MALLARPUR NAISUVA,BIRBHUM V. CIT (EXEMPTION), , KOLKATA

ITA 764/KOL/2025

AI Insights

The case involves Mallarpur Naisuva, a trust, appealing against the decision of the CIT (Exemption), Kolkata, which denied them registration under section 80G(5)(iii) of the Income Tax Act, 1961. The CIT (Exemption) had rejected the application on the grounds that the trust's activities were commercial in nature and did not qualify as charitable. The Tribunal noted that the CIT (Exemption) had not considered the existing approval under section 12A when making their decision. The Tribunal found that the CIT (Exemption) had erred in not following the directions of the Tribunal in previous similar cases and in not considering the materials submitted by the trust.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 783170 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2023-2024
• Appeal Filed On: 11-04-2025
• Other Referred Cases: Bishnupur Public Education Institute vs. CIT (Exemption)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Set aside; Opportunity of being heard; Charitable institution
• Section: 12A; 80G

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘C’ BENCH, KOLKATA Before SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER I.T.A. No.: 764/KOL/2025 Assessment Year: 2023-24 Mallarpur Naisuva Vs. CIT (Exemption), Kolkata (Appellant) (Respondent) PAN: AABTM6211E Appearances: Assessee represented by : Soumitra Choudhry, AR. Department represented by : Praveen Kishore, CIT (DR). Date of concluding the hearing : 12-August-2025 Date of pronouncing the order : 06-November-2025 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of the Ld. Commissioner of Income Tax (Exemption)-Kolkata [hereinafter referred to as the ‘Ld. CIT (Exemption)/CIT(E)’] passed in respect of registration u/s 80G(5)(iii) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 13.02.2025. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal: “1. For that on the facts of the case, the order of the Ld. CIT (Exemptions), Kolkata on 13.02.2025 refusing grant approval u/s. 80G(5)(iii) the charitable purpose in so far as it is against the appellant, is opposed to law, equity, weight of evidence, probabilities facts and circumstances of the case. Printed from counselvise.com Page | 2 I.T.A. No.: 764/KOL/2025 Assessment Year: 2023-24 Mallarpur Naisuva. 2. For that on the facts of the case, the Ld. Commissioner of Income Tax (Exemptions), Kolkata has passed the order there by rejecting of exemption u/s. 80G(5) of the I.T. Act without following the proper direction of Ld. ITAT, Kolkata dt. 23.04.2024 which is completely arbitrary, unjustified, and illegal. 3. For that on the facts of the case, the Ld. Commissioner of Income Tax (Exemption), Kolkata has not considered the fact that the assessee is purely Trust runs Education for the tribal student, relief of the poor people, charitable medical centre, financial literacy, financial inclusion, consumer awareness etc therefore, the order of the CIT (Exemptions), Kolkata is completely arbitrary, unjustified, and illegal. 4. For that on the facts of the case, the Ld. CIT (Exemptions) is not justified in refusing application in Form 10AB, on the ground that a) the activities identified are commercial in nature and not related to any charitable purpose, b) the society does not fulfil the eligibility criteria for approval u/s. 80G c) the activities being carried out by the society are not in line with the definition of charitable purpose as laid down under the Income Tax Act. Although they are self-evident and manifest and having regard to the genuineness of the objects and the activities of the trust the State Government itself in its wisdom enacted the provisions, the accounts are all audited and therefore, the finding of the Ld. CIT Exemptions) is perverse and contrary to record in as much as the appellant has filed all the relevant details before him to satisfy about the genuineness of the objects and the Ld. CIT (Exemptions) has overlooked the self-evident and facts that the appellant is relief of the poor people, charitable medical centre, Education for the tribal student, financial literacy, financial inclusion, consumer awareness etc, as recognized by the act carrying on certain charitable activities and consequently, is entitled to registration under section 80G(5) of the act, notwithstanding there is no formal deed of trust. 5. The Ld. CIT (Exemptions), Kolkata ought to have appreciated that the appellant came into existence long before the enactment of Income Tax Act and the objects of appellant trust have been pleaded before him and the same is undoubtedly charitable in nature, therefore, the Ld. CIT, Kolkata is not justified in rejecting the application for approval u/s. 80G(5) of the act on the most unsustainable ground that the appellant has not complied with the prescribed conditions and without making proper entry in the accounts. Printed from counselvise.com Page | 3 I.T.A. No.: 764/KOL/2025 Assessment Year: 2023-24 Mallarpur Naisuva. 6. For that the appellant reserves the right to adduce any further ground or grounds, if necessary, at or before the hearing of the appeal.” 