ASHOK SINGHAL VEDIC NYAS,GURUGRAM V. CIT (EXEMPTION), CHANDIGARH

ITA 1795/DEL/2024

AI Insights

The case involves Ashok Singhal Vedic Nyas, a charitable trust, appealing against the decision of the Commissioner of Income Tax (Exemptions), Chandigarh, which denied them registration under section 12A(1)(ac)(iii) of the Income Tax Act, 1961. The Commissioner had rejected the application on the grounds that the trust did not substantively show activities aligned with the objects stated in their Memorandum of Association (MOA), thus failing to prove the genuineness of their activities. The Tribunal considered various precedents which supported the view that commencement of activities before registration is not mandatory, especially for newly established trusts. The Tribunal decided to remand the case back to the Commissioner for a thorough examination of the trust's objects and activities.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711674 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: misc
• Other Referred Cases: Ananda Social & Education Trust Vs. Commissioner of Income Tax & Anr., Director of Income Tax Vs. Foundation of Ophthalmic & Optometry Research Education Centre, WeVysya Vs. Commissioner of Income Tax (Exemptions)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JITENDER SINGH
• Assessee Lawyers: R. C. RAI
• Keywords: Opportunity of being heard; Charitable institution
• Section: 12A

Judgement Text

"ITA No.1795/Del/2024 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A” NEW DELHI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER AND SHRI M BALAGANESH, ACCOUNTANT MEMBER आ.अ.सं/.I.T.A No.1795/Del/2024 िनधा रणवष /Assessment Year:- ASHOK SINGHAL VEDIC NYAS 4th Floor, M2K Corporate Park, Sector-51, Gurgaon, Haryana. PAN No.AAITA4394B बनाम Vs. CIT (Exemptions), Chandigarh. अपीलाथ\u0014 Appellant \u0016\u0017यथ\u0014/Respondent Assessee by Shri R.C. Rai, CA Revenue by Shri Jitender Singh, CIT DR सुनवाईक\bतारीख/ Date of hearing: 04.06.2025 उ\u000eोषणाक\bतारीख/Pronouncement on 23.07.2025 आदेश /O R D E R PER C.N. PRASAD, J.M. This appeal is filed by the Assessee against the order of the Ld. Commissioner of Income Tax (Exemption), Chandigarh dated 23.02.2024 in denying registration u/s 12A(1)(ac)(iii) of the Act. 2. The Ld. Counsel for the assessee, at the outset, submitted that registration u/s 12A(1)(ac)(iii) of the Act was denied to the assessee by the Ld. CIT(Exemption) on the ground that the assessee failed to substantively show the activities as per the objects of the MOA and therefore the Ld. CIT(Exemption) was of the view that assessee did Printed from counselvise.com ITA No.1795/Del/2024 2 not conclusively prove the genuineness of the activities. Ld. Counsel for the assessee placing reliance on the following decisions submitted that commencement of activities before granting registration is not must: - 1. Ananda Social & Education Trust Vs. Commissioner of Income Tax & Anr. reported in 2020-426-ITR-340(SC); 2. Director of Income Tax Vs. Foundation of Ophthalmic & Optometry Research Education Centre reported in 2013-355- ITR-361(Del); 3. WeVysya Vs. Commissioner of Income Tax (Exemptions) reported in TS-614-ITAT-2025 (Bangalore). 3. On the other hand, the Ld. DR submitted that the assessee has not furnished any relevant document to prove the genuineness of the activities of the trust and therefore the Ld. CIT(Exemption) has rightly rejected the registration u/s 12A of the Act. 4. Heard rival submissions, perused the order of the Ld. CIT(Exemption) and the case laws relied on. On perusal of the order of the Ld. CIT(Exemption) it is noticed that the registration u/s 12A was denied to the assessee for the reason that the assessee could not furnish any documents to substantiate that the assessee has carried out the activities as per the objects of the MOA and thereby do not conclusively prove the genuineness of the activities. It is also the Printed from counselvise.com ITA No.1795/Del/2024 3 observation of the Ld. CIT(Exemption) that the assessee’s financial statements furnished also do not support any performance of any activity by the assessee trust. No expenditure has been incurred in FY 2021-22 and in FY 2020-21 only an amount of Rs.1,72,000/- was spent. Therefore, the Ld. CIT(Exemption) was of the view that in the absence of documents of proving carrying out of the activities of the assessee he was not in a position to determine whether the assessee is genuinely carrying out activities as per its objects. However, we observe that the Ld. CIT(Exemption) appears to have not examined the genuineness of the objects of the assessee as there was no finding as to what are the objects of the assessee and whether such objects of the assessee are charitable in nature or not. Even before us the assessee did not file copy of MOA to ascertain the genuineness of the objects of the assessee. Therefore, we are of the view that this matter should go back to the file of the Ld. CIT(Exemption) who shall examine the objects of the assessee as to whether they are genuinely charitable in nature or not. In so far as the commencement of activities before registration, we hold that in the light of the decisions referred to above there need not be any commencement of activities by the assessee charitable trust especially when formed newly, before granting registration u/s 12A Printed from counselvise.com ITA No.1795/Del/2024 4 of the Act. Thus, we restore this appeal to the file of the Ld. CIT(Exemption) who shall decide the application for registration afresh in the light of our above observations and in the light of the decisions referred to above, after providing adequate opportunity of being heard to the assessee. 5. In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 23.07.2025 Sd/- Sd/- (M BALAGANESH) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 23.07.2025 *Kavita Arora, Sr. P.S. Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "