Tax Act, 1961. The primary contention was the rejection of their application for regular registration under section 12A(1)(ac)(iii), which was based on the trust's alleged insufficient charitable activities, evidenced by a single donation to the Chief Minister's relief fund. The Tribunal noted that the trust had commenced charitable activities immediately after receiving provisional registration and had not been allowed to substantiate this with necessary documents before the CIT(E).

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 37409 (ITAT-PATNA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2024-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 12A; 80G

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “PATNA” BENCH PATNA (VIRTUAL HEARING AT KOLKTA) SHRI DUVVURU RL REDDY, VICE PRESIDENT SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER ITA Nos. 617 & 618/Pat/2024 (Assessment Year 2024-25) Hardeo Dass Natmull Bairoliya Charity Trust, Vijay Kumar Bairoliya Marwari School Road, Masraf Bazar, Darbhanga (Bihar) - 846004 [PAN: AAATH6373D] ….................................. Appellant vs. The Principal CIT (Exemption), Patna, CR Building ITO I P Estate, New Delhi - 110002 ................................ Respondent Appearances by: Assessee represented by : Shri Sushil Kr. Pransukha, FCA Department represented by : Shri Ashwani Kr. Singal, JCIT Date of concluding the hearing : 19.03.2025 Date of pronouncing the order : 04.04.2025 O R D E R PER SANJAY AWASTHI, ACCOUNTANT MEMBER: 1. These appeals arise from order u/s 12AB and 80G of the Income Tax Act, 1961 (hereafter “the Act”), dated 20.09.2024 and 23.09.2024 respectively, passed by the Ld. Commissioner of Income Tax (Exemptions), Patna (hereafter “the Ld. CIT(E). In ITA No. 617/Kol/2024, the assessee filed an application under Form 10AB for grant of regular registration u/s 12A(1)(ac)(iii) of the Act. The Ld. CIT(E) found that even though the appellant trust was in existence since 1944, it had, allegedly, only one charitable activity, of a donation of Rs. 1,01,000/- to the CM’s relief fund (dated 17.04.2020). This fact, allegedly, militated against the claim that the trust was regularly carrying out charitable activities. Needless to say, the 2 ITA No. 617 & 618/Pat/2024 Hardeo Dass Natmull Bairoliya Charity Trust registration was denied. In ITA No. 618/Kol/2024, registration u/s 80G of the Act was denied since registration u/s 12A(1)(ac)(iii) was already rejected. Since these matters are interconnected, they are being dealt with together. 1.1 The appellant has filed the present appeals ventilating its grievances through the following grounds of appeals: ITA No. 617/Kol/2024 1.For that, the Ld CIT exemption erred in rejecting the application for regular registration made u/s 12A(1)(ac)(iii) arbitrarily by not accepting the donation to chief minister relief fund as genuine charitable activity. 2. For that Ld CIT Exemption erred in holding that maiden transaction of donation to Chief minister relief fund can not be considered as carrying of charitable activities in accordance with the object of trust. 3. For that Ld CIT exemption failed to appreciate the provision of section 12A(1)(ac) (iii) and time line mentioned there that a provisionally registered trust must apply for regular registration within six months of commencement of charitable activity where as in this case trust had already commenced the charitable activity on 17.4.20 by making donation to chief minister relief fund and as such this trust was required to make application for regular registration soon after getting provisional registration 4. For that Ld CIT Exemption failed to appreciate that insufficiency of charitable activity can not be ground for rejecting the application 5. For that Ld CIT Exemption failed to appreciate that he had himself granted provisional registration for three years AY's 24-25,25-26,26-27 where appellant trust has further carried out charitable activity in AY 24-25 after receipt of provisional registration. 6. For that Ld CIT Exemption erred further in cancelling the provisional registration and specially AY 24-25 retrospectively. 7. For that Ld CIT Exemption failed to appreciate that he could have got ample opportunity to examine the genuineness of activity during scrutiny and other proceedings rather than rejecting the application and can celling provisional registration at the threshold. 8. Appellant crave leave to add, delete, modify any other grounds at or before the hearing.” ITA No. 618/Kol/2024 “1. For that, the Ld CIT exemption erred in rejecting the application for regular registration made u/s 80G(5)(iii) on the ground of rejection of its provisional registration granted u/s 12AB 3 ITA No. 617 & 618/Pat/2024 Hardeo Dass Natmull Bairoliya Charity Trust 2. For that Ld CIT Exemption erred in holding that maiden transaction of donation to Chief minister relief fund can not be considered as carrying of charitable activities in accordance with the object of trust. 3. For that Ld CIT Exemption failed to appreciate that insufficiency of charitable activity can not be ground for rejecting the application 4. For that Ld CIT Exemption failed to appreciate that he had himself granted provisional registration for three years AY's 24-25,25-26,26-27 where appellant trust has further carried out charitable activity in AY 24-25 after receipt of provisional registration. 5. For that Ld CIT Exemption erred further in cancelling the provisional registration and specially AY 24-25 retrospectively. 6. For that Ld CIT Exemption failed to appreciate that he could have got ample opportunity to examine the genuineness of activity during scrutiny and other proceedings rather than rejecting the application and can celling provisional registration at the threshold.” 2. Before us the Ld. AR argued that the trust had decided to undertake charitable activity and thus had sought registration u/s 12A and 80G of the Act. The Ld. AR stated that such registration was sought only when the trustees decided to undertake charitable activities. The Ld. AR assailed the action of Ld. CIT(E) and stated that denial of such registration at the initial stage itself would preclude the trust from performing charitable activities altogether. The Ld. AR pointed out that as soon as provisional registration was received, the trust started to carry out charitable activities. The Ld. AR took us through page 30 of the paper book which depicts an income/expenditure statement as on 31.03.2024. Admittedly, there are a few charitable activities mentioned therein. However, the Ld. AR pointed out that those and other supporting documents, were not before the Ld. CIT(E). In conclusion it was mentioned that ever since the grant of provisional registration, the trust was carrying out charitable activities, hence it deserved registration u/s 12A and 80G of the Act. 2.1 The Ld. DR relied on the impugned order. 3. We have carefully considered the rival submissions and also gone through the documents before us. It is seen that the appellant trust could not place relevant documents before the Ld. CIT(E) to prove the bonafides of its charitable activities. Accordingly, we set aside the impugned order 4 ITA No. 617 & 618/Pat/2024 Hardeo Dass Natmull Bairoliya Charity Trust and remand both these matters to the file of Ld. CIT(E) for considering the merit in appellant’s claim about charitable activities undertaken since grant of provisional registration. The matter pertaining to section 80G of the Act, also needs to be considered in light of the decision for application under section 12A of the Act. 4. In the result, both the appeals filed by the assessee are allowed for statistical purposes. Order pronounced on 04.04.2025 Sd/- Sd/- (Duvvuru RL Reddy) (Sanjay Awasthi) Vice President Accountant Member Dated: 04.04.2025 AK, P.S. Copy of the order forwarded to: 1. Hardeo Dass Natmull Bairoliya Charity Trust 2. The Principal CIT (Exemption), Patna 3. CIT(A)- 4. CIT- 5. CIT(DR) //True copy// By order Assistant Registrar, Kolkata Benches "