SINDHU CHARITABLE TRUST,KOLKATA V. CIT (EXEMPTION), , KOLKATA

ITA 420/KOL/2025

AI Insights

Sindhu Charitable Trust appealed against the order of the CIT (Exemption), Kolkata, which had cancelled the trust's provisional approval under section 80G(5) of the Income Tax Act, 1961. The cancellation was based on alleged non-compliance with notices issued by the CIT (Exemption). The Tribunal found that the trust had been incorrectly classified as a new trust and had applied under the wrong clause. Referencing the case of Nitdaa Foundation, the Tribunal held that the trust should have been considered under clause (i) of the first proviso to section 80G(5), which does not require provisional approval. Consequently, the Tribunal set aside the CIT's order and directed the restoration of the trust's approval.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712064 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: misc
• Other Referred Cases: Nitdaa Foundation v. Commissioner of Income tax (Exemption) [2024] 167 taxmann.com 111 (Kolkata - Trib.)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Charitable institution
• Section: 12AA; 12A; 80G

Judgement Text

"आयकर अपीलीय अधिकरण कोलकाता 'डी' पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘D’ BENCH, KOLKATA श्री जॉजज माथान, न्याधयक सदस्य एवं श्री राक ेश धमश्रा, लेखा सदस्य क े समक्ष Before SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER I.T.A. No.: 420/KOL/2025 Assessment Year: 2025-26 Sindhu Charitable Trust Vs. CIT (Exemption), Kolkata (Appellant) (Respondent) PAN: AAKTS6036N Appearances: Assessee represented by : Dheerendra Baid, FCA and A.C. Baid, AR. Department represented by : Sanjay Mukherjee, CIT-DR. Date of concluding the hearing : 09-July-2025 Date of pronouncing the order : 23-July-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)/Ld. CIT(E)’] passed in respect of registration u/s 80G(5)(vi) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 28.12.2024. Printed from counselvise.com Page | 2 I.T.A. No.: 420/KOL/2025 Assessment Year: 2025-26 Sindhu Charitable Trust. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal: “01. That your Appellant, a Charitable Trust and therefore an Association of Persons within the meaning of section 2(31)(iv) of the Income Tax Act ('Act' in brief) was granted a Provisional Registration under Sub-Clause(i) of Clause (ac) of sub section (1) of section 12A of the Act by Ld Principal Commissioner of Income Tax [Exemption], Kolkata ('PCIT-E) in brief valid for Assessment year 2022-23 to 2026-27 vide his Order bearing Document Identification Number (DIN' in brief) AAKTS6036NE2021301 and Unique Registration Number ('URN' in brief) AAKTS6036NE20213 on 24.09.2024. Thereafter, provisional approval under clause (iv) of first proviso to sub- section (5) of section 80G of the Act bearing Unique Registration Number ('URN' in brief) AAKTS6036N2024 was granted by Ld CIT-E, Kol per his Order dated 24.05.2022 bearing DIN: AAKTS6036NF20221 valid up to AY 2025-26 and the said provisional approval dated 24.05.2022 is erroneously and or illegally now cancelled retrospectively by Ld CIT-E, Kol per his Order bearing DIN: ITBA/EXM/F/EXM45/2024-25/1071656572(1) dated 28.12.2024 on the alleged ground of non-compliance by your Appellant of a couple of Notice/s issued by Ld CIT-E, Kol. 02. That your Appellant submits that a notice dated 14.12.2024 said and or claimed to has been issued by Ld CIT-E, Kolkata was received by and or served on your Appellant and the reply thereto was submitted on 17.12.2024 by your Appellant and therefore the question of its non- compliance as alleged or at all does not arise. 03. That requirements of notice dated 23.12.2024 issued by Ld CIT-E, Kol, could not be complied with because of inadequacy of time granted by Ld CIT-E Kol, to comply with his requirements and also for the reason that Mr Lachman P Belani, one of the trustees who was looking after the matter suddenly took ill on or about dt 21.12.2024 and was unable to attend to his normal duties till 28.12.2024, a fact duly evidenced by a copy of medical certificate dated 29.12.2024 issued by Dr. Sudip Mukherjee DMS, FWT hereto attached marked page 04. That Ld CIT-E, Kol has erred in law as well as in fact in not granting personal hearing whether through Video Conferencing or otherwise to your Appellant. 