TIE INDIA FOUNDATION, BANGALORE,BANGALORE V. CIT (EXEMPTION), BANGALORE, BANGALORE

ITA 231/BANG/2025

AI Insights

The case involves Tie India Foundation, which appealed against the decisions of the CIT(Exemptions), Bengaluru, rejecting their applications for registration under sections 12AB and 80G of the Income Tax Act. The primary issues revolved around the lack of sufficient proof of charitable activities and expenditures by the foundation. The Tribunal found contradictions in the CIT(E)'s findings and directed a re-examination of the foundation's activities and expenditures, emphasizing the need for a detailed and reasoned decision post-verification of the provided information.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711321 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ROHAN SOGANI
• 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.212 & 231/Bang/2025 Assessment year : 2025-26 Tie India Foundation, 11, 3rd Floor, A Wing, Divyasree Chambers, O’ Shaughnessy Road, Lanford Town, Bengaluru – 560 025. PAN: AAJCT 0012F Vs. The Commissioner of Income Tax (Exemption), Bengaluru. APPELLANT RESPONDENT Appellant by : Shri Rohan Sogani, Advocate Respondent by : Shri Murali Mohan, CIT(DR)(ITAT), Bengaluru. Date of hearing : 22.07.2025 Date of Pronouncement : 25.07.2025 O R D E R Per Prashant Maharishi, Vice President 1. ITA No.212/Bang/2025 is filed by the Tie India Foundation [assessee/appellant] against the order passed by the CIT(Exemptions), Bangalore [ld. CIT(E)] dated 23.12.2024 wherein the application filed by the assessee in Form 10AB dated 28.6.2024 for registration u/s. Printed from counselvise.com ITA Nos.212 & 231/Bang/2025 Page 2 of 6 12AB of the Income Tax Act, 1961 [the Act] was rejected and provisional registration granted was cancelled. 2. ITA No.231/Bang/2025 is filed by the assessee against the order of CIT(E) dated 23.12.2024 rejecting application made in Form 10AB dated 28.6.2024 for approval u/s. 80G(5) of the Act. 3. Therefore against both the above orders, the assessee is in appeal before us. 4. The facts show that assessee preferred an application in Form 10AB on 28.6.2024 for registration u/s. 12AB of the Act. The ld. CIT(E) assigned the case for verification to the jurisdictional Assessing Officer (JAO). The JAO has not recommended the case for registration for the reason that assessee has not furnished proof in respect of expenses incurred and also the bank statement called for. Further the financial statement furnished showed that only expenses incurred by the assessee are administrative in nature and did not include any charitable expenditure. Only Rs.6 lakhs expenses is incurred on account of payment made to Chennai Angels Network to obtain a list of start-ups in order to identify such start-ups. The assessee has also not furnished proof in respect of expenses of Rs.14 lakhs. In view of this, the ld. JAO and the Regional Head did not recommend the registration. 5. On the basis of the above recommendation, the ld. CIT(E) also rejected the registration granted and also the present application holding that assessee has not commenced charitable activities. Printed from counselvise.com ITA Nos.212 & 231/Bang/2025 Page 3 of 6 6. The ld. AR, Mr. Rohan Sohangi, vehemently submitted that merely on the basis of information of the ld. JAO, the ld. CIT(E) has cancelled the provisional registration as well as application for continuation of registration u/s. 12AB of the Act. He submits that had the assessee been given opportunity to explain these expenditure, same would have been submitted and at least the assessee should have been put the questions before rejecting the application. 7. The ld. CIT(DR) stated that the assessee did not furnish information before the JAO and therefore same was rejected. If the assessee shows the details of the expenditure or that it carries on charitable activities, then only the assessee can be granted registration. As the assessee has failed to show the details on the basis of the report of the JAO who made the enquiry, therefore application has been correctly rejected. 8. We have carefully considered the rival contentions and perused the orders of the ld. lower authorities. In fact assessee earlier applied for registration on 19.9.2022 which was rejected by order dated 25.3.2023. Once again the assessee made an application on 28.6.2024 which was also rejected. Therefore assessee is in appeal before us. 9. During the course of verification, the assessee submitted copy of the MoA and AoA along with financial statements. On verification of financial statement, it is alleged that assessee did not furnish proof of expenses incurred and it was found that assessee has only incurred administrative expenses. Further the JAO did not find the details of major expenses of Rs.6 lakhs for the year ended 31.3.2023 and of Printed from counselvise.com ITA Nos.212 & 231/Bang/2025 Page 4 of 6 Rs.14 lakhs for the year ended 31.3.2024. On this basis, it was stated that there is no merit in the claim of assessee. It is not the case that activities of the assessee were not found to be genuine. It is also not clear that when these details were called for, why the assessee did not furnish, despite giving proper opportunity of hearing. The report of the JAO which is made part of the order of the ld. CIT(E) also does not show when these details were asked for. Further ld. CIT(E) has merely followed the recommendation of the JAO. She also reached at a conclusion that assessee has made substantial amount of expenditure towards the objects, but assessee has not submitted any proof or evidence of such activities and therefore she reaches at a conclusion that assessee has not commenced its activities towards the attainment of objects. These are contradictory findings. In view of this, the order passed by the ld. CIT(E) dated 23.12.2024 is quashed. 10. The assessee is directed to furnish requisite information to the ld. CIT(E) afresh as mentioned in the report of verification of the JAO within 90 days from the date of receipt of this order. The ld. CIT(E) may carry out examination herself or also direct the verification unit for examination of the details. Thereafter, a speaking order may be passed about the genuineness of the activities of the trust with a specific finding that whether assessee is carrying on charitable activities or not. Despite showing substantial expenditure, the observation of the ld. CIT(E) that assessee has not commenced its activities is contradictory, but it is necessary to ascertain what for these expenditure are incurred. Printed from counselvise.com ITA Nos.212 & 231/Bang/2025 Page 5 of 6 The assessee is duty bound to explain the same to show the genuineness of the activities. 11. As the assessee’s application is rejected twice for registration u/s. 12AB of the Act, the onus is on the assessee now to establish before the ld. CIT(E) that it is carrying on charitable activities, its activities are genuine and assessee is entitled to registration under that section. On furnishing the information by the assessee, the ld. CIT(E) may decide the issue afresh, after granting opportunity of hearing to the assessee. 12. The assessee’s appeal in ITA No.231/Bang/2025 is against the rejection of application u/s. 80G of the Act which is dependent on the fate of the application of the assessee for registration u/s. 12AB of the Act. After deciding the fate of the application u/s. 12AB of the Act, the ld. CIT(E) may examine the application of the assessee for recognition u/s. 80G(5) of the Act and decide the issue afresh, after granting opportunity of hearing to the assessee. 13. In view of the above, both the appeals of the assessee are allowed for statistical purposes. Pronounced in the open court on this 25th day of July, 2025. Sd/- Sd/- ( SOUNDARARAJAN K. ) ( PRASHANT MAHARISHI ) JUDICIAL MEMBER VICE PRESIDENT Bangalore, Dated, the 25th July, 2025. /Desai S Murthy / Printed from counselvise.com ITA Nos.212 & 231/Bang/2025 Page 6 of 6 Copy to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. DR, ITAT, Bangalore. By order Assistant Registrar ITAT, Bangalore. Printed from counselvise.com "