TaxTMI 
TaxTMI 
2026 (9) TMI 1312
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.... raised the following grounds of appeal in ITA No.271/Bang/2026 for the AY 2024-25:- Ground No.1 - Objects are educational and Charitable: The learned CIT(E) erred in law and on facts in not appreciating that the appellant's objects are intrinsically connected with education, skill development, and promotion Of entrepreneurship among poor and deserving students through incubation facilities and support, falling within section 2(15) of the Act. It is respectfully submitted that in the case of a Section 8 Company, all essential charitable safeguards are statutorily embedded in the governing framework of the Companies Act, 2013 itself, The charitable character, nonprofit orientation, application of income solely towards objects, prohibition on distribution of profits, restrictions on alteration of objects, mandatory audit, and compulsory transfer Of assets upon dissolution are not optional clauses but are inherent and mandatory consequences of incorporation under Section 8. Accordingly, the charitable objectives and safeguards are already embedded by default in a Section 8 Company by operation of law, and do not require reiteration through additional tru....
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....maj Tambaram Trust, wherein it has been held that registration cannot be denied merely because activities have not commenced and that the statute provides for cancellation if activities are subsequently found to be non-genuine. Ground No. 5 - Binding CBDT Circular Ignored The learned CIT(E) failed to follow CBOT Circular No. 11/2019, which clarifies that at the Stage Of registration, examination is confined to objects and genuineness, and not to insist upon actual activities, especially in the case of newly established entities. Ground No. 6 - Delav Condonation Properly Filed but Not Considered The learned CIT(E) erred in alleging delay in filing Without appreciating that the application was filed in "WITH CONDONATION" mode in Form IOAB and that reasons for delay Were duly explained. The impugned orders do not adjudicate the condonation request at all. Ground No.7 - Darpan Registration not a statutory requirement The learned CIT(E) erred in treating non-submission of Darpan registration as a deficiency. Dar-pan registration is not prescribed under Sections 12AB or 80G. Without prejudice, the appellant has applied for Dar-pan reg....
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....rendering the orders unsustainable in law Ground No.12 - Commencement of activities: Contrary to the claim of non-commencement of activities, the appellant has already undertaken substantial steps toward achieving its objectives, including: Compliance with Legal Requirements: The appellant has submitted all relevant documents, including payment receipts, permissions, and construction evidence, and has complied with all requirements of the law. The appellant demonstrated both the genuineness of its activities and compliance with other laws relevant to achieving its objectives, b) Contrary to the finding recorded in the impugned orders that no activities Were carried out since inception, the appellant has commenced its charitable activities. In furtherance of its objects, the appellant provided financial assistance of Rs. 1,75,000/- on 21.07.2025 to YAASKA AGROTECH LLP, a startup venture, as part of its incubation and startup-support programme. The said payment represents application of income for charitable purposes within the meaning of Section 11(1)(a) of the Act. The appellant further submits that the support extended to YAASKA AGROTECH LLP on ....
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....etal ambit. 2. To enable grassroots communities to develop technological solutions by providing essential infrastructure, technical and legal aid. 3. To imbibe and empower innovators with the requisite problem solving skills, inquisitiveness, experimentation, networking, and empowering leadership. 4. To identify innovators in agro-tech field and extend them with essential infrastructural, technical and legal aid. Thus, the assessee company is incorporated with the charitable objects relating to education, innovation, research, entrepreneurship development, startup incubation, skill development and advancement of objects of general public utility on a not-for-profit basis. The company was established with the primary object of supporting students, young innovators and aspiring entrepreneurs by providing incubation support, infrastructure facilities, mentoring, technical guidance and financial assistance on a non-profit basis so as to translate educational learning and research into practical entrepreneurial opportunities. 3.1 The Corporate Identity Number (CIN) of the company is U85300KA2021NPL155189. The assessee company was granted provisional Regi....
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....he assessee trust by selecting the "WITH CONDONATION" option available on the Income-tax portal, and a detailed delay condonation explanation was duly submitted along with the forms which were not considered by the ld. CIT(E). Further, it is submitted that during the course of proceedings, the assessee company filed detailed replies, including a comprehensive reply dated 15.10.2025, explaining the charitable and educational nature of its objects, the incubation model for students and startups, the genuineness of activities, and compliance with applicable statutory provisions. Despite the assessee having filed a detailed reply dated 15.10.2025 explaining the genuineness of its objects and proposed activities along with supporting documents, the impugned order does not refer to or discuss the said reply at all. Further, it is submitted that the Authorized Representative appeared in person on 17.10.2025 before the ld. CIT(E) and submitted documents in support of the applications. This fact has been expressly admitted by the learned CIT(E) in the impugned orders. It is also submitted that during the course of hearing on 17.10.2025, the assessee was orally advised to submit further docu....
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....However, we also observed that in the same sl. No.12 of form 10AB, the assessee had attached notes on activities by named "(MITEFIRST). pdf". Further, before us, the ld. AR of the assessee vehemently submitted that the assessee had already commenced its charitable activities. In fact in furtherance of its objects, the assessee trust provided the financial assistance of 1,75,000/- on 21.07.2025 to YAASKA AGROTECH LLP, a startup venture, as part of its incubation and startup-support programme. The said payment represents application of income for charitable purposes within the meaning of Section 11(1)(a) of the Act. The AR of the assessee further submitted that the support extended to YAASKA AGROTECH LLP on 21.07.2025 was not a commercial investment or profit-oriented funding, but a structured incubation support extended pursuant to the assessee's educational and charitable objects. Before us, the assessee had filed a paper book containing therein the various documents & records including the bank statement which is reproduced below for ease of reference & convenience:- STATEMENT OF ACCOUNT CANARA BANK DATE 03-10-25 16:43:23 PM Account Branch 1333-MANG....
