SRI GMH HARITY FOUNDATION,DAVANAGERE V. THE INCOME TAX OFFICER- EXEMPTION (EXEMPTION WARD-1), HUBBALLI

ITA 442/BANG/2025

AI Insights

The case involves the Sri GMH Charity Foundation, which appealed against the orders of the Commissioner of Income Tax (Exemptions), Bangalore, cancelling the trust's registration under section 12AB and approval under section 80G of the Income Tax Act, 1961. The cancellations were based on the trust's failure to provide sufficient documentation to prove the genuineness of its charitable activities, particularly concerning funds received for establishing an oxygen plant. The Tribunal found that the trust was not given adequate opportunity to present its case and remanded the matter back to the CIT (Exemptions) for a thorough re-examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712351 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: E. SHRIDHAR
• Assessee Lawyers: RAMANAGOWDA S GOWDAR
• Keywords: Opportunity of being heard
• Section: 12A; 80G

Judgement Text

"ITA Nos.441 & 442/Bang/2025 Sri GMH Charity Foundation, Davanagere IN THE INCOME TAX APPELLATE TRIBUNAL “B’’BENCH: BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA Nos.441 & 442/Bang/2025 Assessment Year : N.A. Sri GMH Charity Foundation GMIT Campus PB Road Davanagere 577 004 Karnataka PAN NO : AAETS7939N Vs. CIT (Exemptions) Bangalore APPELLANT RESPONDENT Appellant by : Sri Ramanagowda S Gowdar, A.R. Respondent by : Sri E. Shridhar, D.R. Date of Hearing : 05.05.2025 Date of Pronouncement : 28.07.2025 O R D E R PER KESHAV DUBEY, JUDICIAL MEMBER: These appeals at the instance of the assessee are directed against the order of the ld. CIT(Exemptions) Bangalore both dated 27.12.2024 vide DIN & Notice No. ITBA/EXM/F/EXM45/2024-25/1071608709(1) cancelling the approval u/s 80G of the Act of the Income Tax Act, 1961 (in short “The Act”) and vide DIN & Notice No. ITBA/EXM/F/EXM45/2024- 25/1071608504(1) cancelling the registration u/s 12AB of the Act. Since the issue in both these appeals of the same assessee trust is common & more particularly the outcome of ITA No.441 /Bang/2025 is dependent on outcome of ITA No.442 /Bang/2025 , these are clubbed together, heard together and disposed of by this common order for the sake of convenience. Printed from counselvise.com ITA Nos.441 & 442/Bang/2025 Sri GMH Charity Foundation, Davanagere Page 2 of 7 2. Now first, we take up ITA No.442/Bang/2025 for adjudication. In this appeal, the assessee has raised the following grounds of appeal:- 3. Brief facts of the case are that the assessee trust is established by way of Trust Deed dated 30/11/2004 under the name & style of “ Sri G. Mallikarjunappa Smt. Halamma Charity Foundation” in short Sri GMH Charity Foundation. The objects of the Trust are Rural Development, Relief to poor, Education and Other objects of general public utility. The assessee trust had been Printed from counselvise.com ITA Nos.441 & 442/Bang/2025 Sri GMH Charity Foundation, Davanagere Page 3 of 7 granted registration under sub clause (i) of clause (ac) of sub- section (1) of section 12A of the Act on 30/09/2021 from the Assessment year 2022-23 to Assessment years 2026-27 vide Unique Registration Number AAETS7939NE20210. The Assessee Trust had also been granted provisional approval under clause (iv) of first proviso to sub-section (5) of section 80G of the Act on 06/10/2021 vide Unique Registration Number AAETS7939NF20218 from 06/10/2021 to Assessment year 2024- 25. On receipt of application in form 10AB dated 30.6.2024 for the renewal of registration u/s 12AB of the Act, the ld. CIT(E) assigned the case to the JAO for verification. The JAO issued letters/notices through official mail/post calling for the details/documents. The details submitted by the assessee were verified. 3.1 The ld. CIT(E) observed that major donations of the trust were stated to be from a related entity called M/s. GEM International Pvt. Ltd. The funds received during the year ended on 31.3.2023 and 31.3.2024 were Rs.27,56,601/- and Rs.11,15,000/-. Out of the credits, the assessee trust made payments towards the objects i.e. an amount of Rs.21,93,870/- for supply of food items to poor during FY 2022-23. However, ld. CIT(E) observed that the amount has been paid to GM Sugars. The amount of Rs.3,80,000/- for bags and books to the children during FY 2023-24 for which no proof had been produced. The ld. CIT(E) further observed that the assessee received an amount of Rs.1,46,00,001/- as corpus donation towards the establishment of Oxygen Plant. The A.R. was asked to furnish the details of corpus donations which were received during the year for the oxygen plant establishment. 