KULAPATHI BOOK TRUST,VISAKHAPATNAM V. INCOME TAX OFFICER (EXEMPTION WARD), VISAKHAPATNAM

ITA 110/VIZ/2025

AI Insights

M/s. Kulapathi Book Trust, Visakhapatnam, appealed against the decision of the Learned Commissioner of Income Tax (Exemptions), Hyderabad, which had rejected their application for approval under section 80G of the Income Tax Act, 1961. The Trust argued that they had complied with all requirements and provided complete details of their charitable activities, including documentary evidence and audited financial statements. However, the Ld. CIT(E) rejected the application without specific reasons, leading to the appeal. The Tribunal found the rejection to be arbitrary and lacking in reasoning, thus remanding the case for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 103656 (ITAT-VISAKHAPATNAM)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A. ARUNA
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice; Charitable institution

Judgement Text

" आयकर अपीलीय अधिकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM. (Through Virtual Hearing) BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER आ.अपी.सं /ITA No.110/Viz/2025 M/s. Kulapathi Book Trust, Visakhapatnam. PAN:AAATK3604Q Vs. Income Tax Officer (Exemption Ward), Visakhapatnam. (Appellant) (Respondent) निर्धारिती द्वधिध/Assessee by: Smt. A. Aruna, Advocate. िधजस् व द्वधिध/Revenue by:: Dr. Satyasai Rath, CIT-DR सुिवधई की तधिीख/Date of hearing: 27/03/2025 घोषणध की तधिीख/Pronouncement: /04/2025 आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M.: This appeal is filed by M/s. Kulapathi Book Trust, Visakhapatnam (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Exemptions), Hyderabad (“Ld. CIT(E)”), rejecting approval u/s.80G of the Income Tax Act, 1961 (“the Act”) vide order dated 13.12.2024. 2. The assessee has raised the following grounds : “ 1. The order of the Ld. CIT(E), Hyderabad is contrary to the facts and also the law applicable to the facts of the case. ITA No.110/Viz/2025 2 2. The Ld. CIT(E) is not justified in rejecting the application filed by appellant in Form No.10AB for Registration u/s.80G of the Act. 3. Any other ground that may be urged at the time of appeal hearing.” 3. The brief facts of the case are that, the assessee had applied for approval u/s.80G of the Act by filing Form no.10AB before the Ld. CIT(E). However, the Ld. CIT(E) rejected the application stating that the assessee had not carried out substantial activities of charitable nature. 4. Aggrieved with the order of Ld. CIT(E), the assessee is in appeal before us. The Learned Authorised Representative (“Ld. AR”) submitted that, the assessee had fully complied with all the requirements and had provided complete details of its charitable activities to the Ld. CIT(E) including documentary evidences supporting its charitable nature, audited financial statements reflecting the application of funds towards charitable purposes, etc. However, the Ld. CIT(E) rejected the application without providing any specific reason as to why the activities undertaken were not considered as charitable. The order is cryptic, non-speaking and arbitrary and the Ld. CIT(E) failed to pointout any specific deficiency in the documents filed or the activities carried out by the assessee. Finally, the Ld. AR prayed before the bench for setting aside the impugned order for remanding the matter back to ITA No.110/Viz/2025 3 the file of Ld. CIT(E) for fresh consideration after providing the assessee with a proper opportunity of being heard. 5. Per contra, the Learned Department Representative (“Ld. DR”) supported the order of Ld. CIT(E) and argued that the Ld. CIT(E) rightly rejected the application as the assessee failed to demonstrate substantial charitable activities. Finally, the Ld. DR prayed before the bench to reject the appeal of the assessee. 6. We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. We have gone through the paper book filed by the assessee and found that the assessee has filed all the documents in compliance to the notices issued by the Ld. CIT(E) including the details of charitable activities conducted by the assessee, audited financial statements reflecting the application of funds, etc. We have also gone through the order passed by the Ld. CIT(E) and found that the Ld. CIT(E) has not pointed out any specific deficiency neither in the documents filed by the assessee nor in the activity carried out by the assessee. We also found that the order passed by the Ld. CIT(E) is non-speaking and lacks any reasoning. In our considered opinion, the rejection of application for approval u/s.80G of the Act without assigning any specific reason is arbitrary and against the principle of natural justice. Accordingly, we hold that the Ld. CIT(E) has not ITA No.110/Viz/2025 4 properly appreciated the documents submitted by the assessee and has not given the assessee an opportunity of being heard. Therefore, in the interest of justice, we deem it appropriate to set aside the order of Ld. CIT(E) and remand the matter back to the file of Ld. CIT(E) for fresh adjudication. Needless to say, the Ld. CIT(E) should provide an appropriate opportunity of being heard to the assessee before deciding the issue. Accordingly, the appeal of the assessee is allowed for statistical purposes. 7. In the result, the appeal of assessee is allowed for statistical purposes. Order pronounced in the open Court on 15th April, 2025. Sd/- Sd/- (RAVISH SOOD) (MADHUSUDAN SAWDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad. Dated: 15 .04.2025. * Reddy gp Copy of the Order forwarded to : 1. M/s. Kulapathi Book Trust, 14-38-2, Radha Madhavam Muppidi Colony, Krishna Nagar, Vizag, A.P. 2. ITO(Exemption Ward), Visakhapatnam. 3. CIT(E)/Pr.CIT, Hyderabad. 4. DR, ITAT, Hyderabad. 5. Guard file. BY ORDER, "