SHRIADINATH JAIN SHIKSHAN SANSTHAN SAMITI ,ALWAR V. CIT(E), JAIPUR, JAIPUR

ITA 133/JPR/2025

AI Insights

The case revolves around the rejection of an application by Shriadinath Jain Shikshan Sansthan Samiti for registration under section 80G(5)(iii) of the Income Tax Act, 1961, by the CIT Exemption, Jaipur. The CIT(E) had rejected the application on grounds of non-registration under the Rajasthan Public Trust Act, 1959, concerns over profitability, and doubts regarding the genuineness of the Samiti's activities. The Tribunal examined these grounds, referencing relevant legal provisions and precedents, and found them insufficient to justify the rejection of the application. The Tribunal's decision emphasized the importance of adhering to established legal standards and precedents in administrative decisions regarding tax exemptions for educational and charitable institutions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 315384 (ITAT-JAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Other Referred Cases: APJ Abdul Kalam Education and Welfare Trust vs. CIT(E)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH OJHA; ANITA RINES H
• Assessee Lawyers: P.C. PARWAL
• Keywords: Competent authority
• Section: 10; 80G

Judgement Text

"vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A-Bench” JAIPUR Jh xxu xks;y] ys[kk lnL; ,o aJh ujsUnz dqekj] U;kf;d lnL; ds le{k BEFORE: SHRI GAGAN GOYAL, AM & SHRI NARINDER KUMAR, JM vk;dj vihy la-@ITA No. 133/JPR/2025 Shriadinath Jain Shikshan Sansthan Samiti 11 Gandhi Nagar, Scheme No. 8, Alwar. cuke Vs. The CIT Exemption, Jaipur. LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAETS 2463H vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assessee by : Shri P.C. Parwal, C.A. jktLo dh vksjls@Revenue by: Shri Rajesh Ojha, CIT-DR & Mrs. Anita Rinesh, JCIT-DR lquokbZ dh rkjh[k@Date of Hearing : 08/05/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement: : 13/05/2025 vkns'k@ORDER PER: NARINDER KUMAR, JUDICIAL MEMBER . Appellant filed an application u/s 80G (5)(iii) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) before Learned CIT(E). Same application came to be rejected vide order dated 24.12.2024. That is how, the applicant Samiti is before this Appellate Tribunal. 2. Arguments heard. File perused. 3. On 07.06.2024, applicant filed an application seeking registration. Learned CIT(E) rejected the same on the following three grounds:- 2 ITA No. 133/JPR/2025 Shriadinath Jain Shikshan Stanthan Samiti, Alwar.  Non Registration under Rajasthan Public Trust Act, 1959.  Profitability.  Non genuineness of activities. All these grounds are taken up for discussion in view of the contentions raised before us. Non-Registration of the appellant under RPT Act, 1959. 4. This is the first ground made basis for rejection of prayer for registration of the Trust under section 80G(5)(iii) of the Act. It may be mentioned here that Co-ordinate Bench ITAT, Jaipur has held in APJ Abdul Kalam Education and Welfare Trust vs. CIT(E) decided on 15.01.2025 that for the purposes of registration of such institutions, u/s 12AB of the Act, registration under RPT Act, 1959 is not one of the essential requirements. In view of said decision, this ground does not survive any more. Profitability & Non genuineness of activities 5. These are other 2 grounds made basis for rejection of prayer for registration of the Samiti. While passing the impugned order, Learned CIT(E) has observed that the applicant Samiti does not exists solely for education and that from its 3 ITA No. 133/JPR/2025 Shriadinath Jain Shikshan Stanthan Samiti, Alwar. activities at huge margin, it could not be said that the same were charitable in nature. In this regard, Learned CIT(E) took into consideration that the applicant generated huge surplus i.e. from 32% 54% with profit, which was being applied in construction of school building i.e. plot, library and a meeting hall, as shown in the balance sheet, and in this manner the benefit was percolating to the hands of the land owners. 6. In para 4 of the impugned order, Learned CIT(E) observed that due to non furnishing of certain informations/details/documents, it could not be verified if the applicant was genuinely carrying out charitable activities. 7. Ld. AR for the appellant has pointed out that the application presented before Learned CIT(E) was u/s 80G(5)(iii) of the Act, but from the impugned order it can be gathered that Learned CIT(E) rejected the same as if the applicant had sought registration u/s 12AB of the Act. In this regard, Ld. DR for the department has submitted that as per report received by him from the department, it was due to inadvertent mistake that at page 27 of the impugned order, Section 12AB of the Act came to be mentioned in place of the actual provisions of section 80G(5)(iii) of the Act. 4 ITA No. 133/JPR/2025 Shriadinath Jain Shikshan Stanthan Samiti, Alwar. 