KALA DIKSHA,CHENNAI V. CIT, EXMEPTIONS, CHENNAI

ITA 2241/CHNY/2025

AI Insights

The case involves M/s. Kala Diksha, a public charitable trust established in 1998, which focuses on the advancement of Bharatanatyam dance. The trust sought registration under section 12AB of the Income Tax Act, 1961, but was denied by the CIT(E) on grounds that teaching Bharatanatyam for a fee does not qualify as 'education' under section 2(15) of the Act, and the trust's activities exceeded the permissible threshold for 'advancement of any other object of general public utility'. The trust appealed this decision, referencing a similar case (Kalasadhanalaya vs. CIT(E)), which led to the ITAT's decision to remit the matter back to the CIT(E) for reconsideration.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 785415 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 11-08-2025
• Other Referred Cases: Kalasadhanalaya vs. CIT(E) in ITA No.3056/Chny/2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: BALASUBRAMANIAN
• Keywords: Charitable institution
• Section: 12AA; 12A; 80G

Judgement Text

"आयकर अपीलȣय अͬधकरण,‘बी’ Ûयायपीठ, चेÛनई IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI Įी जॉज[ जॉज[ क े, उपाÚय¢ एवं Įी जगदȣश, लेखा सदèय क े सम¢ BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENTAND SHRI JAGADISH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.: 2241/CHNY/2025 M/s. Kala Diksha, 48, Bhakthavatsalam Road, Mylapore, Chennai – 600 004. PAN: AAATK 1968K Vs. The Commissioner of Income Tax (Exemptions), Chennai. (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Shri Balasubramanian, Advocate ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri Shiva Srinivas, CIT सुनवाई कᳱ तारीख/Date of Hearing : 28.10.2025 घोषणा कᳱ तारीख/Date of Pronouncement : 29.10.2025 आदेश /O R D E R PER GEORGE GEORGE K, VICE PRESIDENT: This appeal filed by the assessee is directed against the order of Commissioner of Income Tax (Exemption), Chennai dated 24.06.2025, rejecting assessee’s application seeking registration under section 12AB of the Income Tax Act, 1961 (hereinafter the ‘Act’). Printed from counselvise.com - 2 - ITA No.2241/CHNY/2025 2. The grounds raised read as follows:- 1.1 Learned Commissioner of Income-tax (Exemption) erred in rejecting application filed by appellant in Form 10AB on 27-12-2024 for registration under sec. 12AB 1.2 Vide para 4.8 Learned CIT (E) erred in holding that propagating traditional Pandanallur style Bharatnatyam, a traditional fine arts, by appellant cannot be classified as \"education\" and that it is not a charitable activity. 1.3 The Trust having been formed as early as 14-9-1998 as a Public Charitable Trust for the advancement of Bharathanatyam under the name and style of KALA DIKSHA without reference to caste, creed, religion or sex and having got approval u/s 12AA on 24-9-1998 and renewed from time to time and again provisionally approved on 29-11-2022 for AYs 2021-22 to 2025-26, cannot be held to be not a charitable trust. 1.4 Learned Commissioner of Income-tax (Exemption) erred in invoking proviso to Sec.2(15) to the facts of appellant without properly looking into the primary objects of the Trust-vide Clause 7 of Trust Deed Dt.14-9-1998, as the appellant did not carry on any activity in the nature of trade, commerce or business. For the reasons stated above and those that may be adduced at the time of hearing Hon'ble ITAT be pleased to direct the CIT (E) to grant approval u/s 12AB to the appellant 3. Brief facts of the case are as follows: The assessee is a public charitable trust established on 14.09.1998. The main objective of the Trust is for the advancement of Bharatanatyam dance. The trust got registration u/s.12AA of the Act 24.09.1998 and same was renewed from time to time. The trust was given provisionally registered on 29.11.2022 for assessment years 2021-22 to 2025-26. Printed from counselvise.com - 3 - ITA No.2241/CHNY/2025 4. The assessee’s application dated 27.12.2024 in Form 10AB seeking registration u/s.12AB of the Act was rejected by CIT(E) vide impugned order dated 24.06.2025. The primary reason for refusing registration u/s.12AB of the Act was that teaching Bharatanatyam by collecting fees is not coming within the limb ‘education’ u/s.2(15) of the Act. The CIT(E) further held that even assuming the objects of the assessee trust are coming within advancement of any other general public utility, the receipt of said activities is in excess of threshold receipt of 20% of the total gross receipt. Therefore, CIT(E) concluded in light of proviso to section 2(15) of the Act, the assessee trust was not entitled to registration u/s.12AB of the Act. Accordingly, application of the assessee was rejected by CIT(E). 