PUNE KNOWLEDGE CLUSTER FOUNDATION ,PUNE V. CIT EXEMPTION, PUNE

ITA 521/PUN/2025

AI Insights

The case involves the Pune Knowledge Cluster Foundation, a non-profit entity, which appealed against the decision of the Commissioner of Income Tax (Exemption), Pune, rejecting their application for registration under Section 80G of the Income Tax Act, 1961. The rejection was primarily based on the grounds that the foundation had claimed deductions under Section 11 in the past, which was a condition under the unamended Section 80G(5)(iv)(B). However, this condition was removed by the Finance Act, 2024, prior to the CIT(E)'s decision. The Tribunal found that the CIT(E) had erred by not applying the amended law and thus set aside the CIT(E)'s order, remanding the case for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712761 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT BOBDE
• Assessee Lawyers: KISHOR B PHADKE
• Keywords: Charitable institution
• Section: 11; 12A; 12; 10; 80G

Judgement Text

" आयकर अपीलीय अिधकरण ”बी” Ɋायपीठ पुणेमŐ। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “B” :: PUNE BEFORE MS.ASTHA CHANDRA, JUDICIAL MEMBER AND DR.DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.521/PUN/2025 िनधाᭅरण वषᭅ / Assessment Year: - Pune Knowledge Cluster Foundation, IUCAA, University Campus, Ganeshkhind, Pune – 411007. Maharashtra. V s. The CIT –Exemption, Pune. PAN: AANCP0501D Appellant/ Assessee Respondent / Revenue Assessee by Shri Kishor B Phadke – AR Revenue by Shri Amit Bobde –CIT(DR) Date of hearing 19/06/2025 Date of pronouncement 30/07/2025 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This appeal is filed by the Assessee against the order of ld.Commissioner of Income Tax(Exemption), Pune rejecting the application under section 80G of the Income Tax Act, 1961, dated 09.01.2025. The assessee has raised following grounds of appeal : “1. The learned CIT (Exemption), Pune; erred in law and on facts in rejecting appellant's application for registration u/s 80G of ITA, 1961. Printed from counselvise.com ITA No.521/PUN/2025 [A] 2 2. The learned CIT (Exemption), Pune; ought to have appreciated that appellant's activities are genuine and bonafide, and as such, eligible for registration u/s 80G of ITA, 1961. 3. The learned CIT (Exemption) Pune erred in law and on facts in not granting registration u/s 80G of ITA, 1961 for non-fulfilment of the condition u/s 80G(5)(iv)(8) without appreciating that: 3.1. Appellant has not claimed any exemption u/s 11 as on the date of filing the application for 80G registration and impliedly appellant has satisfied the condition referred the said section. 3.2. Condition w.r.t claim of exemption u/s 11 or 12 in any previous year referred in 80G(5)(iv)(B) is removed vide Finance Act, 2024 (dated 22nd July) as on date of order Further, learned AO ought to have appreciated that appellant is eligible for filing application for registration u/s 80G only after getting approval of 12A registration on 10/06/2024. 4. The learned CIT(E) further erred in law and on facts by not dealing with the contentions of the appellant raised vide the reply to SCN in an appropriate manner. As such, the appellant contends that, the learned CIT(E) failed to pass a speaking order. 5. Appellant craves leave to add, alter, clarify, explain, modify, delete any or all of the grounds of appeal, and to seek any just and fair relief.” Submission of ld.AR : 2. Ld.AR for the Assessee filed written submission and paper book. Ld.AR submitted that ld.CIT(E) has erred in dismissing assessee’s application u/s.80G(5) of the Act, dated 09.07.2024. Ld.AR invited our attention to the fact that by Finance Bill, 2024, the provisions of Section 80G(5) have been amended. Ld.AR filed copy of the Memorandum explaining the Amendment. Printed from counselvise.com ITA No.521/PUN/2025 [A] 3 2.1 The written submission filed by Assessee is reproduce here as under : “1. Appellant is a non-profit entity incorporated as a Section 8 company under the Companies Act, 2013, on 05/07/2022, with the primary objective of promoting science, research, education, innovation, and awareness. The Appellant was granted registration u/s 12A of the Income-tax Act, 1961, on 10/06/2024. 2. A brief event chart of proceedings is as follows: Date Event 05/07/2022 Appellant registered as a Section 8 company under the Companies Act, 2013. 