LIONS CLUB OF KHAMMAM CHARITABLE TRUST,KHAMMAM V. ITO(EXEMPTIONS), WARD-1(3), HYDERABAD

ITA 851/HYD/2025

AI Insights

The case involves the Lions Club of Khammam Charitable Trust, which appealed against the decision of the Commissioner of Income-Tax (Exemptions), Hyderabad, who rejected their application for permanent registration under Section 12AB of the Income-tax Act, 1961. The trust argued that the rejection was erroneous, violated principles of natural justice, and lacked specific details on which activities were deemed not commensurate with the trust's objectives. The tribunal found the CIT(Exemptions)'s order to be non-speaking and cryptic, lacking specific findings or material analysis to substantiate the rejection.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 716511 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: 2024-2025
• Appeal Filed On: 17-05-2025
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice; Charitable institution
• Section: 12A

Judgement Text

"आयकर अपीलीय न्यायाधिकरण में, हैदराबाद ‘बी’ बेंच, हैदराबाद IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad “B” Bench, Hyderabad श्री रवीश सूद, माननीय न्याययक सदस्य एवं श्री मिुसूदन सावडिया, माननीय लेखा सदस्य SHRI RAVISH SOOD, HON’BLE JUDICIAL MEMBER AND SHRI MADHUSUDAN SAWDIA, HON’BLE ACCOUNTANT MEMBER आयकरअपीलसं./I.T.A.No.851/Hyd/2025 (निर्धारण वर्ा/ Assessment Year: 2024-25) Lions Club of Khammam Charitable Trust, Khammam. PAN : AAATL9936C Vs. The Income Tax Officer, (Exemptions), Ward – 1(3), Hyderabad. (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) करदाता का प्रतततितित्व/ Assessee Represented by : Shri P. Vinod, Advocate. राजस्व का प्रतततितित्व/ Department Represented by : Dr. Narendra Kumar Naik, CIT(DR) सुिवाई समाप्त होिे की ततति/ Date of Conclusion of Hearing : 04.08.2025 घोर्णध की तधरीख/ Date of Pronouncement : 20.08.2025 O R D E R प्रनत रवीश सूद, जे.एम./PER RAVISH SOOD, J.M. The captioned appeal filed by the assessee trust is directed against the order passed by the Commissioner of Income-Tax Printed from counselvise.com 2 ITA No.851/Hyd/2025 Lions Club of Khammam Charitable Trust. (Exemption), [for short “CIT (Exemptions)”], Hyderabad, dated 19.03.2025, wherein the latter had declined the application filed by the assessee trust for permanent registration/approval u/s. 12AB of the Income-tax Act, 1961 (in short ‘the Act’). 2. The assessee trust has assailed the impugned order on the following grounds of appeal: 1. The order of the Ld. CIT(E) is erroneous both on facts and in law, is passed in gross violations of principles of natural justice. 2. The Ld. CIT(E) erred in not granting registration u/s. 12A of the Act on the alleged ground that the activities are not commensurate with the activities as per objectives of the registered deed/MOA/AOA, and that the same are not as per the provisions of Section 12A of the Act. 3. The Ld. CIT(E) erred in not mentioning which are the activities carried out by the Appellant are not commensurate with the activities as per objectives of registered deed/MOA/AOA and thereby erred in passing cryptic order rejecting the application filed under Form 10AB for seeking registration u/s. 12A of the Act. 4. Any other ground that may be urged at the time of hearing.” 3. Succinctly stated, the assessee trust was constituted by a trust deed dated 21.04.2012 with the aims and objects of relief to the poor, create and foster a spirit of understanding among the people to promote principles of good governance and good citizenship etc. 4. The assessee trust was granted provisional registration under Section 12A(1)(ac)(iii) of the Act in “Form 10AC”. Printed from counselvise.com 3 ITA No.851/Hyd/2025 Lions Club of Khammam Charitable Trust. Subsequently, the assessee trust applied for permanent registration u/s 12AB. 5. The CIT(Exemption), Hyderabad