Karnataka Samarpana Education Society Vs CIT (Exemptions) (ITAT Bangalore)
Running Schools Does Not Make a Society “Charitable Only”: ITAT Directs Fresh Examination of Religious Objects
A society’s educational activities do not, by themselves, determine how it should be described in its Section 12AB registration. Where the application and governing documents disclose religious as well as charitable objects, the Commissioner of Income Tax (Exemptions) must examine that claim before recording the society as purely charitable. This is the principle emerging from the Bengaluru ITAT’s order in Karnataka Samarpana Education Society v. CIT(E), ITA No. 1439/Bang/2026, pronounced on 29 September 2026.
Registration Was Granted, but the Description Was Disputed
The society had applied in Form 10AB on 29 September 2025. The CIT(E), by order dated 17 January 2026, granted registration under Section 12AB for AYs 2027–28 to 2031–32. Thus, the appeal did not concern a refusal of registration. The society’s grievance was narrower: although it had sought recognition as a religious-cum-charitable institution, the registration described it as charitable.
The society argued that this was inconsistent with its application, its objects, its note on activities and the supporting records. It also pointed out that the CIT(E)’s order contained no finding rejecting its religious objects or activities. In its view, an incorrect description could matter when the provisions governing its exemption are applied in later years.
What the Tribunal Found in the Society’s Objects
The Tribunal examined the society’s Memorandum of Association. Its first object was to take charge of and manage the temporal affairs of the Oblates of St. Francis de Sales in Karnataka and elsewhere. The objects also referred to promoting their spiritual, educational and other interests. The Tribunal noted that the society operated schools, but observed that its activities were not confined to running educational institutions.
The order also records foreign contributions of ₹2,40,93,576 for the period up to 31 March 2023. That figure formed part of the facts noted by the Tribunal; the decision does not lay down that receipt of foreign contributions, by itself, establishes a religious character. The relevant enquiry remains the society’s objects, its activities and the material submitted with its application.
The Tribunal identified the sole issue as whether the society should be recognised as religious-cum-charitable instead of solely charitable. It did not treat the existence of schools as a complete answer to that question.
The Direction to the CIT(E)
The ITAT directed the CIT(E) to examine the matter and, if the requirements of law are satisfied, grant registration as a religious-cum-charitable trust. It allowed the society’s appeal.
The precise scope of this relief is important. The Tribunal did not itself issue a revised registration certificate or make an unconditional declaration that every statutory requirement had been fulfilled. The matter must be examined by the CIT(E), who has been directed to grant the appropriate description if the legal requirements are satisfied.
Equally, the order does not say that every institution with a religious reference in its objects must automatically be registered as religious-cum-charitable. Here, the society had expressly sought that classification in Form 10AB and relied on identified provisions of its Memorandum and records. The Tribunal found that its claim required examination in light of those materials.
Why the Description Matters
Registration under Section 12AB establishes a framework within which a trust or institution may claim the benefit of Sections 11 and 12, subject to the applicable conditions. The society’s concern was that its stated nature should be accurately recorded at the registration stage, rather than leaving a mismatch between its Form 10AB application and the registration order.
That concern is understandable where an institution carries on more than one kind of activity. Operating a school is plainly relevant to assessing what the society does, but its governing objects must also be read. A registration order describing an institution solely by reference to its educational work may fail to address religious objects expressly disclosed in the application. Conversely, a religious object in the Memorandum calls for examination; it does not dispense with scrutiny of the statutory requirements.
Author’s Comment
This is a useful decision for societies and trusts whose objects combine education, charitable work and religious purposes. Its practical lesson is to make the intended character clear in Form 10AB and support it with the Memorandum, a note explaining the objects, and records of actual activities. If the registration granted records a different character without addressing that material, the institution can challenge the description even though registration itself has been approved.
The holding should, however, be stated with care. The ITAT ordered a fresh examination, followed by religious-cum-charitable registration if warranted by law. It did not decide that running schools proves or disproves religious character. The broader principle is that the CIT(E) must consider all relevant objects and activities before classifying an institution under Section 12AB.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
1. This appeal is filed by Karnataka summer per our education society (assessee/appellant/trust) against the order passed by the Commissioner of income tax (exemptions) Bengaluru (the learned that CIT) dated 17 January 2026 under section 12 AB (1) (b) of the act wherein the assessee is granted registered for assessment year 2027 – 28 to 2031 – 32 in form No. 10 AD where the assessee trust is registered as charitable trust. The only grievance of the assessee is that assessee is incorrectly characterised as purely charitable instead of recognising it as a religious come charitable trust. Therefore this appeal.
2. The Assessee has raised the following grounds of appeal:
1. The learned Commissioner of Income Tax (Exemptions) (hereinafter referred as “CIT(E)” for brevity) has erred in passing the order in the manner passed by him. The order being bad is erroneous and is liable to be modified.
2. The learned Commissioner of Income Tax (Exemptions) has erred in law and on facts in incorrectly characterizing the nature of activities of the Appellant Trust as a purely “charitable” trust, instead of recognizing it as a religious-cum-charitable trust, as expressly declared in the application in form 10AB and borne out from the Trust Deed, the note on activities and supporting records.
3. The learned Commissioner of Income Tax (Exemptions) failed to appreciate that the Appellant had specifically applied for registration as a religious-cum-charitable trust, and that the impugned order contains no finding, discussion, or conclusion rejecting or disputing the religious objects or activities of the Appellant.
4. The impugned order is liable to be modified to the above extent, since the incorrect characterization of the Appellant’s nature is the result of non-consideration/incorrect processing of the record, and not on account of any adjudicated ineligibility or adverse finding against the Appellant.
5. The learned Commissioner of Income Tax (Exemptions) ought to have appreciated that accurate recording of the nature of the Appellant Trust is necessary for proper application of the provisions of Sections 11, 12, 12A/12AB, and 13 of the Income-tax Act, 1961.
The Appellant submits that each of the above grounds/sub-grounds are independent and without prejudice to one another.
The Appellant craves leave to add, alter, vary, omit, substitute or amend the above grounds of appeal, at any time of hearing, of the appeal, so as to enable the Income-tax Appellate Tribunal to decide the appeal according to law.
The Appellant prays accordingly.
3. We have heard Shri Joe James, Chartered Accountant, and Shri Arvind Kumar Singh, Commissioner of Income Tax, on this issue.
4. The sole issue in this appeal is whether the assessee should be recognised as a religious-cum-charitable trust rather than solely as a charitable trust. The assessee states that its religious-cum-charitable activities are expressly reflected in Form No. 10AB filed on 29 September 2025, Article 3 of the Society’s objects, the notes on its objects and activities submitted to the CIT, and its annual accounts.
5. Under its Memorandum of Association, the assessee’s first object is to take charge of and manage the temporal affairs of the Oblates of St. Francis de Sales in Karnataka and elsewhere. Its objects also include promoting their spiritual, temporal, educational, industrial, technical, agricultural, and other interests. The assessee received foreign contributions of ₹2,40,93,576 for the period up to 31 March 2023. Thus, although it operates schools, it also undertakes religious activities, and its registration as a charitable trust requires modification.
6. Accordingly, we direct the learned CIT(E) to examine the matter and, if the requirements of law are satisfied, grant the trust registration as a religious-cum-charitable trust.
7. In the result, the assessee’s appeal is allowed.
Order pronounced in the open court on 29th September, 2026.
