Structured Vedic/Sanskrit courses qualify as charitable education; nominal fees do not imply commerce; Vedic teaching not religious but cultural; registration u/s 12AB/80G granted despite unexecuted objects.

आदेश/ORDER

PER MANU KUMAR GIRI, Judicial Member:

The captioned appeals are directed against the orders both dated 21.03.2025 passed by the Ld. Commissioner of Income Tax (Exemptions), Chennai [“CIT(E)”] rejecting the application filed by the assessee in Form No. 10AB u/s. 12A(1)(ac)(iii) seeking regular registration u/s. 12AB and application filed in Form No.10AB seeking approval u/s.80G of the Income Tax Act, 1961 (“the Act”).

2. Brief facts of the case are that the assessee is a public charitable trust constituted by Trust Deed dated 11.02.2022 with the following objects:

i. Promotion of Samskritam as a language

ii. Educational development

iii. Public health services

iv. Environmental awareness

v. Micro credit

vi. Minorities welfare

vii. Promotion of agriculture and animal husbandry

viii. Promotion of folk arts and culture

The assessee was granted provisional registration u/s. 12A(1)(ac)(vi) on 06.03.2023 valid up to AY 2025-26. It was also granted provisional approval u/s. 80G(5) on the same date.

Thereafter, the assessee applied for regular registration u/s. 12A(1)(ac)(iii) vide Form 10AB dated 12.09.2024 and Form No.10AB seeking approval u/s.80G. The Ld. CIT(E) rejected the both applications on 21.03.2025.

3. The CIT(E) rejected registration mainly on the following grounds:

i. The trust is conducting Vedic/Sanskrit courses in an unorganized manner, which does not fall within “education” as interpreted in the judgments of the Sole Trustee Lok Shikshana Trust v. CIT and New Noble Educational Society v. CCIT.

ii. The trust is collecting fees and showing receipts as “sale of services”, thereby engaging in business activity in the nature of trade or commerce.

iii. Though the objects mention “relief of the poor” and “medical relief”, no such activities were undertaken.

4. Before us ld. AR filed written submissions as under:

APPEAL AGAINST ORDER OF REJECTION FOR REGISTRATION U/S 12AB(1) r.w.s.12A(1)(ac) (iii) OF THE INCOME-TAX AСТ, 1961

Written Submission

1. The appellant (assessee) was constituted by a Trust Deed dated 11.02.2022 with the following objects:

i. Promotion of samskritam as a language

ii. Educational Development

iii. Public Health Services

iv. Environment awareness

v. Micro credit

vi. Minorities welfare

vii. Promotion of agriculture and animal husbandry

viii. Promotion of folk arts and culture

2. The appellant commenced its charitable activities from the FY 2021-22 (AY 2022-23) itself. Income and Expenditure account and Balance Sheet pertaining to the FY 2021-22 are enclosed along with financials for the FYs 2022-23 and 2023-24, to demonstrate commencement of the Trust's charitable activities.

3. The appellant got itself provisionally registered u/s.12A(1)(ac) (vi) of the Income-Tax Act, 1961 (Act) on 06.03.2023 which pertains to the AYs 2023-24 to 2025-26. The appellant Trust also got itself provisionally approved under clause (iv) of first proviso to section 80G(5) of the Act on the same day (06.03.2023). The provisional approval u/s 80G of the Act was granted to the assessee from 06.03.2023 to AY 2025-26.

4. The appellant applied for regular registration u/s 12A(1)(ac) (iii) of the Act, vide application in Form No.10AB on 12.09.2024. This application for registration was rejected by the Ld. Commissioner of Income-Tax (Exemptions), Chennai [CIT(E)], in order dated 21.03.2025. The main reasons for rejection are enlisted below:

A. The Trust is conducting vedic courses in an unorganized way which is against the dictum laid down by the Suprem