Human Welfare Trust vs Commissioner Of Income Tax, (Exemption)

PER SHRI VIKAS AWASTHY, JUDICIAL MEMBER:

These two appeals by the assessee are directed against the orders of Commissioner of Income Tax (Exemption)-Delhi, (hereinafter referred to as 'the CIT(E)'), passed u/s. 12AB and 80G of the Income Tax Act, 1961(hereinafter referred to as 'the Act'), respectively. Both the impugned orders are of even date i.e. 25.03.2026.

Shri Shafiq Khan, appearing on behalf of the assessee submits that the assessee is a charitable trust formed in the year 1994. The assessee was granted registration u/s.12A of the Act in 1995-96. Since, then the assessee has been enjoying benefit of section 12A of the Act without any interruption. The CIT(E) issued show cause notice to the assessee on 06.03.2026 raising multiple queries and gave only six day's time to furnish reply and documents. The assessee filed its short reply on 12.03.2026 with as much documents as possible. The CIT(E) vide two separate orders dated 25.03.2026 rejected registration grant to the assessee u/s.12A of the Act as well as approval u/s.80G of the Act. The Id. Counsel pointed that the CIT(E) has rejected assessee’s registration u/s.12A of the Act and approval u/s.80G of the Act on wrong assumption of facts. The CIT(E) has referred to Human Welfare Foundation to contend that the assessee is providing welfare activities only to Muslim students. The name of assessee and Human Welfare Foundation is quite similar but assessee is a different and distinct organization from Human Welfare Foundation. Further, the CIT(E) has mentioned that the assessee has been receiving anonymous donations. The ld. Counsel pointed that the assessee is not receiving any anonymous donation. The ld. Counsel in support of his submissions referred to Form no. 10B at page 94 of the paper book to contend that in Column 23 Voluntary Contribution, against anonymous donation referred in section 115BBC of the Act, the amount reflected is NIL. He submitted that all donations are received though banking channel and are reflected in the books. During the relevant period, the assessee has received cash donations only to the extent of Rs.50,300/- as against total donations of Rs.63,67,173/-. He further pointed that one of the reason given by CIT(E) to withdraw registration u/s.12A of the Act is that the assessee is associated with Jammat-E-Islami Hind, which was banned owing to alleged anti national activities. The ld. Counsel submits that the assessee and Jammat-E-Islami Hind are two separate independent bodies. Registration u/s.12A of the Act of the assessee cannot be withdraw for the reason that some other organization is not eligible for registration u/s.12A of the Act. In any case the Hon’ble Supreme Court of India in CA No.3960 of 1994 decided on 07.12.1994 has held that there is no material to hold that Jammat-E-Islami Hind is engaged in any unlawful activity. The ld. Counsel reiterated that due to in sufficient time the assessee could not substantiate his submissions before the CIT(E).

Per contra, Shri Om Prakash, representing the department vehemently defended the impugned order and prayed for dismissing appeal of the assessee. The ld. DR submits that a perusal of impugned order would clearly show that the assessee has been providing charitable activities to members of a particular religion. Hence, the CIT(E) rightly rejected benefit of section 12A of the Act as well as approval u/s.80G of the Act.

Rebutting the submissions made on behalf of the Department, the ld. Counsel for the assessee referred to the Board Resolution of the assessee dated 07.02.1995 to contend that the beneficiaries of the trust shall be all people without discrimination on grounds of religion, race, cast, sex or place of birth.

We have heard the submissions made by rival sides and have examined the orders of CIT(E). It is an undisputed fact that the assessee has been uninterruptedly enjoying benefit of registration u/s.12A of the Act and approval u/s.80G of the Act since 1995. The CIT(E) vide notice dated 06.03.2026 had raised certain queries and gave short time of 6 days reply said after taking cognizance of reply of the assessee withdraw assessee’s registration u/s.12A of the Act and approval u/s.80G of the Act.

Considering entire facts of the case and documents placed on record, we are of considered view that sufficient opportunity was not allowed by the CIT(E) to the assesee to make submissions. Thus, there is violation of principles of natural justice. Without commenting on merits, we deem it appropriate to restore the issue back to CIT(E) for fresh adjudication after affording reasonable opportunity of making submissions to the assessee, in accordance with law. The CIT(E) shall decide the issue expeditiously, preferably within a period of six months from the date of receipt of this order.

In the result, impugned orders are set aside and appeals of the assessees are allowed for statistical purpose.