3.2 The Ld. CIT(E) found that in HDFC bank bearing account no.919010006113971 for the period 1.4.2021 to 31.3.2022 the amount of Rs.144.34 lakhs have been paid to M/s Orchid Printed from counselvise.com ITA Nos.441 & 442/Bang/2025 Sri GMH Charity Foundation, Davanagere Page 4 of 7 Renewable Energy. The ld. A.R. stated that the full amount paid to M/s. Orchid Renewable Energy for the establishment of Oxygen Plant, however, ld. A.R. failed to produce documentary evidence such as agreement or Memorandum of Understanding etc. The assessee did not furnish the details such as where and when the oxygen plant was installed, details of the beneficiaries of the plant and the documents for having installed the plant. In view of the above, the ld. CIT(E) held that as the assessee did not furnish the documents for establishment of oxygen plant where trust received huge corpus funds and for the charitable activities, the genuineness of the charitable activities can’t be proved and hence the ld. CIT(E) rejected the application in form no.10AB dated 30.6.2024 filed for registration u/s 12AB of the Act and registration was cancelled. 4. Aggrieved by the order of ld. CIT(E) Bangalore dated 27/12/2024, the assessee has filed the present appeal before this Tribunal. 5. Before us, the ld. A.R. of the assessee submitted that the ld. CIT(E) passed the order cancelling the registration without providing reasonable opportunity being heard. Further the AR of the assessee submitted that the ld. CIT(E) had issued only one notice/letter dated 04/10/2024 & the assessee had also filed detailed reply on 03/11/2024. Further the ld. CIT(E) never asked the assessee to produce details/documents regarding establishment of Oxygen plant and accordingly prayed to grant one more opportunity before the ld. CIT(E) to substantiate its genuine activity. 6. The Ld. D.R. on the other hand relied on the order of ld. CIT(E) and expressed no objection if the case is remanded back to the file of ld CIT(E) to examine the genuineness of the activity carried on by the assessee trust. Printed from counselvise.com ITA Nos.441 & 442/Bang/2025 Sri GMH Charity Foundation, Davanagere Page 5 of 7 7. We have heard the rival submissions and perused the materials available on record. Before us, the ld. A.R. of the assessee submitted that the ld. CIT(E) passed the order cancelling the registration without calling for any further details if required for granting the registration. We are of the considered opinion that for the purpose of establishing the genuineness of the activity the assessee should satisfy the ld. CIT(E) by producing/submitting the details like agreement or Memorandum of Understanding with M/s. Orchid Renewable Energy for the establishment of Oxygen Plant, the details such as where and when the oxygen plant was installed, details of the beneficiaries of the plant and the documents for having installed the plant etc or such other details as may be required by the ld. CIT(E). Before us, the ld. A.R. of the assessee submitted that one more opportunity may be granted to the assessee trust to submit all these information/documents to establish the genuineness of its activities and accordingly in the interest of Justice & fair play & as requested by the AR of the assessee, we deem fit & proper to remit the entire issue in dispute to the file of ld. CIT(E) to decide afresh in accordance with law. Needless to say, a reasonable opportunity of being heard must be granted to the assessee. We also direct the assessee to produce/submit all the necessary details/documents/record/ financials/reports/information in support of its genuineness of Activities carried on by the Trust. It is ordered accordingly. 8. In the result, appeal of the assessee is partly allowed for statistical purposes. 9. Now we take up ITA No.441/Bang/2025, wherein the assessee has raised following grounds of appeal: Printed from counselvise.com ITA Nos.441 & 442/Bang/2025 Sri GMH Charity Foundation, Davanagere Page 6 of 7 10. Since we have remitted the entire issue of registration u/s 12AB of the Act to the file of ld. CIT(E), we deem it fit and proper to remit this issue of approval u/s 80G of the Act to the file of ld. CIT(E) to decide afresh in accordance with law as the ld. CIT(E) had passed the order without giving sufficient opportunity of being heard. It is ordered accordingly. 11. In the result, appeal filed by the assessee in ITA No.441/Bang/2025 is also partly allowed for statistical purposes. Printed from counselvise.com ITA Nos.441 & 442/Bang/2025 Sri GMH Charity Foundation, Davanagere Page 7 of 7 12. In the combined result, both the appeals filed by the assessee are partly allowed for statistical purposes. Order pronounced in the open court on 28th July, 2025 Sd/- (Waseem Ahmed) Accountant Member Sd/- (Keshav Dubey) Judicial Member Bangalore, Dated 28th July, 2025. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order Asst. Registrar, ITAT, Bangalore. Printed from counselvise.com "