Educational Trust’s Objects Genuine and Charitable Based on Documentary Evidence: ITAT quashes S. 12AB & S. 80G Registration Denial [Read Order]

In the instant case, the assessee, the New Education Society, is an educational trust running New English High School and Junior College in Ulhasnagar, Maharashtra, with the object of advancing education and culture through schools, libraries, and lectures. The trust was registered with the Charity Commissioner and had earlier obtained registration under section 12AA in 2007, followed by provisional registration under section 12AB on 07.10.2022.

The assessee filed applications in Form 10AB seeking permanent registration under section 12AB and approval under section 80G(5). It submitted all supporting documents, including the Trust Deed, registration certificates, audited financial statements, approvals from the State Education Board, and details of activities and bank accounts. The CIT(E), Pune, rejected both applications, alleging that the assessee failed to provide information required to verify the genuineness of activities and compliance with the law.

Want a deeper insight into the Income Tax Bill, 2025? Click here

The assessee contended that all relevant documents and details were duly filed along with Form 10AB, establishing the genuineness of its charitable and educational activities. It was argued that the trust’s objects squarely fall under “advancement of education”, a recognised charitable purpose under section 2(15) of the Income Tax Act.

The income was applied only for educational purposes, and there was no element of private profit or non-charitable activity. The assessee submitted that the CIT(E) passed a mechanical order without examining the documents on record or issuing any proper show cause notice. The assessee relied on judicial precedents, including Marine Drishti & Coastal Foundation v. ITO, which held that registration cannot be denied merely on procedural or technical grounds when activities are genuine.

The Revenue supported the order of the CIT(E), contending that the assessee had not fully complied with the requirements of section 12AB(1)(b)(i). It was argued that the CIT(E) has the discretion to verify genuineness, and in the absence of full cooperation from the assessee, rejection was justified.

The DR submitted that mere filing of documents is not enough; the assessee must establish actual charitable activity and compliance with statutory conditions. However, the DR did not produce any contrary evidence to show that the trust’s activities were non-genuine or non-charitable.

Know Practical Aspects of Tax Planning, Click Here

The Tribunal observed that the assessee had furnished all required documentary evidence, including government approvals, audited accounts, and a detailed note of activities. There was no evidence or allegation that the trust engaged in non-charitable activities or misused its funds. The CIT(E) failed to apply his mind and rejected the application mechanically.

The two-member bench comprising Vinay Bhamore(Judicial member) and Dr Dipak P. Ripote (Accountant Member), holding the trust’s objects and activities as genuine and charitable, set aside the rejection and directed the CIT(E) to grant registrations under sections 12AB and 80G(5).

Support our journalism by subscribing to Taxscanpremium. Follow us on Telegram for quick updates