10/06/2024 Appellant received registration under Section 12A8(1)(b) of the Income-tax Act, 1961, via Form 10AD, valid for AY 2024-25 to AY 2028-29. 09/07/2024 Appellant filed an application for registration u/s 80G(S)(iv)(B) in Form 10AB. 02/09/2024 CIT (Exemptions) issued a detailed notice requesting various financial and operational details, directing compliance by 17/09/2024. 14/09/2024 In response to the notice dated 02/09/2024, the Appellant submitted all requisite documents and information to the satisfaction of the authorities. 01/10/2024 Amendment in section 80G(5)(iv)(B) by removal of words claim of exemption u/s 11 or 12 in any previous year. 01/10/2024 Appellant filed return of Income for AY 2024-25 by claiming exemption u/s 11 30/12/2024 30/12/2024 CIT (Exemptions) issued a notice, questioning the applicability of Section 80G(5)(iv)(B), citing financial statement discrepancies and fund transfers. 06/01/2025 Appellant filed a comprehensive reply, addressing each issue raised in the notice dated 30/12/2024, along with supporting documents. Brief details of the reply filed w.r.t eligibility for registration u/s 80G are as follows: - Conditions w.r.t whether any exemption u/s 11 or 12 is claimed is to be checked on the date of application for 12A/80G - Condition that the assessee should not have claimed exemption u/s 11 or 12 has been removed Vide the Finance Act, 2024 (No.2). While Printed from counselvise.com ITA No.521/PUN/2025 [A] 4 processing the 80G application, the law present as on date of submission ought to be applied. - Appellant is eligible for filing application for registration u/s 80G only after getting approval of 12A registration on 10/06/2024 09/01/2025 However, said application was rejected by the CIT (Exemptions), Pune vide order dated 09/01/2025 without considering all contentions of appellant. 3. It is the order passed on 09/01/2025 by the learned CIT, (Exemption), Pune which is subject matter of the present appeal.” Submission of ld.DR : 3. The ld.DR for the Revenue relied on the order of the ld.CIT(E). Findings & Analysis : 4. We have heard both the parties and perused the records. The Assessee is company registered u/s.8 of the Companies Act, 2013. Assessee filed copy of Memorandum of Association and Certificate of Incorporation which are at page no.1 to 35 of the paper book. 4.1 In this case, Assessee had filed an application in Form No.10AB under section 80G(5)B(iv) of the Act, on 09.07.2024. Admittedly, Assessee is registered u/s.12A vide order dated 10.06.2024. Copy of the Order u/s.12AB issued by ld.CIT(E)-Pune on 10.06.2024 granting registration is at page no.63 to 65 of the paper book. Printed from counselvise.com ITA No.521/PUN/2025 [A] 5 5. During the proceedings for Registration u/s.80G(5) of the Act, ld.CIT(E) called for certain details and Assessee filed reply on 06.01.2025. The ld.CIT(E) rejected the application of the assessee. The relevant paragraphs of the Order of the ld.CIT(E) i.e.6.1, 7 and 8 are reproduced here as under : “6.1 It can be thus seen that the provisions of said section applies to a case where activities of the trust or institution have 'commenced and no income or part thereof of the said trust or institution has been excluded from the total income on account of applicability of sub-clause (iv) or subclause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, or section 11 or section 12, for any previous year ending on or before the date of such application, at any time after the commencement of such activities.' In the light of said provision, the submission of the assessee trust has been verified. It is seen that the assessee trust has claimed deduction u/s 11 in its past AYs. For e.g. it has claimed deduction of Rs. 455.51 Lakhs u/s 11 in the A.Y.2024-25.. Thus, the assessee's income pertaining to previous years has been excluded from the total income on account of applicability of section 11 which occurs after the commencement of such activities. 7. Therefore, said provisions of sec.80G(5) (iv) (B) of the Act are not applicable in the assessee's case. Thus, the undersigned is not satisfied about the fulfillment of conditions laid down in the section 80G(5)(iv)(B) of the Act and hence, the undersigned is left with no alternative but to TAX DEPAR reject the application 8. Considering the above facts discussed in the show notice and discrepancies noticed, the undersigned is not satisfied about the genuineness of activities of the assessee and fulfilment of conditions laid down in clause (i) to (v) of section 80G(5) of the Act.” 5.1 Thus, ld.CIT(E) observed that Assessee had claimed deduction u/s.11 of the Act, for A.Y.2024-25. Hence, ld.CIT(E) concluded that “Provisions of Section 80G(5)(iv)(B) of the Act are not Printed from counselvise.com ITA No.521/PUN/2025 [A] 6 applicable in the assessee’s case”. Therefore, ld.CIT(E) rejected the application. 