3. Brief facts of the case are that the assessee is a trust registered as a charitable institution since 2021. The assessee applied for registration under section 80G(5)(iii) of the Act which was rejected by the Ld. CIT (Exemption) vide order dated 16.01.2024, citing the reason that the activities of the applicant/assessee had already commenced and the present application filed in Form No. 10AB u/s 80G(5)(iii) of the Act had not been filed within the time limit prescribed therein and, therefore, the same was liable to be rejected as such as non-maintainable, without going into the merits. Reliance was also placed on the decision of the Hon'ble Kolkata Tribunal in the case of Bishnupur Public Education Institute, reported in 139 taxmann.com 121, wherein the Hon'ble Tribunal, while adjudicating the issue of similar provisions of due date u/s 10(23C) of the Act, dismissed the appeal of the assessee. The Ld. CIT (Exemption) has also mentioned the CBDT Circular No. 6 of 2023 which does not extend the benefit of extension of due date to 30.09.2023 to cases u/s 80G(5) of the Act. The Ld. CIT (Exemption) also cancelled the provisional registration u/s 80G(5)(iv) of the Act granted to the assessee. Aggrieved with the order of the Ld. CIT(E), the assessee has filed the appeal before the Tribunal. 4. Rival submissions were heard and the record and the submissions made have been examined. The Ld. AR brought to our notice that the application filed u/s 12A was rejected vide order dated 09.01.2024 and that filed for approval u/s 80G(5)(iii) of the Act dated 02.07.2023 was also rejected vide order dated 16.01.2024. The assessee filed an appeal against the rejection of the approval u/s 12A before the Tribunal which Printed from counselvise.com Page | 4 I.T.A. No.: 764/KOL/2025 Assessment Year: 2023-24 Mallarpur Naisuva. set aside the order of the Ld. CIT (Exemption) vide order in ITA No. 164/KOL/2024 dated 23.04.2024 and remanded the issue to the file of the Ld. CIT (Exemption) for readjudication of the application of the assessee on merit after the assessee submits necessary material in support of the application. The assessee is an old trust and the approval u/s 12A was already granted for 5 years and, therefore, vide order dated 04.04.2025 of the Ld. CIT(E) the application filed by the assessee was treated as cancelled/dropped and no adverse inference was drawn against the assessee. The application was incorrectly filed in the status of a new assessee instead of in the status of an old assessee. The assessee contends that the appeal against the rejection of approval u/s 80G was also allowed and the issue was also set aside to the Ld. CIT(E) vide order in ITA No. 165/KOL/2024 dated 23.04.2024. It filed the reply in response to the notice issued for giving effect to the order of the Tribunal, but without considering the fact that the assessee was granted approval under section 12A of the Act up to the assessment year 2026-27, the application for approval under section 80G of the Act was rejected in the set aside proceedings on the ground that the activities being carried out by the assessee were commercial in nature and do not qualify as charitable activities. The activities were found to be inherently commercial in nature and were not treated to be for charitable purpose. However, the approval granted under section 12A of the Act was not cancelled. It was submitted that the application filed u/s 80G of the Act has been rejected which was set aside before the same authority for deciding afresh and while approval under section 12A of the Act was existing, the approval under section 80G of the Act has been rejected on the ground that the activities are not charitable in Printed from counselvise.com Page | 5 I.T.A. No.: 764/KOL/2025 Assessment Year: 2023-24 Mallarpur Naisuva. nature, even though the facts are similar. The Ld. DR relied upon the order of the Ld. CIT(E) and requested that the same may be upheld. 5. We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT (Exemption). The Bench was of the view after hearing the Ld. AR that the Ld. CIT(Exemption) had rejected the application u/s 80G(5)(iii) of the Act under the presumption that the activities were not charitable in nature without considering that the approval under section 12A of the Act was granted to the assessee and the same was not cancelled. In fact, the assessee was an old trust and had filed the application for approval under the wrong clause. Therefore, in the interest of justice, it was considered imperative that the order of the Ld. CIT (Exemption) may be set aside once again and the matter may be remanded to him to decide the application for approval u/s 80G of the Act in accordance with law and in view of the decision arrived at in respect of the set aside proceedings relating to the approval u/s 12A/80G(5)(iii) of the Act as contrary decision cannot be taken once the trust has been held to be for charitable purpose and prima facie the claim of the assessee appears to be justified. Hence, the order of the Ld. CIT (Exemption) is hereby set aside and the matter is remanded to him for deciding the application afresh following the directions of the Tribunal in the order in ITA No. 165/KOL/2024 dated 23.04.2024 after granting an opportunity of being heard to the assessee and considering the reply which may be filed and thereafter, he shall pass a speaking order and grant approval under section 80G of the Act in accordance with law as the claim of the assessee, prima facie appears to be justified, since the approval Printed from counselvise.com Page | 6 I.T.A. No.: 764/KOL/2025 Assessment Year: 2023-24 Mallarpur Naisuva. under section 12A of the Act has not been cancelled. Hence, all the grounds of appeal are partly allowed for statistical purposes. 6. In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 6th November, 2025. Sd/- Sd/- [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 06.11.2025 Bidhan (Sr. P.S.) Printed from counselvise.com Page | 7 I.T.A. No.: 764/KOL/2025 Assessment Year: 2023-24 Mallarpur Naisuva. Copy of the order forwarded to: 1. Mallarpur Naisuva, Mallarpur, Birbhum, West Bengal, 731216. 2. CIT (Exemption), Kolkata. 3. CIT(A)- 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata Printed from counselvise.com "