Snehbandh Foundation Vs CIT (ITAT Pune)
The Income Tax Appellate Tribunal (ITAT) Pune has remanded the applications of Snehbandh Foundation for regular registration under Section 12AB(1)(b)(ii) and approval under Section 80G(5) of the Income-tax Act. The foundation’s applications were initially rejected by the CIT (Exemptions) (CIT(E)) on September 30, 2024, due to concerns regarding the genuineness of activities and the absence of Charity Commissioner sanction for loans taken from a trustee.
During the ITAT proceedings, the assessee’s counsel requested an additional opportunity to provide requisite details to substantiate the genuineness of its activities. Emphasis was placed on the need to clarify the unsecured loans taken from trustee Mrs. Neena Pandurana Joshi, arguing that these were temporary arrangements. The counsel cited the Nagpur Coordinate Bench’s decision in Prerana Samajik Sanskrutik Bahuddeshiya Shikshan Sanstha Vs. CIT(E) (ITA No.376/Nag/2023, order dated July 09, 2024), which suggests that small, temporary borrowings not from banks might not violate the Maharashtra Public Trust Act, 1960, or the Income-tax Act, 1961, if the trust serves a noble cause.
The ITAT noted that the CIT(E) had not provided a proper opportunity for the appellant to furnish clarifications on the loan issue. Consequently, the ITAT deemed it appropriate to remit the matter for de novo adjudication by the CIT(E). The CIT(E) is now directed to afford reasonable opportunity to Snehbandh Foundation to prove the genuineness of its activities and address the issue of temporary loans from the trustee, taking into account the precedent set by the Prerana Samajik Sanskrutik Bahuddeshiya Shikshan Sanstha case. Both appeals were allowed for statistical purposes, with the order pronounced on May 2, 2025.
