Sir CV Raman Educational & Charitable Trust Vs CIT (Exemptions) (ITAT Chennai)
The ITAT Chennai examined appeals challenging the rejection of registration under Section 12AB and approval under Section 80G by the Commissioner of Income-tax (Exemptions). The assessee, a public charitable trust established in 2006, had objects relating to education, medical relief, and assistance to the poor. It had acquired 17.3 acres of land for establishing an educational institution, financed through loans. However, due to restrictions on land use, lack of funds, and other constraints, the trust could not commence its activities for several years. A supplementary trust deed was executed in 2022 to align with legal requirements, new trustees were inducted, and steps such as land conversion (approved in 2026) were taken to operationalize a para-medical institution. The trust applied for registration in 2025.
The CIT(E) rejected the application primarily on the grounds that no charitable activities had commenced, financial disclosures were incomplete, and loans appeared doubtful due to non-repayment and absence of interest. It was held that these factors indicated lack of genuineness of activities and violation under Section 12AB.
Before the Tribunal, the assessee argued that the delay in commencing activities was due to genuine constraints and that steps had been actively taken toward achieving its charitable objectives. It was contended that non-commencement of activities does not imply non-genuineness and that all relevant details, including fixed assets, were disclosed, with any omissions being inadvertent. The loans were explained as funds raised from known associates to acquire land, with non-repayment attributable to lack of liquidity.
