Thavam Research Foundation Vs CIT (Exemption) (ITAT Chennai)
Assessee, Thavam Research Foundation, challenged the order of CIT (Exemption), Chennai, rejecting its application for registration u/s 12A on the ground that its tie-up with Bharathidasan University for conducting diploma courses in acupuncture was commercial in nature. CIT(E) treated the 30:70 fee-sharing arrangement as a franchise model & denied registration.
Tribunal noted that the MoU was an educational collaboration, not a business franchise, & that fee-sharing did not alter the charitable nature of the trust. It held that at the stage of registration, only the genuineness of objects & activities needs examination, not profitability or fee levels.
Citing Soorya Educational Trust & Karnataka Badminton Association, the Bench observed that generating surplus or charging fees cannot negate charity if the objects are genuine. The CIT(E) had exceeded jurisdiction by delving into commercial aspects.
The order of the CIT(E) was set aside, & the Commissioner was directed to grant registration u/s 12A.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This appeal is filed by the assessee against the order bearing DIN & Order No.ITBA / EXM / F / EXM45 / 2024-25 / 1075247955(1) dated 29.03.2025 of the Learned Principal Commissioner of Income Tax (Exemption), [herein after “CIT(E), Chennai. The reference to the word “Act” in this order hereinafter shall mean the Income Tax Act, 1961 as amended from time to time.
