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Judgment
PER NAVEEN CHANDRA [ACCOUNTANT MEMBER]:
The above captioned appeals are preferred by the assessee against the order dated 30.09.2025 passed by Learned Commissioner of Income Tax (Exemption)-Delhi [hereinafter referred to as ‘ld. CIT(E)], under section 80G of the Income Tax Act, 1961 [hereinafter referred to as, ‘Act’] for registration under section 12AB of the Act.
Since the above captioned appeals were heard together and the facts in issues are identical, all these appeals are being disposed of by this common order for the sake of convenience and brevity
ITA No.7964/Del/2025 :
The ground raised by the assessee are as under :
“1.That the Ld. CIT (Exemptions) erred on facts and in law in rejecting the application for final registration of the appellant u/s 12AB(1)(b)(ii)(B) of the Act.
2.That the Ld. CIT (Exemptions) erred on facts and in law in passing the rejection order in Form 10AD merely on the ground that the objects of the appellant are for the benefits of a specific caste 'Gaur Brahmans'.
3.The appellant craves leave to add, alter, amend or withdraw any ground or grounds of appeal at any time before or during the course of hearing of the appeal.”
Briefly stated the facts of the case are that the assessee filed applications on 27.03.2025 in Form 10AB for registration u/s 12A(1)(ac)(ii) and u/s 80G(5) of the Act. The ld. CIT (Exemption) issued notices and asked to furnish several documents to which the assessee filed its reply by furnishing the documents as called for. Ultimately, the CIT (Exemption) rejected the registration applications vide order u/s 12A and 80G. The assessee is aggrieved and has come in appeal before us.
The learned Counsel for the assessee contested the order of the CIT(E) and following submissions has been made :
“This is an appeal against the order of CIT(E), Delhi, declining assessee the renewal of registration under section 12AB of the Act. The assessee trust is already in existence since many years and was registered under section 12AA, claiming exemption under section 11 all along. After the regime change it got registered under section 12AB with effect from AY 2022-23 to AY 2026-27. Assessee trust applied for renewal of said registration u/s 12A(1)(ac)(ii) as on 03.09.25. In the case under consideration renewal of registration has been denied, by applying the provision of cancellation of registration of trust u/s 12AB(4)(d) which is not permissible under the law. While granting the registration u/s 12AB, the specified authority only has to look into the three limbs as mentioned u/s 12AB(1)(b):
The genuineness of activities of the trust or institutions The objects of the trust or institutions The compliance of such requirements of any other law for the time being in force by the trust or institutions as are material for the purpose of achieving its objects The CIT(E) has denied registration applying the provisions of section 12AB(4), which is applicable only in case of cancellation of existing registration.
"4)Where registration or provisional registration of a trust or an institution has been granted under clause (a) or clause (b) or clause (c) of sub-section (1) or clause (b) of sub-section (1) of section 12AA, as the case may be, and subsequently,-
(d)the trust or institution established for charitable purpose created or established after the commencement of this Act, has applied any part of its income for the benefit of any particular religious community or caste; or" On the very reading of the said section it is clear that for invoking the said provision, the prerequisite is necessary to have a valid registration. The section which had to be applied in the present case was section 12AB(1)(b) and not 12AB(4). Therefore, a registration cannot be denied while implying the provisions of section applicable on already registered trusts. Further, even in section 12AB(4), the CIT(E) had to give a finding that the assessee 'has applied any part of its income for the benefit of any particular religious community or caste', which he has not done. Reliance is placed on:
1)Chandigarh Educational Society Vs. DCIT, ITA No. 225 & 226/Chd/2026, ITAT Chandigarh
2)Blue Wing Educational Society Vs. CIT(Exemption), Chandigarh, ITA No. 609/CHD/2026, ITAT Chandigarh
3)Shri Guru Ram Dass Educational Society Vs. DCIT, ITA No. 224/CHD/2026, ITAT Chandigarh For the same reason 80G renewal has also been denied.”
Per contra, ld. DR relied upon the orders of the ld. CIT(E).
We have given a thoughtful consideration to the order of the CIT (Exemption). We find that the ld. CIT(E) has denied registration applying the provisions of section 12AB(4), which is applicable only in case of cancellation of existing registration. The CIT(E) has also failed to justify the provision in 12AB(4) that the assessee 'has applied any part of its income for the benefit of any particular religious community or caste'. We find that the CIT(E) has reached his conclusion without properly examining the objectives of the Trust. We are therefore, of the considered view that, in the interest of justice and fair play, the ld. CIT(A) should revisit the issue of registration afresh. Accordingly, we restore the issues to the file of the ld. CIT(E) for a fresh adjudication and direct the CIT(E) to accord adequate opportunities of being heard to the assessee. The assessee is also directed to furnish the necessary documents for verification and the ld. CIT(E) is directed to examine the same and decide the issue of registration u/s 12A and 80G after affording reasonable and sufficient opportunities of being heard to the assessee. The grounds are allowed for statistical purposes.
In the combined result, both appeals of assessee ITA Nos.7964 & 7965/Del/2026 are allowed for statistical purposes.