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Judgment
PER VIMAL KUMAR, JM:
The appeals filed by the assessee are against order dated 24.12.2025 of the Ld. Commissioner of Income Tax (Exemption), Chandigarh[hereinafter referred to as “the CIT(E)”] under section 80G and 12A(1)(ac)(ii) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”).
Ld. Authorized Representative for appellant/assessee submitted that Ld. CIT(E) erred in rejecting the applications for renewal of registration u/s 12A and 80G without considering the detailed reply filed by the assessee. Ld. CIT(E) rejected applications despite the fact that there were no adverse findings regarding the aims, objects and genuineness of the activities of the Trust. As per guideline’s notes on accounting issues by the Institute of Chartered Accountants, New Delhi in Rule No. 99 on restricted funds, the assessee had shown detail of assets and liabilities at page No. 30 of the paper book.
Ld. Departmental Representative relied on impugned order.
From examination of record in light of aforesaid rival contentions, it is crystal clear that Ld. CIT(E) rejected applications for registration u/s 12A(1)(ac)(ii) and 80G by observing that the balance sheet of the applicant trust showed that Trust has been consistently transferring substantial amounts to the corpus fund. Since, the donations did not qualify as corpus donations in the eyes of law, the entire foundation for claiming depreciation thereon collapses. Further, the act of reducing income by claiming depreciation on assets funded out of corpus fund casts doubt on the bona fides of the applicant.
The appellant/assessee claimed that without considering reply, impugned order was passed. The applicant by following guideline’s notes on accounting by issued by the Institute of Chartered Accountants Rule No. 99 restricted funds were being used as per aims and objects of the Trust. Details of assets and liabilities are at page No. 30 of the paper book.
In view of above material facts and well settled principle of law, in interest of justice, impugned order dated 24.12.2025 of Ld. CIT(E), Chandigarh are set aside and the matter is restored to the files of Ld. CIT(E) for afresh decision in accordance with law after affording fair opportunity of hearing to the appellant/assessee.
In the result, the appeals filed by the assessee are allowed for statistical purposes.