ST JOSEPH ENGINEERING COLLEGE ALUMNI ASSOCIATION,MANGALURU V. DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTIONS), CIRCLE - 1, MANGALURU, MANGALURU

ITA 982/BANG/2025

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The case involves the St. Joseph Engineering College Alumni Association appealing against the order of the Deputy Commissioner of Income Tax (Exemptions), which denied their application for approval under section 80G(5) of the Income Tax Act, 1961. The primary contention was that the CIT(E) had rejected the application without issuing a show cause notice and based on the erroneous conclusion that the trust had not commenced its activities due to minimal expenditure towards its objectives. The Tribunal referenced a previous decision in the assessee's own case where similar grounds for denial were set aside, thereby restoring the registration under section 12AB. The Tribunal concluded that the CIT(E)'s decision was incorrect and allowed the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712965 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: misc
• Other Referred Cases: ITA No. 424/Bang/2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MURALI MOHAN
• Assessee Lawyers: KEERTHANA M.S
• Keywords: Set aside; Principle of natural justice
• Section: 80G

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH : BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE – PRESIDENT AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER ITA No. 982/Bang/2025 Assessment Year : 2025-26 St. Joseph Engineering College Alumni Association, College Campus, Vamanjoor, Mangaluru – 575 028. PAN: ABKAS9854N Vs. The Deputy Commissioner of Income Tax (Exemptions), Circle – 1, Mangaluru. APPELLANT RESPONDENT Assessee by : Ms. Keerthana M.S, CA Revenue by : Shri Murali Mohan, CIT-DR Date of Hearing : 09-07-2025 Date of Pronouncement : 31-07-2025 ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER This is an appeal filed by the assessee challenging the order of Ld.CIT(E) dated 23/12/2024 in which the approval sought for u/s. 80G(5) was denied and raised the following grounds: “1. The order passed by the learned Commissioner of Income Tax (Exemptions) (\"CIT(E)\"), under section 80G of the Income Tax Act, 1961 (\"the Act\"), insofar as it is against the Appellant, is opposed to law, weight of evidence, natural justice and probabilities on the facts and circumstances of the Appellant's case. Printed from counselvise.com Page 2 of 5 ITA No. 982/Bang/2025 2. The learned CIT(E) erred in law by rejecting the approval under section 80G of the Act without issuing a show cause notice proposing such rejection and consequently, the impugned order grossly violates the principles of natural justice on the facts and circumstances of the case. 3. The learned CIT(E) erred in law by rejecting the approval under section 80G of the Act by holding that substantial expenditure is not incurred towards the objects of the trust despite no such requirement necessary as per the provision and consequently, passed a perverse order on the facts and circumstances of the case. 4. The learned CIT(E) failed to properly consider the documentary evidence and failed to appreciate that the Appellant fulfills all the necessary conditions for approval under section 80G of the Act on the facts and circumstances of the case, The Appellant craves to add, alter, modify, substitute, change and delete any or all of the grounds before the appeal is finally being heard or disposed of. In the view of the above and other grounds that may be urged at the time of the hearing of appeal, the Appellant prays that the appeal may be allowed in the interest of justice and equity.” 2. The assessee filed this appeal with a delay of 59 days and filed an application to condone the said delay. In the said application, the assessee had submitted that both the orders rejecting the application for registration u/s. 12AB as well as the approval u/s. 80G(5) were passed on the same date and therefore the assessee was under the impression that a single appeal challenging the rejection of the 12AB registration would be enough and therefore filed an appeal before this Tribunal as against the rejection order made u/s. 12AB of the Act. Subsequently, the assessee came to know that a separate appeal should also be filed against the rejection of the approval and thereafter the present appeal has been filed before this Tribunal with a delay of 59 days. 3. We have considered the said submissions made by the assessee and we are satisfied that the assessee had sufficient reasons for not presenting the appeal in time before this Tribunal and therefore we are condoning the Printed from counselvise.com Page 3 of 5 ITA No. 982/Bang/2025 said delay of 59 days in filing the present appeal and proceeded to decide the appeal on merits. 