05. That impugned Order dated 28.12.2024 issued by Ld CIT(E) Kol is otherwise post-haste, erroneous, unjustified, illegal and or void ab-initio. 06. That your Appellant craves leave to amend, alter, revise, rectify or modify otherwise all or any of the grounds aforesaid and or to take Printed from counselvise.com Page | 3 I.T.A. No.: 420/KOL/2025 Assessment Year: 2025-26 Sindhu Charitable Trust. Additional Ground/s as and if required prior to hearing of the instant Appeal. 07. That your Appellant most humbly prays: That Hon'ble Tribunal may be pleased to revoke, rescind, cancel, annul, set aside or otherwise nullify the said Order dated 28.12.2024 issued by Ld CIT-E, Kol and direct the Respondent to withdraw, cancel, revoke or otherwise modify his said Oder under Appeal and grant and or restore the registration granted by him. And for this act of kindness, your Appellant, as is duty bound shall ever pray.” 3. Brief facts of the case are that the assessee is a trust and had filed an application on 30/06/2024 for approval under section 80G(5)(iii) of the Act. The Ld. CIT(E) sought several details from the assessee but the assessee failed to furnish the reply on the queries raised. Hence, the application filed by the assessee was treated as non-maintainable and was rejected and the provisional certificate issued to the assessee was also cancelled with effect from the date of the issue. Aggrieved with the order of the Ld. CIT(E), the assessee has filed the appeal before the Tribunal. 4. Rival contentions were heard and the record and the paper book filed and the submissions made have been examined. The assessee has filed the written submissions, which are extracted as under: “01. That your Appellant, a Charitable Trust and therefore an Association of Persons within the meaning of section 2(31)(v) of the Income Tax Act, 1961, hereinafter also referred to as 'Act' for brevity, was created by a DEED OF TRUST dated 14th day of June, 2011 executed by and between SINDHI PANCHAYAT therein referred to as FOUNDER of the ONE PART and Sri Harish Metharamani and six others therein referred to as TRUSTEES of the other Part. A copy of the said DEED OF TRUST dated 14.06.2011 is annexed hereto marked Annexure 'A' and page 07 to 17 inclusive. Presently, there are five Trustees of the Trust. 02. That the said Trust was registered undersection 12AA of the Act vide an Order bearing No. DIT(E)/8E/136/2011-12/T-89/1561-63 dated 03.11.2011 Printed from counselvise.com Page | 4 I.T.A. No.: 420/KOL/2025 Assessment Year: 2025-26 Sindhu Charitable Trust. issued by Ld Director of Income Tax (Exemption), Kolkata, hereinafter also referred to as DIT(E) or as the case may be, CIT(E) for brevity. A copy of the said Order dated 03.11.2011 is annexed hereto marked Annexure 'B' and page 18. 03. That lately, said TRUST was granted a registration by an Order of Registration bearing Document Identification Number (DIN) AAKTS6036NE2021301 and Unique Registration Number (URN) AAKTS6036NE20213 dated 24.09.2021 for Assessment Year/s 2022-23 to AY 2026-27 by Ld DIT(E). A copy of said Order of Registration dated 24.09.2021 is annexed hereto marked Annexure 'C' and page 19 to 21. 04. That the said TRUST was granted approval u/s 80G(5) (vi) of the Act by Ld DIT(E) vide Order bearing F. No. DIT(E)/8E/136/2011-12/G-195/1564-66 dated 03.11.2011, a copy whereof marked Annexure 'D' and page 22 is annexed hereto. 05. That lately, an Order of Provisional Approval u/s 80G(5) of the Act bearing DIN: AAKTS6036NF2022101 and URN: AAKTS6036NF20221 dated 24.05.2022 valid from 24.05.2022 to AY 2025-26 was issued by Ld DIT(E), a copy whereof marked as Annexure 'E' and page 23 to 24 is annexed hereto. 06. That Ld CIT(E) claims to have issue a notice on 30.10.2024 to your Appellant. Regrettably, said notice had not come to notice of your appellant, presumably because of intervening holidays on account of Kali Puja, Diwali and there also being Saturday and Sunday in between. However, your Appellant submits that had the said notice come to their notice, they would have certainly complied with its requirements in as much as your Appellant would never have benefited from its non-compliance.” 