5.2 The Section 80G is reproduced as under :- 80G. (1) In computing the total income of an assessee, there shall be deducted, in accordance with and subject to the provisions of this section,— …………….. (2) The sums referred to in sub-section (1) shall be the following, namely :— …………………… (5) This section applies to donations to any institution or fund referred to in sub-clause (iv) of clause (a) of sub-section (2), only if it is established in India for a charitable purpose and if it fulfils the following conditions, namely :— (i) where the institution or fund derives any income, such income would not be liable to inclusion in its total income under the provisions of sections 11 and 12 or clause (23AA) or clause (23C) of section 10 : Provided that where an institution or fund derives any income, being profits and gains of business, the condition that such income would not be liable to inclusion in its total income under the provisions of section 11 shall not apply in relation to such income, if— (a) the institution or fund maintains separate books of account in respect of such business; (b) the donations made to the institution or fund are not used by it, directly or indirectly, for the purposes of such business; and (c) the institution or fund issues to a person making the donation a certificate to the effect that it maintains separate books of account in respect of such business and that the donations received by it will not be used, directly or indirectly, for the purposes of such business; ……………. [(iv) 8[***] where activities of the institution or fund have-- (A) not commenced, at least one month prior to the commencement of the previous year relevant to the assessment year from which the said approval is sought; (B) commenced9[***]at any time after the commencement of such activities:] Printed from counselvise.com ITA No.521/PUN/2025 [A] 7 5.2 Thus, the Section was amended by Finance Bill 2024. By the Amendment, the words“9. Words \"and where no income or part thereof of the said institution or fund has been excluded from the total income on account of applicability of sub-clause (iv) or sub- clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10 or section 11 or section 12 for any previous year ending on or before the date of such application.”have been omitted. 6. The order u/s.80G(5) was passed by ld.CIT(E) on 09.01.2025 when amended Section was on statute. Therefore, it was mandatory for ld.CIT(E) to consider the Amended Section as the Amendment was introduced to rationalise the timeline. Therefore, ld.CIT(E) has erred in rejecting the application filed by Assessee invoking Section 80G(5)(iv)(B) of the Act, whereas the particular section was amended, and was not on statute when order was passed. 7. We have perused the order of ld.CIT(E). Ld.CIT(E) has not doubted the activities carried out by the Assessee. It means, ld.CIT(E) was convinced that activity of the Assessee are charitable in nature. It is an admitted fact that Assessee is registered u/s.12AB Printed from counselvise.com ITA No.521/PUN/2025 [A] 8 of the Act. We have already noted that the application of the Assessee for approval u/s.80G(5) was rejected only on the technical ground, without considering the amendments. 8. In these facts and circumstances of the case, we set-aside the order u/s.80G(5) of the Act, to ld.CIT(E) for denovo adjudication. The ld.CIT(E) shall provide opportunity to the assessee to file all the details. Accordingly, Grounds of appeal raised by the Assessee are allowed for statistical purpose. 9. In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on 30 July, 2025. Sd/- Sd/- MS.ASTHA CHANDRA Dr.DIPAK P. RIPOTE JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 30 July, 2025/ SGR आदेशकᳱᮧितिलिपअᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीयᮧितिनिध, आयकर अपीलीय अिधकरण, “बी” बᱶच, पुणे / DR, ITAT, “B” Bench, Pune. 6. गाडᭅफ़ाइल / Guard File. Printed from counselvise.com ITA No.521/PUN/2025 [A] 9 आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune. Printed from counselvise.com "