4. The brief facts of the case are that the assessee is a registered society engaged in charitable and social welfare activities, including public awareness programs, social work, and community engagement initiatives as per its stated objectives. The provisional registration was granted in Form 10AC by the ld. PCIT/CIT on 16/02/2022 vide unique Registration No. ABKAS9854NE20216 from AY 2022-23 to AY 2024-25. Thereafter the assessee Trust submitted an application in Form 10AB on 28.06.2024, seeking final registration under Section 12AB of the Act. On receipt of the application, the ld. CIT(E) assigned the case to the Jurisdictional Assessing Officer (JAO) for verification. On perusal of the submissions made by the assessee, both Range Head and JAO did not recommend for registration and therefore the Ld.CIT(E) had rejected the application seeking final registration u/s. 12AB of the Act. The Ld.CIT(E) also observed that the assessee trust has not made substantial amount of expenditure towards the objects. The assessee also filed an application for approval u/s. 80G(5) of the Act before the Ld.CIT(E). The Ld.CIT(E) vide his order dated 23/12/2024 after verifying the financials of the assessee had observed that the assessee has not made any substantial expenditure towards the objects of the trust. Therefore the Ld.CIT(E) had come to the conclusion that the assessee had not commenced its activities towards the attainment of the objects and rejected the application for approval. The said order of the Ld.CIT(E) is under challenge before this Tribunal. 5. At the time of hearing, the Ld.AR submitted that the Ld.CIT(E) had accepted that some expenditures were made towards the objects of the trust which shows that the trust had commenced its activities. Not incurring a substantial expenditure is not a valid reason to conclude that the assessee had not commenced its activities. The Ld.AR also filed a paper book enclosing the various documents including the order of this Tribunal in Printed from counselvise.com Page 4 of 5 ITA No. 982/Bang/2025 assessee’s own case in which the 12AB registration was restored to the assessee trust. 6. The Ld.DR relied on the order of the Ld.CIT(E) and prayed to dismiss the appeal. 7. We have heard the arguments of both sides and perused the materials available on record. 8. We have perused the rejection order passed by the Ld.CIT(E) in which the only allegation levelled by the Ld.CIT(E) is that the assessee had received donations from last 3 years, however the expenses were less towards the objects of the trust and on that basis, the Ld.CIT(E) had come to the conclusion that the assessee had not commenced its activities. Therefore, the Ld.CIT(E) had rejected the application for approval only on the ground that a meagre amount was spent towards the objects of the trust. We do not find that the said finding is correct and in fact similar reasons given by the Ld.CIT(E) for denying the registration u/s. 12AB of the Act in respect of the assessee was set aside by the Tribunal in ITA No. 424/Bang/2025 dated 25/06/2025 in which the Tribunal in paragraph 7.1 had held as follows: “7.1 Respectfully following the above decision of the coordinate Bench, we are of the opinion that the ld. CIT(E) grossly erred in not granting registration merely on the basis of not incurring the substantial amount of expenditure and accordingly, we allow the appeal of the assessee and direct the ld. CIT(E) to grant registration u/s 12AB of the Act as applied by the assessee trust on 28.6.2024 in form No. 10AB. It is ordered accordingly.” 9. The approval u/s. 80G(5) is in consequential to the registration granted u/s. 12AB of the Act. In the present case, this Tribunal had directed to grant the registration u/s. 12AB of the Act after rejecting the allegations levelled by the Ld.CIT(E). In such circumstances, we are in total agreement with the reasoning given by the Tribunal in the assessee’s own case in respect of the registration sought for u/s. 12AB of the Act and Printed from counselvise.com Page 5 of 5 ITA No. 982/Bang/2025 thereby allow the present appeal filed by the assessee with the direction to the Ld.CIT(E) to grant the approval u/s. 80G(5) of the Act. 10. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 31st July, 2025. Sd/- Sd/- (PRASHANT MAHARISHI) (SOUNDARARAJAN K.) Vice – President Judicial Member Bangalore, Dated, the 31st July, 2025. /MS / Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. Guard file 6. CIT(A) By order Assistant Registrar, ITAT, Bangalore Printed from counselvise.com "