5. It has further been submitted that the notice dated 17/11/2024 was partly replied and copies of last 3 years’ accounts and ITR acknowledgements were furnished. It was also submitted before us that the trust created was an irrevocable trust and the copy of the trust deed dated 14/06/2011 was filed. It is stated that adequate opportunity was not provided for filing response to the notice dated 23/12/2024 and the trustees are stated to be semi-literate persons, unable to understand nitty-gritty of tax laws and its complications. It is also submitted that the approval u/s 80G(5)(vi) of the Act was granted by the authorities following and on the basis of registration of the TRUST granted by them u/s 12AA of the Act based on the same set of documents including the said TRUST DEED dated 14.06.2011. Said Registration, though Printed from counselvise.com Page | 5 I.T.A. No.: 420/KOL/2025 Assessment Year: 2025-26 Sindhu Charitable Trust. currently provisional, is still valid and in force. Hence, it is stated to be a travesty that the impugned approval u/s 80G(5) of the Act granted by same authorities based on that same set of documents is now withdrawn on the alleged ground. Cancellation of approval u/s 80G(5)(vi) of the Act on the alleged ground is therefore stated to be erroneous, unjustified, arbitrary, invalid and or illegal. Impugned Order of cancellation of approval granted by Ld DIT(E) u/s 80G(5) of the Act, is therefore liable to be set aside and therefore, it is requested that the same may be quashed, set aside and or nullified otherwise to restore the approval rightly and legally granted. 6. We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT(E). The assessee was an old trust and as per the provisions of the Act, it should have applied under clause (i) of the 1st proviso to section 80G(5), and there was no need for seeking any provisional approval. Similar issue arose in the case of Nitdaa Foundation v. Commissioner of Income tax (Exemption) [2024] 167 taxmann.com 111 (Kolkata - Trib.) wherein it has been held as under: ■ The assessee was an existing trust and had been granted approval under section 12AA as well as under section 80G earlier, but instead of applying under clause (i) of the first proviso to section 80G(5), it applied under clause (iii) as a new trust. If it had applied under clause (i), there was no need of issuing any provisional certificate and as per the second proviso to section 80G(5) the Principal Commissioner or Commissioner would have passed an order in writing granting it approval for a period of five years and there was no requirement for seeking any provisional approval which is required only for a new trust. [Para 11] Printed from counselvise.com Page | 6 I.T.A. No.: 420/KOL/2025 Assessment Year: 2025-26 Sindhu Charitable Trust. ■ Thus the whole controversy arose due to incorrect mention of the clause under which the application was required to be filed, which was mentioned as clause (iii) of the first proviso to sub-section (5) of section 80G in column 6 of Form No. 10AB, whereas the same should have been mentioned as clause (i) of the first proviso to sub-section (5) of section 80G. Since Form No. 10AB was filed in time, the error on the part of the assessee for mentioning the wrong clause is deemed to be a curable defect and the application in Form No. 10AB is deemed to be filed under clause (i) of the first proviso to sub-section (5) of section 80G. The order of the Commissioner (Exemption) is hereby set aside. He is required to consider the application as filed under clause (i) of the first proviso to section 80G(5) and consider the same for grant of approval to the trust in accordance with law. [Para 12] 7. Hence, following the decision in the case of Nitdaa Foundation (supra), since the assessee was granted approval under the pre- amended provisions, and the trust was an existing trust, the order of the Ld. CIT(E) is hereby set aside. The Ld. CIT(E) shall consider the application filed as filed under clause (i) of the first proviso to section 80G(5), provide an opportunity to the assessee and grant approval to the trust in accordance with law. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 23rd July, 2025. Sd/- Sd/- [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 23.07.2025 Bidhan (Sr. P.S.) Printed from counselvise.com Page | 7 I.T.A. No.: 420/KOL/2025 Assessment Year: 2025-26 Sindhu Charitable Trust. Copy of the order forwarded to: 1. Sindhu Charitable Trust, C/o. Baid & Company, Chartered Accountants, 10C, Ballygunge Circular Road, Kolkata, West Bengal, 700019. 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 "