R. Mangaldas Charitable Trust Vs CIT (Exemptions) (ITAT Mumbai)
The case concerns an appeal filed by R. Mangaldas Charitable Trust against the order of the Learned Commissioner of Income Tax (Exemptions), Mumbai [“Ld. CIT(E)”], dated 19-11-2024, which rejected the trust’s application for registration under section 80G(5)(iii) of the Income Tax Act, 1961. The trust had submitted an application in Form 10AB seeking approval under section 80G, which was examined by the Ld. CIT(E). Notices were issued requesting documents and clarification. The Ld. CIT(E) observed that Object No. 2(k) of the Trust Deed, which authorizes providing financial assistance to students for studies in India or abroad, suggested potential application of funds outside India. Consequently, a show-cause notice was issued.
The trust responded that its intention is to provide assistance in India in Indian Rupees, even if students pursue studies abroad. It submitted an affidavit and a resolution passed by its trustees stating that no donations have been remitted in foreign currency since inception, no such remittances are intended in the future, and that the word “abroad” may be deleted from the trust deed in due course. The Ld. CIT(E) rejected the application, reasoning that the resolution only offered a possibility of amendment, not a conclusive change, and that the trust had not presented evidence of having initiated the process for amending the trust deed. The CIT(E) further held that the trust’s explanation regarding compliance with section 11 of the Act was unsatisfactory. Reference was made to clauses (i) to (v) of section 80G(5), and in the absence of sufficient compliance, the application was rejected.