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....16/07/2025 i.e. after the filing of the applications in form 10AB on 23/06/2025 for registration u/s 12AB of the Act & on 02/07/2025 for approval u/s 80G of the Act. Further, we also observed that on 21/07/2025, the assessee company had also spent an amount of Rs. 1,75,000/- & paid the same to one YAASKA Agrotech LLP. The assessee company claimed to have provided the support to enable students and young innovators to establish startup ventures by offering financial assistance along with access to infrastructure facilities such as office space, power, water and internet, which squarely constitutes charitable 'application of income' under section 11(1)(a) of the Act. Thus, we take a note of the fact that as the application/expenditure as made by the assessee company for the first time on 21/07/2025 i.e. during the pendency of the registration/approval proceedings before the ld. CIT(E), & therefore the assessee company had rightly mentioned in the application form No. 10AB that since incorporation, the section 8 company has not commenced any charitable activities. However, we are of the considered opinion that the ld. CIT(E) failed to verify all these facts while rejecting the....
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....bserved that the assessee company had in sl. No.12 of the form 10AB, had attached notes on activities by named "(MITE-FIRST).pdf". Therefore, we find no merits in the contention of the ld. CIT(E). 6.4 Lastly, we are surprised to note that one of the allegation of the ld. CIT(E) in rejecting the form nos. 10AB filed for registration & approval is that the assessee could not furnished the copy of the Darpan registration. Before us, the ld. AR of the assessee vehemently submitted that the assessee Trust has proactively amended its Memorandum of Association and Articles of Association to expressly incorporate all clauses typically expected under the Income-tax Act for charitable institutions, and has also applied for Darpan registration, although the same is not a statutory requirement. Even we failed to understand under which of the provisions of the Act the copy of the Darpan registration is required for granting registration u/s 12AB as well as approval u/s 80G(5) of the Act ? Despite that, the assessee before us submitted a copy of the Darpan Registration certificate dated 10/01/2026 vide Darpan ID- KA/2026/0889069 i.e. obtained after the rejection of the registration & approval....
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....ellant has not carried out any charitable activities. The appellant has already commenced activities and has applied Rs. l,75,000/- on 21.07.2025 towards supporting a startup venture (YAASKA AGROTECH LLP) as part of its charitable incubation programme. The finding is therefore perverse and contrary to record. The appellant further submits that the support extended to YAASKA AGROTECH LLP on 21.07.2025 Was not a commercial investment or profitoriented funding, but a structured incubation support extended pursuant to the appellant's educational and charitable objects, The support was provided to enable students and young innovators to establish startup ventures by offering financial assistance along with access to infrastructure facilities such as office space, power, water and internet, which squarely constitutes charitable 'application of income' under section 11(1)(a) of the Act. The learned CIT(E) erred in failing to appreciate that the appellant has already applied its income for charitable purposes within the meaning of section 11(l)(a) of the Act by extending financial and infrastructural incubation support of on 21.07.2025 to a startup venture pro....
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....CN was ever issued or served. An oral direction cannot substitute a statutory show cause notice, rendering the rejection violative of natural justice. Ground No.9 - Reasonable opportunity of being heard not granted Reasonable opportunity of being heard not being provided, particularly in the context Of Section 80G(5)(iii) of the Income Tax Act, 1961. The learned Assessing Officer did not provide a reasonable opportunity of being heard before rejecting an application renewal of approval under Section 80G. The learned CIT(E) erred in alleging non-appearance on 06.11.2025, when the authority itself was unavailable on 06.11.2025 and 07.11.2025 due to prescheduled meetings, thereby denying the appellant a reasonable opportunity of being heard and vitiating the proceedings. Hence, the finding that no appearance or submission was made is factually incorrect and violates principles of natural justice. The learned CIT(E) erred in alleging non-appearance on 06.11.2025, When the authority itself was unavailable on 06.11.2025 and 07.11.2025 due to prescheduled meetings. The rejection therefore violates the mandatory requirement of reasonable opportu....
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....o enable students and young innovators to establish Startup ventures by offering financial assistance along with access to infrastructure facilities such as office space, power, water and internet, which squarely constitutes charitable 'application of income' under section Of the Act. Ground No.13: The learned Assessing Officer has erred in not considering the facts & grounds correctly while passing the rejection order. Ground No.14: The appellant craves leave to add, to amend and/or alter any of the foregoing grounds and such other grounds as may be urged at the time of hearing, the Appellant prays that * The rejection order passed by the Assessing Officer for renewal of approval under Section 80G be quashed. * The application for approval under Section 80G be allowed. Relief claimed: In view of the facts of the case, the grounds of appeal urged, the settled legal position. and the admitted facts on record, the Appellant humbly prays that the Hon'ble Income Tax Appellate Tribunal may be pleased to: I. Set aside and quash the impugned order passed by the learned Commissioner of Income Tax (....