Khaja Education Society Vs CIT (Exemptions) (ITAT Bangalore)
Educational Society Cannot Be Treated as Religious Trust Without Evidence – Registration u/s 12AB Rejection of 80G Set Aside – Matter Remanded to CIT(E)
Assessee, Khaja Education Society, running several educational institutions such as schools, colleges, engineering, medical and professional institutions, challenged the order of CIT (Exemptions) granting registration u/s 12AB as a “religious trust” instead of an educational/charitable trust, and consequential rejection of approval u/s 80G(5). The appeal before ITAT was filed with delay of 262 days, which the assessee explained as arising due to illness of the society’s president and change in management. The Tribunal held that the delay occurred for sufficient cause and therefore condoned the delay.
On merits, the Tribunal noted that the society had been registered as a charitable educational trust since 1980 with approval u/s 80G, and was running multiple educational institutions open to students of all communities. CIT(E) granted registration u/s 12AB but categorized the society as a religious trust without citing any material or conducting enquiry, and consequently denied approval u/s 80G.
ITAT held that before classifying a trust as religious, the authority must examine the objects, activities and beneficiaries and provide reasons. In the present case, CIT(E) neither referred to any material nor confronted the assessee with any alleged religious activity. Such classification without evidence was unsustainable.
Accordingly, ITAT set aside the orders of CIT(E) and restored the matter for fresh examination, directing the authority to verify the objects and activities of the society, provide opportunity of hearing, and then decide the issue of registration u/s 12AB and approval u/s 80G by passing a reasoned order.
Thus, both appeals were allowed for statistical purposes and the matter remanded to CIT(E).
FULL TEXT OF THE ORDER OF ITAT BANGALORE
