Relief for Mahindra University: ITAT Quashes Rejection of 80G Approval, Orders Fresh Review by CIT(E)
The Tribunal set aside the rejection order for approval under Section 80G and ruled that the CIT(E)’s order was arbitrary and lacked specific findings, and directed fresh verification of the university’s charitable educational activities
The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the order of the Commissioner of Income Tax (Exemption) [CIT(E)] which rejected the application for approval under Section 80G of the Income Tax Act, 1961 and directed the CIT(E) to reconsider the application after thorough verification of the university’s charitable educational activities. Mahindra...
The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the order of the Commissioner of Income Tax (Exemption) [CIT(E)] which rejected the application for approval under Section 80G of the Income Tax Act, 1961 and directed the CIT(E) to reconsider the application after thorough verification of the university’s charitable educational activities.
Mahindra University (assessee), a private university established under the Telangana State Private Universities (Establishment and Regulation) Act, 2020, applied for approval under Section 80G to enable tax deductions for donations. The CIT(E) rejected the application, stating that the university had not carried out substantial charitable activities.
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Aggrieved by the order of the CIT(E), the assessee appealed to the ITAT. The assessee argued that the CIT(E) failed to appreciate its educational activities, which qualify as charitable under Section 2(15) of the Act.
The assessee highlighted its research contributions, including 459 published articles, 16 patents, and 60 sponsored projects, alongside granting 365 scholarships worth Rs. 3.65 crores. The assessee contended that the CIT(E) ignored the university’s prior approval under Section 10(23C)(vi), which confirmed its charitable nature.
The assessee argued that the rejection under Section 80G was arbitrary, as the CIT(E) provided no specific findings to dispute the genuineness of the university’s activities. The assessee submitted audited financials, Form 10B, and other documents to support its claims.
The Revenue argued that the CIT(E) was justified in rejecting the application, as the assessee failed to upload voluminous records to prove expenditure on charitable activities. The Revenue also contended that the university’s “other expenses” exceeded academic expenses, suggesting non-charitable operations.
The two-member bench comprising Vijay Pal Rao (Vice-President) and Madhusudan Sawdia (Accountant Member), observed that the CIT(E)’s order was non-speaking and lacked a definite finding on the nature or genuineness of the university’s activities.
The tribunal observed that the prior approval under Section 10(23C)(vi) established the charitable nature of the university’s educational activities, which could not be summarily disputed without evidence of contrary activities.
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The tribunal cited precedents such as Seth Vinod Kumar Somani Charitable Trust vs. CIT(E) (2020), which held that approval under Section 80G cannot be denied if charitable activities are established, unless violations are proven.
The tribunal set aside the CIT(E)’s order and remanded the matter for fresh adjudication. The tribunal directed the CIT(E) was directed to verify all relevant facts, including the university’s records and prior approval under Section 10(23C)(vi), while providing the assessee a fair opportunity to be heard.
The appeal of the assessee was allowed for statistical purposes.
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