M/S. SUBHIKSHA HINDI VIDHYALAYA,MAYILADUTHURAI V. CIT, EXMETIONS, CHENNAI

ITA 125/CHNY/2025

AI Insights

The case involves two appeals by Subhiksha Hindi Vidhyalaya against the orders of the Commissioner of Income Tax (Exemption), Chennai, which had rejected the trust's applications for registration under section 12A and approval under section 80G of the Income-tax Act, 1961. The CIT(E) had concluded that the trust was operating a private Hindi tuition center with a profit motive and without providing services at concessional rates to the underprivileged, which are prerequisites for the sought registrations. The tribunal found that the trust was not given adequate opportunity to present its case and thus remitted the matter back to the CIT(E) for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 360760 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2022-2023
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V. JUSTIN
• Assessee Lawyers: N.R.GOVINDARAJAN; C.A; N. RAJA GOPALAN; C.A
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice; Competent authority
• Section: 12A; 80G

Judgement Text

"आयकर अपीलीय अिधकरण, ‘सी’ \u0011ा यपीठ, चे\u0016ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI \u0019ी जॉज जॉज क े, उपा एवं \u0019ी जगदीश, लेखा सद' क े सम BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENT AND SHRI JAGADISH, ACCOUNTANT MEMBER आयकर अपील सं./ITA Nos.125 & 126/Chny/2025 िनधा रण वष /Assessment Years: 2022-23 Subhiksha Hindi Vidhyalaya, 14/15, Ramapura Agraharam Kuthalam Mayiladuthurai, Chennai-609 801. Vs. The Commissioner of Income Tax (Exemption), Chennai. [PAN: ABCTS 6955K] (अपीलाथ\u0007/Appellant) (\b यथ\u0007/Respondent) अपीला थG की ओर से/ Appellant by : Shri N.R.Govindarajan, C.A & Shri N. Raja Gopalan, C.A IJथG की ओर से /Respondent by : Shri V. Justin, CIT सुनवा ई की ता रीख/Date of Hearing : 06.05.2025 घोषणा की ता रीख /Date of Pronouncement : 21.05.2025 आदेश / O R D E R PER JAGADISH, A.M : Aforesaid two appeals filed by the assessee for Assessment Years (AYs) 2022-23 arises out of the orders of Learned Commissioner of Income Tax (Exemption), Chennai [hereinafter “CIT(E)”] dated 19.11.2024. ITA Nos.125 & 126/Chny/2025 :- 2 -: ITA No.125/Chny/2025: 2. The assessee has filed application in Form-10AB seeking registration u/s. 12A(1)(ac)(iii) of the Income-tax Act, 1961 (hereinafter “the Act. The Ld. CIT(E) has rejected the application concluding that the Trust is actually engaged in running a private Hindi tuition center without approval from any competent authority and is operating in a commercial manner with a profit motive. The Ld. CIT(E) also noted that the assessee failed to furnish documentary evidence proving that the services are being provided free of cost or at concessional rates to the underprivileged and downtrodden, especially in villages and the Trust failed to demonstrate that the fees charged were nominal when compared to prevailing market rates. The Ld. CIT(E) also recorded that the assessee failed to respond to the specific query regarding the nature of income raised in the show cause notice dated 30.10.2024. 3. The Ld. Authorized Representative (A.R) of the assessee has submitted that the assessee’s trust is engaged in the promotion of Hindi/General education of the socially and economically downtrodden people especially in the villages and to help the unemployed youth in all possible ways and therefore, the activities falls under the education. The Ld. AR has further submitted that Ld. CIT(E) was not correct in observing that there is no charitable spending, ignoring the fact that ITA Nos.125 & 126/Chny/2025 :- 3 -: the assessee has paid Rs.5,68,975/- to various teachers shown under the head honorarium out of total receipts of Rs. 8,10,153/- . The Ld AR has submitted that the Ld. CIT(E) has not gone through the accounts and activities of the trust and requested one more opportunity be granted to prove its case. 4. On the other hand, the Ld. Departmental Representative (DR), has relied on the orders of lower authorities. 5. We have heard the rival submissions, and perused the materials available on record. The Ld. CIT(E) has held that the Trust has failed to prove with documentary evidences that services are offered at free of cost or concessional rate underprivileged / downtrodden people especially in the villages and also failed to prove that fee charged by it are very nominal. The Ld. AR has submitted that proper opportunity was not provided by the Ld. CIT(E) therefore, one more opportunity be provided to substantiate its claim. In the interest of justice and considering the principles of natural justice, we are of the opinion that the assessee deserves another opportunity to present its case before the Ld. CIT(E). Accordingly, we set aside the order passed by the Ld. CIT(E) and remit the matter to his file to decide the application afresh, after providing due opportunity of being heard to the assessee in ITA Nos.125 & 126/Chny/2025 :- 4 -: accordance with law. The assessee is also directed to cooperate with the proceedings and appear before the Ld. CIT(E) on the date of hearing without fail. In view of the above, the appeal filed by the assessee is allowed for statistical purposes only. ITA No.126/Chny/2025: 6. The Ld. CIT(E) has rejected the application filed by the assessee in form 10AB seeking approval u/s. 80G of the Act following the same reasons as in the order rejecting registration u/s. 12A of the Act. Since, the submissions made by the Ld. AR are identical to those in the above appeal, we restore this matter also to the file of the Ld. CIT(E) for fresh consideration in line with the directions given in the above appeal. 7. In the result, both the appeals filed by the assessee are allowed for statistical purposes. Order pronounced on 21st May, 2025. Sd/- Sd/- (जॉज जॉज क े) (George George K) उपा / Vice President (जगदीश) (Jagadish) लेखा लेखा लेखा लेखा सद\u0011य सद\u0011य सद\u0011य सद\u0011य /Accountant Member चे\u0013नई/Chennai, \u0016दनांक/Dated: 21st May, 2025. EDN/- ITA Nos.125 & 126/Chny/2025 :- 5 -: आदेश क\u0019 \bितिल प अ े षत/Copy to: 1. अपीलाथ\u0007/Appellant 2. \b थ\u0007/Respondent 3. आयकर आयु\u000f/CIT, Chennai 4. िवभागीय \bितिनिध/DR 5. गाड\u0018 फाईल/GF "