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Judgment
PER SHRI M. BALAGANESH, ACCOUNTANT MEMBER:
The appeals in ITA Nos.3645 & 3646/Del/2026 for AY 2025-26, arise out of the Id. Commissioner of Income Tax (Exemptions), Chandigarh [hereinafter referred to as 'Id. CIT(E)', in short] dated 18.02.2026 for registration of u/s 12AA and 80G of the Income Tax Act, 1961.
We have heard the rival submissions and perused the material available on record. At the outset, we find that the Id CIT(E) had rejected the application of the assessee seeking renewal of registration u/s 12AB of the Act and consequential exemption u/s 80G of the Act, on the ground that the assessee had made investments in certain Non Banking Finance Companies (NBFC) in the form of fixed deposits which is in violation of provision of Section 11(5) of the Act and the donations made to certain institution which are not registered u/s 12AB of the Act. In our considered opinion, the fact of assessee making investments in deposits in NBFC, even if construed to be in violation of provisions of Section 11(5) of the Act would be a subject matter of assessment proceedings and the same cannot be a reason for denial of registration u/s 12AB of the Act. The said transaction of investment in NBFCs cannot be treated by any stretch of imagination that the transactions of the assessee are ingenuine. Hence, the observation made by the ld CIT(E) in this regard are rejected.
With regard to donations made to certain donee institutions, the ld CIT(E) had observed that the donee institutions are not registered u/ 12AB of the Act. The ld AR had downloaded the income tax registration u/s 12AB of the Act of the said donee institutions from the internet and had placed the same in the paper book. The matter is to be examined by the ld CIT(E). Hence, we deem it fit and appropriate to restore this issue to the file of the ld CIT(E) for factual verification. In any event, the same cannot be a reason for denial of registration u/s 12AB of the Act. With these observations, the grounds raised by the assessee in both the appeals are restored to the file of the ld CIT(E) and allowed for statistical purposes.
In the result, the appeals of the assessee are allowed for statistical purposes.