ROYAL DEEDS CHARITABLE TRUST,VIJAYAWADA V. COMMISSIONER OF INCOME TAX (EXEMPTION), HYDERABAD

ITA 522/VIZ/2024

AI Insights

The case involves Royal Deeds Charitable Trust, which appealed against the order of the Commissioner of Income Tax (Exemption), Hyderabad, rejecting their application for registration under Section 80G of the Income Tax Act, 1961. The Commissioner had initially issued notices requesting documentation and information to verify the Trust's eligibility for registration. After reviewing the submitted documents, the Commissioner concluded that the majority of the Trust's activities were commercial in nature, violating the provisions of Section 12AB and 80G of the Act. The Trust contested this decision, arguing that all required documents were submitted and that the Commissioner's decision was made without proper examination of these documents. The Tribunal found that the Commissioner had not adequately considered the Trust's submissions and directed a re-examination of the case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 46540 (ITAT-VISAKHAPATNAM)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2025
• 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
• Department Lawyers: SATYA SAI RATH
• Assessee Lawyers: MANASA MEENAKSHI DVN
• Keywords: Principle of natural justice; Charitable institution
• Section: 80G

Judgement Text

"आयकर अपीलीय अधिकरण, धिशाखापटणम पीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री क े नरधिम्हा चारी, न्याधयक िदस्य एिं श्री एि बालाक ृष्णन, लेखा िदस्य क े िमक्ष BEFORE SHRI K NARASIMHA CHARY, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER (Hybrid Hearing) आयकर अपील सं./ I.T.A. 522/Viz/2024 (ननधधारण वर्ा / Assessment Year :-- ) Royal Deeds Charitable Trust, Vijayawada. PAN:AAETR8247G Vs. Commissioner of Income Tax (Exemption), Hyderabad-500004. (अपीलधथी/ Appellant) (प्रत्यथी/ Respondent) अपीलधथी की ओर से/ Assessee by : Smt. Manasa Meenakshi DVN प्रत्यधथी की ओर से / Revenue by : Dr. Satyasai Rath, CIT-DR सुनवधई की तधरीख / Date of Hearing : 20/02/2025 घोर्णध की तधरीख/Date of Pronouncement : 07/03/2025 O R D E R PER S. BALAKRISHNAN, Accountant Member : This appeal filed by the assessee is against the order of the Learned Commissioner of Income Tax (Exemption), Hyderabad (“Ld.CIT(Exemption”) vide DIN & Order No. ITBA/EXM/F/EXM45/2024- 25/1069908814(1), dated 24/10/2024. 2. Briefly stated the facts of the case are that the assessee has filed an e-application in Form-10AB of the Act seeking registration U/s. 80G of the Income Tax Act, 1961 (“the Act”). Thereafter, notices dated 08/06/2024 and 16/08/2024 were issued to the assessee in respect of proceedings U/s. 80G(5)(iii) of the Act to produce the copy of Memorandum of Association / Trust Deed for verification and to furnish a detailed reply on the specific information called for in the said notice. In response to the same, the assessee has submitted the information. However, the Ld. CIT (Exemption) opined that the information submitted by the assessee is partial information only and therefore, another notice dated 01/10/2024 was issued to the assessee and sought for other information / details along with documentary evidence. On a perusal of the information submitted by the assessee, the Ld. CIT (Exemption) observed that „majority of the activities carried out by the Trust are commercial in nature which is in violation of the provisions of section 12AB and 80G of the Act”. Thus, the Ld. CIT (Exemption) considering the assessee’s non-submission of mandatory information, rejected the assesse’s application in Form-10AB for registration U/s. 80G of the Act vide order dated 24/10/2024. Aggrieved by the order of the Ld. CIT (Exemption), the assessee preferred the present appeal before the Tribunal by raising the following grounds of appeal: “1. For that the order of the CIT (Exemptions) passed U/s. 80G(5) is contrary to law, facts and circumstances of the case and is opposed to the principles of natural justice, equity and fair play. 2. For that the CIT (Exemptions) on facts and in law, erred in passing the order dated 24/10/2024 refusing the approval U/s. 80G(5) of the Act. 3. For that the CIT (Exemptions) failed to appreciate that the appellant is eligible for the approval U/s. 80G(5) of the Act. 4. For that the CIT (Exemptions) failed to appreciate that the appellant had satisfied all the conditions for approval U/s. 80G(5) of the Act.” 3. At the outset, the Ld. AR submitted that the Ld. CIT (Exemption) rejected the assessee’s application for registration U/s. 80G of the Act. The Ld. AR further submitted that the assessee has replied to the notices issued by filing all the documents required by the Ld. CIT(Exemption) for the purpose of granting registration which is evident from the paper book filed before the Ld. CIT (Exemption). However, the Ld. CIT (Exemption) has not examined the documents submitted and denied the assessee’s application for registration 80G of the Act. Therefore, the Ld. AR pleaded to remit the matter back to the file of the Ld. CIT (Exemptions) to decide the issue of assessee’s claim of registration U/s. 80G of the Act afresh. 4. On the other hand, the Ld. DR strongly relied on the order of the Ld. CIT (Exemption) and supported his decision. 5. We have heard both the sides and perused the material available on record as well as the orders of the Ld. Revenue Authorities. The Ld.CIT (Exemption) has rejected the assessee’s application for registration U/s. 80G of the Act. On a perusal of the order of the Ld. CIT (Exemption), we find that though in para-3 of the Ld. CIT (Exemption) order, it was mentioned that the activities carried on by the assessee- trust are commercial in nature, the Ld. CIT (Exemption) has not specified what are the commercial activities and how the assessee’s activities can be deciphered as commercial in nature. Before us, the assessee has also submitted the documents demonstrating the expenditure incurred by the assessee a copy of which was provided before the Ld. CIT (Exemption). However, in our view, the Ld. CIT (Exemption) did not consider the same and has not applied his mind while considering the documents submitted by the assessee. Under these circumstances, we direct the Ld. CIT (Exemption) to examine the documents / submissions made by the assessee in detail and accordingly decide the issue of grant of registration U/s. 80G of the Act after affording a reasonable opportunity of being heard to the assessee in accordance with the principles of natural justice. It is ordered accordingly. 6. In the result, appeal of the assessee is allowed for statistical purposes. Pronounced in the open Court on 07th March, 2025. Sd/- Sd/- (श्री क े नरधिम्हा चारी) (एि बालाक ृष्णन) (K NARASIMHA CHARY) (S.BALAKRISHNAN) न्याधयकिदस्य/JUDICIAL MEMBER लेखा िदस्य/ACCOUNTANT MEMBER Dated :07/03/2025 OKK - SPS आदेश की प्रनतनलनप अग्रेनर्त /Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee – Royal Deeds Charitable Trust, 20-6-3/21, Appala Raju Street, Ayodhya Nagar, Vijayawada, Andhra Pradesh- 520003. 2. रधजस्व/The Revenue – Commissioner of Income Tax (Exemption), Aayakar Bhawan, Opposite LB Stadium Basheer Bagh, Hyderabad, Telangana – 500004. 3. The Principal Commissioner of Income Tax, 4. आयकर आयुक्त (अपील)/ The Commissioner of Income Tax 5. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण, नवशधखधपटणम/ DR, ITAT, Visakhapatnam 6. गधर्ा फ़धईल / Guard file आदेशधनुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam "