Academy of General Education Vs CIT (Exemptions) (ITAT Bangalore)
Income Tax Appellate Tribunal (ITAT), Bangalore Bench, has directed the Commissioner of Income Tax (Exemptions) (CIT(E)) to grant approval under Section 80G of the Income Tax Act, 1961, to the Academy of General Education. The ruling came in response to an appeal filed by the assessee trust against the CIT(E)’s rejection of their application for permanent 80G approval.
The Academy of General Education, an educational trust, had initially secured registration under Section 12A of the Act for the assessment years 2022-23 to 2026-27 and provisional approval under Section 80G for the period April 4, 2022, to assessment year 2024-25. Subsequently, the trust applied for permanent 80G approval on August 10, 2024.
The CIT(E) rejected the application on several grounds, primarily citing that the trust reported annual surpluses not utilized for charitable purposes but accumulated in Fixed Deposits, generating interest income. The CIT(E) also observed that as a private institution with high fee receipts and management fees, the increasing revenue was not commensurately passed on in terms of tangible or intangible facilities. Furthermore, the CIT(E) contended that only government-aided or remote institutions lacking infrastructure deserved 80G benefits, and that fee receipts, forming part of total receipts, did not qualify as donations under Section 80G.
