ITAT Sets Aside Rejection of 80G Registration to Charitable Trust, Orders Fresh Consideration by CIT(E) [Read Order]

The Nagpur Bench of the Income Tax Appellate Tribunal (ITAT) has remitted to the Commissioner of Income Tax (Exemption), Pune, the question of approval under section 80G in the case of the assessee, Aacharya Shri Rushirajbaba Pratishahan, observing that the trust deserves one more opportunity to place all relevant material on record. Consequently, the appeal was allowed for statistical purposes, and the CIT(E)’s order dated 28 September 2024 was set aside.

The assessee-trust, operating from Laxmi Nagar, Nagpur, had obtained provisional registration under section 12AB on 20 October 2021. It later sought approval under Section 80G(5) to enable donors to claim a deduction for their contributions. While processing Form 10AB, the CIT(E) issued successive notices pointing to the alleged absence of any earlier 12A/12AA registration, failure to file a “note on activities”, and documentary evidence required under Rule 17A(2)(k). The CIT(E) also took notice of the non-submission of a donor list for the preceding three years and possible expenditure on temple construction, which the CIT(E) viewed as a religious rather than charitable activity prohibited by the second proviso to Section 80G(5).

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Despite two adjournments, the trust did not place the called-for details before the CIT(E). Citing “serious concern about the genuineness of activities”, the Commissioner rejected the application and simultaneously cancelled the provisional 80G approval.

Before the Tribunal, the assessee challenged the rejection on four grounds, inter alia, contending that the Commissioner had not considered the material already submitted, that its objects were purely charitable and not religious, and that the opportunity to be heard was inadequate.

The Division Bench comprising V. Durga Rao (Judicial Member) and K.M. Roy (Accountant Member) noted that during a hearing on 28 January 2025, the assessee’s authorised representative(AR), specifically pleaded for an additional chance to file the missing documents. The Department, represented by DR, opposed the plea.

After examining the record, the Bench found that the order of the CIT(E) had been passed without the benefit of a complete factual matrix, mainly because the assessee remained non-compliant at that stage.

Relying on the principle of natural justice, the Tribunal ruled that the issue should be referred back to the Commissioner so that a reasoned order could be passed on the merits, based on full evidence. Accordingly, the appeal was treated as allowed for statistical purposes.

To Read the full text of the Order CLICK HERE

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