KALPATHRU LIONS CHARITABLE TRUST R,TURUVEKERE V. CIT(EXEMPTIONS), BANGALORE

ITA 2204/BANG/2024

AI Insights

The case involves two appeals by Kalpathru Lions Charitable Trust R against the orders of the PCIT (Exemptions), which denied the trust's applications for registration under sections 12AA and 80G of the Income Tax Act, 1961. The trust argued that the building constructed was intended for use as a hospital for the poor, which aligned with its charitable objectives. However, the PCIT (Exemptions) rejected the applications citing insufficient documentation and misalignment of expenditures with the trust's stated objectives. The tribunal found that the trust was not given adequate opportunity to present its case, leading to the decision to restore the matter for fresh examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 34301 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL KUMAR AGARWALA
• Assessee Lawyers: RAJAN T.S.
• Keywords: Principle of natural justice; Charitable institution
• Section: 12AA; 12A; 80G

Judgement Text

"ITA Nos.2204 & 2205/Bang/2024 Kalpathru Lions Charitable Trust R., Tumkur IN THE INCOME TAX APPELLATE TRIBUNAL “C’’ BENCH: BANGALORE BEFORE SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER AND SHRI PRAKASH CHAND YADAV, JUDICIAL MEMBER ITA Nos.2204 & 2205/Bang/2024 Assessment Years: 2025-26 & 2025-26 respectively Kalpathru Lions Charitable Trust R TV Umamahesh Bharath Tours & Travels Turuvekere at Town Turuvekere Taluk Tumkur Karnataka 572 227 PAN NO : AACTS7624Q Vs. CIT(Exemptions) Bangalore APPELLANT RESPONDENT Appellant by : Sri Rajan T.S., A.R. Respondent by : Sri Sunil Kumar Agarwala, D.R. Date of Hearing : 23.12.2024 Date of Pronouncement : 06.01.2025 O R D E R PER BENCH: Two appeals filed by assessee are decided by this consolidated order since facts are analogous in both appeals. One appeal is u/s 12AA of the Income Tax Act, 1961 (in short “The Act”) and one appeal is in respect of denial u/s 80G of the Act. Both these appeals are arising out of order of ld. PCIT (Exemptions) dated 18.12.2024 and 19.11.2024, respectively and relates to assessment year 2025-26. Facts of the Case 2. Brief facts as coming out from the order of the authorities below are that the assessee is a trust set up on 25.1.2018. The main object of the Trust was to provide medical help to the poor and needy in Turuvekere Hobli District Tumkur and its surrounding villages. The assessee trust has filed an application before the PCIT (Exemptions) in ITA Nos.2204 & 2205/Bang/2024 Kalpathru Lions Charitable Trust R., Tumkur Page 2 of 4 Form 10A dated 29.5.2018 and sought registration u/s 12AA & 80G of the Act. Thereafter, the assessee has filed fresh application before the PCIT (Exemptions) on 30.9.2021 for the reason that Taxation and Other Law Amendment Act, 2020 has come into operation which provides that all the application filed before the arrival of Corona would be treated as infructuous and all the assessees have to file fresh applications in form 10A. The application filed by the assessee dated 30.9.2021 has been rejected by the Commissioner on the ground that the assessee trust has moved the application beyond the time limit specified u/s 12A1AC(iii) of the Act. However, the CBDT vide its circular dated 23.4.2024 extended the time limit for filing the applications in form 10A/10AB up to 30.6.2024 and therefore, the assessee again filed the applications in form 10A & 10G on 23.4.2024, seeking registration u/s 12A & 80G of the Act. The present proceedings are emanated from these two applications dated 23.4.2024. The ld. CIT while rejecting the applications filed by the assessee has observed that the assessee failed to submit the requisite documents for justifying the registration u/s 12A of the Act. With respect to the application u/s 80G of the Act, the PCIT (Exemptions) observed that the assessee has spent major amount towards the construction of building, which in view of the PCIT (Exemptions) was not in accordance with the object of the Trust. 3. Aggrieved with the order of ld. PCIT(Exemptions), the assessee has come up in appeal before us. Counsel for the assessee contended two things:- a) The assessee has not been granted sufficient opportunity b) The assessee has spent money in construction of the building, which is to be used for the purpose of hospital. 3.1 When the bench asked the ld. Counsel for the assessee as to whether the assessee has filed requisite documents to show that the ITA Nos.2204 & 2205/Bang/2024 Kalpathru Lions Charitable Trust R., Tumkur Page 3 of 4 building in question was to be used for the purpose of hospital and that too for the poor people, counsel for the assessee drawn the attention of the bench towards some documents, which are in vernacular language and counsel for the assessee contended that the building plan has been sanctioned by the municipality for the purpose of hospital only. However, he showed his inability to show the translated documents before use. 4. The ld. D.R. appearing on behalf of the revenue contended that the matter may kindly be restored to the file of ld PCIT(Exemptions) for examining afresh. 5 After considering the rival submissions, we observe that in this case, the ld. PCIT (Exemptions) has issued the notice of hearing to the present assessee on 18.9.2024 and has given only 2 days’ time to file the reply and thereafter, no opportunity has been granted to the assessee and the ld. PCIT(Exemptions) has passed the order, which in our view is not the compliance of Principle of Natural Justice. Therefore, in the interest of justice, we restore these matters to the file of ld. PCIT(Exemptions) for examining afresh in accordance with law. However, we direct the ld. PCIT(Exemptions) the following aspects while dealing with the applications of the assessee: - a) What is the fee structure of the assessee trust with respect to the treatment, diagnosis and medicines for the poor and destitute persons of the society? b) Whether the assessee trust has made enough arrangements/provisions for the treatment of poor people in OPD as well as in emergency ward? c) The ld. PCIT will also issue direction to the assessee to display the rates to be charged from the poor people at concessional rate at ITA Nos.2204 & 2205/Bang/2024 Kalpathru Lions Charitable Trust R., Tumkur Page 4 of 4 the main gate of the hospital as well as appropriate places in the hospital. d) The ld. PCIT will also examine whether the municipality has sanctioned the plan of building to be used as charitable hospital for the poor and needy people of the village and nearby villages. 5.1 With these above directions, both these appeals are restored to the file of ld PCIT (Exemptions) for examining afresh. 6. In the result, both the appeals of the assessee are allowed for statistical purposes. Order pronounced in the open court on 06th Jan. 2025 Sd/- (Laxmi Prasad Sahu) Accountant Member Sd/- (Prakash Chand Yadav) Judicial Member Bangalore, Dated 6th Jan, 2025. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order Asst. Registrar, ITAT, Bangalore. "