5. Aggrieved by the order of the CIT(E) rejecting application for registration u/s.12AB of the Act, assessee has filed the present appeal before the Tribunal. The Ld.AR submitted that the issue raised is squarely covered by the order of the Tribunal in the case of Kalasadhanalaya vs. CIT(E) in ITA No.3056/Chny/2024 (order dated 28.04.2025). It was submitted that the Tribunal had restored the matter to the CIT(E) for fresh consideration of claiming approval u/s.80G of the Act. It was further stated that the Tribunal in the case Printed from counselvise.com - 4 - ITA No.2241/CHNY/2025 was considering identical factual situation where the trust was running a school teaching Bharatanatyam, classical dance, etc. 6. The Ld.DR supported the order of the CIT(E). 7. We have heard rival submissions and perused the material on record. The Chennai Bench of the Tribunal in the case of Kalasadhanalaya vs. CIT(E) in ITA No.3056/CHNY/2024 (order dated 28.04.2025) had restored the issue of claim of 80G approval to the file of the CIT(E). In the said case, the assessee trust was teaching ancient traditional dance of Bharatanatyam to the students. The Tribunal after considering the various judicial pronouncement on the issue, restored the matter to the file of the CIT(E). The relevant finding of the Tribunal in the case of Kalasadhanalaya, supra, reads as follows:- “9. We have heard the rival contentions perused the material available on record and gone through the order of lower authorities along with the case laws relied on. It is an admitted fact that the trust exists from 15.07.1994 and has exemption under Section 12A of the Act along with the approval under Section 80G of the Act from inception. On perusal of the objects of the trust in Trust deed we find that the assessee is engaged in the promotion of an art and culture by educating the ancient / traditional dance culture to the students, which forms part of the education as per Section 2(15) of the Act. The relevant extract of the objects stated in the trust deed is given below: “To educate, promote and impart knowledge, practice and training in the school of arts, namely (1) Classical dance (2) Printed from counselvise.com - 5 - ITA No.2241/CHNY/2025 Bharatanatyam (3) Kuchipudi and (4) any other related studies in stage management, vocal music. Etc.” 10. Further, we find that the trust has spent the entire amount towards the expenditure related to the objects of the trust and hence there is no profit motive in the activities of the assessee. The receipts and expenditure of the trust have been captured in page nos.6 & 7 of the order of ld.CIT (E). 11. Further, the reliance on the judicial precedents by the ld.AR in support of the assessee’s objects are in the nature of public charitable activities which is squarely falls u/s.2(15) of the Act is to be considered to appreciate the activities of the assessee. 12. We note that the Hon’ble Supreme court in Sole Trustee, Loka Shikshana Trust (Supra) has held that “education” u/s.2(15) includes any systematic activity that imparts knowledge or skills to the public, beyond formal schooling. 13. Further, this tribunal in the case of The Mylapore Fine Arts Club cited supra, observed that the preservation of cultural importance dance and music eligible for charitable benefits. 14. Similarly in the case Sri Thiya Brahma Gana Sabha, cited supra, held that imparting education in dance and music is charitable in nature. 15. Further, in the case of Abhinayavani Nritya Niketan –ITAT Hyderabad Bench (supra) held that education of Kuchipudi comes under definition of charitable activities under Section 2(15) of Income Tax Act, 1961. 16. In light of the above factual matrix and discussion, we are of the considered view that the ld.CIT(E) has erred in rejecting the application for approval u/s.80G of the Act. In the present facts of the case and respectfully following the judicial precedents cited supra, we remit the issue back to the files of the ld.CIT(E) to consider the issue afresh. 17. In the result the appeal of the assessee is allowed for statistical purposes.” Printed from counselvise.com - 6 - ITA No.2241/CHNY/2025 8. In light of the aforesaid order of the Tribunal, which is identical to the facts of the instant case, we restore the matter to the file of the CIT(E) to consider the issue afresh. It is ordered accordingly. 9. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 29th October, 2025 at Chennai. Sd/- Sd/- (जगदȣश) (JAGADISH) लेखा सदèय/ACCOUNTANT MEMBER (जॉज[ जॉज[ क े) (GEORGE GEORGE K) उपाÚय¢ /VICE PRESIDENT चेÛनई/Chennai, Ǒदनांक/Dated, the 29th October, 2025 RSR आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy to: 1. अपीलाथȸ/Appellant 2. Ĥ×यथȸ/Respondent 3. आयकर आयुÈत /CIT, Chennai 4. ͪवभागीय ĤǓतǓनͬध/DR 5. गाड[ फाईल/GF. Printed from counselvise.com "