SRI KAMARAJ EDUCATIONAL TRUST,PUDUKKOTTAI V. CIT EXEMPTIONS, CHENNAI

ITA 159/CHNY/2025

AI Insights

The case involves the Sri Kamaraj Educational Trust, which appealed against the decision of the Commissioner of Income Tax (Exemptions), Chennai, who had rejected the trust's application for approval under section 80G of the Income-tax Act, 1961. The CIT(E) had rejected the application on the grounds that the trust was only engaged in establishing educational institutions and not in providing education, which is a requirement for approval under section 80G. The Tribunal found that the CIT(E) had not fully considered the trust's intent, objects, and future plans, and thus remitted the matter back for a detailed examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 396407 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Other Referred Cases: Fifth Generation Education Society v. CIT 185 ITR 634 (All.), Anugraha Education Trust vs. CIT(E) [2025] 173 taxmann.com 852 (Banglore-Trib)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V. JUSTIN
• Assessee Lawyers: S. SRIDHAR
• Keywords: Opportunity of being heard; Charitable institution
• Section: 12A; 80G

Judgement Text

"आयकर अपीलीय अिधकरण, ‘सी’ \u0011ा यपीठ, चे\u0016ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI \u0019ी जॉज जॉज क े, उपा एवं \u0019ी जगदीश, लेखा सद' क े सम BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENT AND SHRI JAGADISH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.159/Chny/2025 Sri Kamaraj Educational Trust, TE No.4217, South Fourth Street, Pudukottai – 622 001. Vs. The Commissioner of Income Tax (Exemptions), Chennai. [PAN: AAPTS 3715H] (अपीलाथ\u0007/Appellant) (\b यथ\u0007/Respondent) अपीला थ: की ओर से/ Appellant by : Shri S. Sridhar, Advocate <=थ: की ओर से /Respondent by : Shri V. Justin, CIT सुनवा ई की ता रीख/Date of Hearing : 07.05.2025 घोषणा की ता रीख /Date of Pronouncement : 26.05.2025 आदेश / O R D E R PER JAGADISH, A.M Aforesaid appeal filed by the assessee arises out of the order of Learned Commissioner of Income Tax (Exemptions), Chennai [hereinafter “CIT(E)”] dated 24.12.2024. 2. The only effective ground of appeal in this appeal of assessee is against rejection of application seeking approval u/s 80G of the Income-tax Act, 1961 (hereinafter “the Act”). ITA No.159/Chny/2025 :- 2 -: 3. The assessee is a trust registered u/s. 12A of the Act and has made an application in Form-10AB seeking approval under clause (iii) of first proviso to sub section 80G(5) of the Act seeking approval u/s. 80G of the Act. The Ld. CIT(E) has rejected the application holding that the trust is only engaged in the process of establishing educational institution for a long period time, which cannot be considered as education for charitable purpose. The Ld. CIT(E) has held that the assessee had spent Rs.1,90,96,124/- towards building construction purpose and fund for which has been sourced through unsecured loan and therefore, the genuineness of fund flow and outflow could not be established without doubt with available details. 4. The Ld Authorized Representative (AR) of the assessee has argued that the assessee was granted registration u/s. 12A of the Act for A.Y 2022-23 to 2026-27 and was also granted provisional registration u/s. 80G(5)(iv) of the Act. However, the Ld. CIT(E) has rejected the application on the ground that the assessee is not engaged in providing education. The Ld. AR has argued that the Ld. CIT(E) has to see the object of the trust and it is evident that the object of the trust is to establish, maintain, run, develop, sponsor schools, colleges, research institution, universities, polytechnics, professional engineering institutions, technical, vocational, art, craft, science ITA No.159/Chny/2025 :- 3 -: schools and colleges and generally all kinds of educational institution including teachers training institutes, B.Ed. colleges and catering colleges/institutes. The Ld AR argued that the assessee is constructing school building and spent more than Rs. 1.9 Cr. which is for the purpose of education. The Ld. AR also relied on the various case laws including judgment of the Hon’ble Allahabad High Court in the case of Fifth Generation Education Society v. CIT 185 ITR 634 (All.) and ITAT decision in the case of Anugraha Education Trust vs. CIT(E) [2025] 173 taxmann.com 852 (Banglore-Trib) 5. On the other hand, the Ld. Departmental Representative (DR), has relied on the orders of Ld CIT(E) and argued that application was correctly rejected. 6. We have heard the rival submissions and perused the material available on record. It is seen that the Ld. CIT(E) has primarily based his conclusion on the current stage of activities without fully considering the intent, objects, and future plans of the assessee trust. While actual engagement in educational activities is a relevant factor, the creation of infrastructure essential for such activities is also a necessary and integral part of a charitable project. Furthermore, the analysis of the financials appears to be summary in nature without a ITA No.159/Chny/2025 :- 4 -: detailed examination in the context of the trust's stated objects. In view of the above, and in the interest of justice, we deem it appropriate to remit the matter back to the file of the Ld. CIT(E) for fresh consideration. The Ld. CIT(E) is directed to re-examine the application of the assessee u/s. 80G of the Act after affording due opportunity of being heard and taking into account the assessee’s submissions, financial statements, activities in furtherance of its objects, and relevant judicial precedents. 7. In the result, the appeal filed by the assessee is allowed for statistical purposes only. Order pronounced on 26th May, 2025. Sd/- Sd/- (जॉज जॉज क े) (George George K) उपा / Vice President (जगदीश) (Jagadish) लेखा लेखा लेखा लेखा सद\u0011य सद\u0011य सद\u0011य सद\u0011य /Accountant Member चे\u0013नई/Chennai, \u0016दनांक/Dated: 26th May, 2025. EDN/- आदेश क\u0019 \bितिल प अ े षत/Copy to: 1. अपीलाथ\u0007/Appellant 2. \b थ\u0007/Respondent 3. आयकर आयु\u000f/CIT, Chennai 4. िवभागीय \bितिनिध/DR 5. गाड\u0018 फाईल/GF "