issued notices dated 03.12.2024 and 07.02.2025 seeking further details. In compliance, the assessee trust responded vide its reply dated 17.02.2025 (uploaded on 19.02.2025) and furnished the documents/information called for. 6. However, the CIT(Exemption), Hyderabad, vide the impugned order dated 19.03.2025 in “Form 10AD”, rejected the application for registration filed by the assessee trust under Section 12AB of the Act. The CIT(Exemption), though observed in his order that the assessee trust had furnished only partial information, but he failed to specify what particular information was not provided. It was though concluded that the activities carried out by the assessee trust were not commensurate with the objects of the trust, and hence, not in accordance with the requirements of Section 12AB of the Act, but there is no whisper in his order about any such activity of the assessee trust which was not commensurate with its objects. Printed from counselvise.com 4 ITA No.851/Hyd/2025 Lions Club of Khammam Charitable Trust. 7. We have heard the Ld. Authorized Representatives for both parties, perused the orders of the lower authorities and the material available on record. 8. We have thoughtfully considered the order passed by the CIT(Exemption) and are of the view that the impugned order is a non-speaking order. The CIT(Exemption) has not brought on record any finding or material analysis to substantiate how and in what manner the activities of the trust were not in accordance with the stated objectives. Nor has he articulated which information was missing, despite the assessee trust furnishing a detailed reply along with supporting documents. We are of a firm conviction that the rejection by the CIT(Exemption) of the application filed by the assessee trust for permanent registration without passing a reasoned order violates the principles of natural justice. It will be apposite to observe, that non-speaking, cryptic, and mechanical orders passed by quasi-judicial authorities are not sustainable in law. The CIT(Exemption), while disposing off the application filed by the assessee trust for permanent registration under Section 12AB of the Act was expected to provide a reasoned order and specific findings after considering the material on record. Printed from counselvise.com 5 ITA No.851/Hyd/2025 Lions Club of Khammam Charitable Trust. 9. In view of the above, the impugned order dated 19.03.2025 is hereby set aside, and the matter is restored to the file of the CIT(Exemption), Hyderabad with a direction to pass a fresh speaking and reasoned order in accordance with law. Needless to say, the assessee trust in the course of the set aside proceedings shall be afforded a reasonable opportunity of being heard and remain at liberty to submit any further documents or explanations as may be required. 10. In the result, the appeal filed by the assessee trust is allowed for statistical purposes in terms of our aforesaid observations. Order pronounced in the Open Court on 20th August, 2025. Sd/- (श्री मिुसूदन सावडिया) (MADHUSUDAN SAWDIA) लेखा सदस्य/ACCOUNTANT MEMBER Sd/- (श्री रवीश सूद) (RAVISH SOOD) न्यायिक सदस्य/JUDICIAL MEMBER Sd/- Hyderabad, dated 20.08.2025. *TYNM/sps Printed from counselvise.com 6 ITA No.851/Hyd/2025 Lions Club of Khammam Charitable Trust. आदेशकी प्रनतनलनप अग्रेनर्त/ Copy of the order forwarded to:- 1. निर्धाररती/The Assessee : M/s. Lions Club of Khammam Charitable Trust, D.No.9-11-45/2, Ground Floor, Kaman Bazar, Khammam. 2. रधजस्व/ The Revenue : The Income Tax Officer (Exemptions), Ward – 1(3), Hyderabad. 3. The Principal Commissioner of Income Tax (Exemptions), Hyderabad. 4. नवभधगीयप्रनतनिनर्, आयकर अपीलीय अनर्करण, / DR, ITAT, Hyderabad 5. गधर्ाफ़धईल / Guard file आदेशधिुसधर / BY ORDER Sr. Private Secretary ITAT, Hyderabad Printed from counselvise.com "