CIT(E) Can’t Deny Sec. 80G Approval by Examining Trust’s Receipts | ITAT

Case Details: Anugraha Education Trust vs. Commissioner of Income-tax (Exemptions) - [2025] 173 taxmann.com 852 (Bangalore-Trib.)

Judiciary and Counsel Details

• Keshav Dubey, Judicial Member & Waseem Ahmed, Accountant Member
• Ms Sunaiana Bhatia, A.R for the Appellant.
• Smt. Srinandini Das, D.R. for the Respondent.

Facts of the Case

The assessee-trust was registered under section 12A and applied for approval under section 80G. The CIT(E) rejected the approval under section 80G on the ground that school bus fees, tuition fees, and exam fees collected by the assessee trust did not fall under the definition of donation. Displeased by the order, the assessee filed an appeal to the Tribunal.

ITAT Held

The Tribunal held that the CIT(E), without application of mind and more particularly without understanding the facts of the case, had completely misdirected herself in holding that provisions of section 80G apply in the cases of receipts in the form of donations to certain funds as defined in section 80G(2).

The CIT(E) decided the issue from the perspective of the donor who claims the deduction under section 80G (Chapter VIA) from gross total income after paying the donation and not from the perspective of the institution/trust being the donee who is seeking approval under section 80G. At the time of granting approval under section 80G, the authority has to satisfy itself that the charitable institution is established in India for charitable purposes and the activities of the assessee trust are genuine.

The mere fact that the assessee, being an educational institution, received school bus fees, tuition fees and exam fees, the approval under section 80G cannot be denied, especially when it is established for the charitable purposes within the meaning of section 2(15) and the registration under section 12A has already been granted. The provisions of sections 11 and 12, along with section 13, including the application of the fund collected by the charitable organisation, are to be examined during assessment proceedings and not at the time of approving section 80G.

The issue of whether receipts for school bus, tuition, and exam fees do not fall under the definition of donation is not relevant in the present proceedings, as it is not a case of claiming a deduction of a donation paid under section 80G from the donor’s gross total income. Accordingly, the CIT(E) was directed to approve the assessee under section 80G as applied.