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Judgment
Per Kavitha Rajagopal, J M:
The captioned appeals have been filed by the assessee Trust, challenging the order of the Learned Commissioner of Income Tax (Exemptions) [‘Ld. CIT(E)’ for short], passed u/s. 12A and 80G of the Income Tax Act, 1961 (‘the Act').
As the facts are identical, we hereby pass a consolidated order by taking ITA No.3312/Del/2026 as the lead case.
The assessee has raised the following grounds of appeal:-
“1.That the learned Commissioner of Income Tax (Exemptions), Chandigarh has grossly erred both in law and on facts in rejecting the application for registration of the appellant trust u/s 12A(1)(ac)(ii) of the Act.
2.That the learned Commissioner of Income Tax (Exemptions) has failed to appreciate that, while examining the application under section 12A of the Act, the scope was to merely examine the genuineness of the activities of the trust and compliance with statutory requirements.
3.That order dated 03.03.2026 u/s 12AB(1)(b) of the Act holding that appellant is not entitled to registration u/s 12A of the Act further establishes that impugned order suffers from inherent contradiction and, infirmities both factual and, legal apart from lack of application of mind and, thus such an order is an illegal order, which deserves to be quashed as such.
4.That furthermore the learned Commissioner of Income Tax (Exemptions) has failed to appreciate that, while examining the issue of registration under section 12A of the Act, the scope was to merely examine the genuineness of activities of the trust and, whether they are being carried out in accordance with the objects of the trust and therefore cancellation of registration of the appellant trust is wholly misconceived.
5.That the learned Commissioner of Income Tax (Exemptions) has failed to appreciate that appellant is a charitable trust engaged in charitable activities since the year 1974 and therefore, both in law and on facts, the activities of the appellant trust were genuine and in accordance with the objects of the appellant trust.
6.That several findings of the learned Commissioner of Income Tax (Exemptions) in order dated 03.03.2026 are not based on correct appreciation of facts on record and therefore unsustainable in the eyes of the law.
7.That further findings of the learned Commissioner of Income Tax (Exemptions) are on the basis of assumption, presumption and are not based on correct appreciation of facts on record and therefore unsustainable.
8.That conclusion of the learned Commissioner of Income Tax (Exemptions) that "considered view that the charitable activities of the trust are not independently ascertainable and major funds are being disbursed as donations without demonstrating direct charitable implementation" is factually incorrect, legally misconceived and unsustainable.
9.That further conclusion of the learned Commissioner of Income Tax (Exemptions) that "the application filed in Form 10AB u/s 12A(1)(ac) (ii) of the Act is hereby rejected for the reasons discussed above. This rejection would also supersede any registration granted u/s 12AB of the Act by any authority at any earlier time" is not based on correct appreciation of facts on record and therefore unsustainable.
10.That on the facts and in the circumstances of the case and in law, the impugned order passed by the learned Commissioner of Income Tax (Exemptions) cancelling the registration is invalid and bad in law, as the show-cause notice dated 22.01.2026 initiating the cancellation proceedings did not invoke any clause of the Explanation to Section 12AB(4) in relation to 'Specified Violation'.
11.That various adverse findings recorded in the impugned order are factually incorrect, legally misconceived and untenable
12.That even otherwise the learned Commissioner of Income Tax (Appeals) passed the order without granting personal hearing and sufficient proper opportunity to the appellant and therefore the same is contrary to principle of natural justice and hence vitiated.
Prayer: It is therefore, prayed that the order dated 03.03.2026 passed by the learned Commissioner of Income Tax (Exemptions) be held to be without jurisdiction and, therefore be quashed as such. It be also held that order dated 03.03.2026 u/s 12AB(1)(b) of the Act is illegal, arbitrary, unjustified, malafide and a colourable exercise of authority without application of mind, without granting proper opportunity to the appellant and therefore vitiated.”
The brief facts are that the assessee Trust had filed an application u/s 12A(1)(ac)(ii) of the Act seeking for registration u/s 12AB of the Act which was filed in Form 10AB. The Ld.CIT(E) has sought for details pertaining to the activities along with supporting documentary evidences including the certified copy of the approval of the Trustees for sale of land during AY 2023-24 with all documentary evidences. The assessee submitted that during the FY 2024-25, the assessee Trust has made donation of Rs.7 lakh to Moksha Meditation Welfare Society which was operating old-age homes at Hisar providing food, shelter and nursing facilities to old aged homeless people and for which the said Society had also issued donation receipt along with photograph of the activities. The assessee further submitted that a donation of Rs.1 lakh was made to Iskcon Temple, Delhi, vide receipt dated 31.03.2025 and Rs.51,000/- to Mahila Avam Youth Utpidan Niwaran Manch, Hisar which was for treatment and rehabilitation of mentally retarded women and children; Rs.2,50,000/- was donated to Shree Aggarwal Sewa Samiti, Hisar and Rs.7,00,000/- was donated to Shree Krishan Gaushala Samiti, Siwani the details of which were furnished by the assessee. The assessee Trust has also stated that it is running an old Dharmshala at Delhi which is used for Kirtan, Shok Sabha and other similar social cause for public at large and photographs of Dharmshala were furnished. The Ld.CIT(E) rejected the assessee’s contention stating that the assessee’s surplus for AY 2023-24 was utilised for charitable purpose only to the extent of 11.97% and for AY 2024-25 the utilisation of funds for its charitable purpose was only 73.84%. The Ld.CIT(E) further contended that the assessee has not furnished any direct evidences with regard to the charitable activity carried out by the assessee and had disputed the sale of immovable property which was held by the Trust on the ground that the same was not authorised by majority of the members, for the reason that the resolution authorising certain persons to negotiate and execute the transaction was not filed by the assessee Trust. The Ld.CIT(E) held that the charitable activities of the Trust were not established thereby failing to satisfy the genuineness of its activities and also for non-compliance of the conditions prescribed u/s 12AB of the Act. The assessee’s application in Form 10AB u/s 12A(1)(ac)(ii) of the Act was rejected by the Ld.CIT(E). Aggrieved, the assessee is in appeal before us challenging the order of the Ld.CIT(E).
We have heard the rival submissions and perused the material available on record. The ld. AR for the assessee contended that the assessee had filed various documents before the Ld.CIT(E) which were not considered while deciding the application for registration. The Ld. AR further contended that the assessee is into genuine charitable activities and prayed that once more opportunity be given to the assessee to substantiate its claim before the lower authorities. The Ld. DR vehemently opposed to the same.
On the above facts of the case, we deem it fit to extend the assessee with more opportunity to present its application for registration before the Ld.CIT(E) along with all documentary evidences and the Ld. CIT(E) is directed to examine the same and decide the issue on the merits of the application after duly considering the submission of the assessee in accordance with law keeping in mind the various judicial precedents wherein it has been held that at the time of registration the issues that are to be considered is the object of the Trust and the genuineness of its activities and not make a roving inquiry into issues which are subject matter of assessment, if any. Therefore, the grounds raised by the assessee is hereby allowed for statistical purposes.
In the result, the appeal filed by the assessee is hereby allowed for statistical purpose.
ITA No.3313/Del/2026
As observed above, since the facts of this case are identical, the decision taken in ITA No.3312/Del/2026 would apply, mutatis mutandis, to this appeal also.
To sum up, both the appeals of the assessee are allowed for statistical purpose.