8. The fact remains that Learned CIT(E) has rejected the application that was presented u/s 80G(5)(iii) of the Act seeking registration, and not for the purpose of section 12AB of the Act. 9. Ld. AR for the appellant has submitted that the applicant Samiti had already been granted approval u/s 10 (23C)(vi) of the Act vide order dated 24.09.2024 for the period from Assessment years 2022-23 to 2026-27, and that the applicant was never registered u/s 12AB of the Act. The contention is that while deciding the application u/s 80G(5)(iii) of the Act, Learned CIT(E) could not reject the prayer for registration, when approval u/s 10 (23C)(vi) of the Act stood already granted to the applicant Samiti. 10. Section 10(23C)(vi) of the Act provides that any income received by any university or other educational institution existing solely for education purpose, and not for purpose of profit, other than those mentioned in sub- clause (iiiab) or sub- clause (iiiad) and which may be approved by the Principal Commissioner or Commissioner, shall not form part of total income of the said university or other educational institution. 11. Admittedly, the application of the appellant seeking approval for the purpose of section 10 (23C)(vi) of the Act stands already allowed vide order dated 24.09.2024 and the said approval is for the period i.e. AY 2022-23 to AY 2026-27. It is not case of the department that said approval granted by 5 ITA No. 133/JPR/2025 Shriadinath Jain Shikshan Stanthan Samiti, Alwar. the competent authority has ever been challenged or sought to be challenged in any proceedings or withdrawn by the competent authority that accorded the same. 12. As regard surplus, in the written submissions presented by Ld. AR for the appellant, in the course of arguments here, the income of the applicant was “Nil” when computed as under:- FY Gross receipt Surplus Capital Exp. Accumulation upto 15% Accumulation above 15% Total income 2021-22 6,93,38,217 3,72,09316 1,74,21,045 1,04,00,733 93,87,538 Nil 2022-23 8,68,40,539 4,35,73,017 - 1,30,26,081 1,66,82,870 Nil 2023-24 8,26,60,740 1,44,28,270 - 1,23,99,111 20,29,159 Nil 13. Nothing to the contrary has been brought of our notice by the department. As rightly submitted by Learned AR, when accumulation upto 50% is permissible under the law, and sufficient notice thereof is given to the Assessing Officer in case the accumulation exceeds 50%, at this stage it cannot be said that the activities would be profitable. Therefore, in the given facts and circumstances, Learned CIT(E) was not justified in rejecting the application on the ground of profitability. 14. Admittedly, notice dated 05.07.2024 calling upon the applicant to furnish various details was issued to the applicant. Said queries are available from page 16 to 23 of the impugned order. 6 ITA No. 133/JPR/2025 Shriadinath Jain Shikshan Stanthan Samiti, Alwar. 15. Applicant sought adjournment, and the matter was accordingly postponed. Vide letter dated 25.09.2024 the applicant put forth its reply to the aforesaid letter, but Learned CIT(E) observed that applicant had not provided details, as prescribed by him from page 23 to 27. 16. Ld. AR for the appellant has submitted that income and expenditure account of the applicant was submitted before Learned CIT(E), and as such non furnishing of the remaining information did not call for rejection of the application on the ground that the applicant was genuinely not carrying out charitable or the activities as per its objects. Result 17. As a result of the above discussion, we find merit in the contention of Ld. AR for the appellant. The appeal is accordingly disposed of and Learned CIT(E) is directed to grant approval to the applicant-appellant u/s 80G(5)(iii) of the Act, in accordance with law. File be consigned to the record room after the needful is done by the office. Order pronounced in the open court on 13/05/2025. Sd/- Sd/- ¼xxu xks;y½ ¼ujsUnz dqekj½ (GAGAN GOYAL) (NARINDER KUMAR) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member 7 ITA No. 133/JPR/2025 Shriadinath Jain Shikshan Stanthan Samiti, Alwar. Tk;iqj@Jaipur fnukad@Dated:- 13/05/2025 *Santosh vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Shriadinath jain Shikshan Sanstha Samiti, Alwar. 2. izR;FkhZ@ The Respondent- CIT(E), Jaipur. 3. vk;dj vk;qDr@ The ld CIT 4. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 5. xkMZQkbZy@ Guard File ITA No. 133/JPR/2025) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asstt. Registrar "