AI Insights
The case involves the Human Welfare Foundation appealing against the cancellation of its registration under sections 12A and 12AB(4) of the Income Tax Act, 1961, by the Commissioner of Income Tax (Exemptions), New Delhi. The Foundation argued that its activities, which include providing education, medical assistance, and other charitable services, are not limited to any particular religious community but serve the public at large. The Tribunal examined the legal provisions, amendments to the Act, and the activities of the Foundation, ultimately deciding in favor of the Foundation by restoring its registration.
Appeal Details
Counselvise Citation
[2025] 140 COUNSELVISE.COM (IT) 312692 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
CRN Number
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
29-04-2025
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
B
Assessment Year
2021-2022
Judgement Text
" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘B’: NEW DELHI BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.2407/Del/2023 (ASSESSMENT YEAR 2021-22) ITA No.2406/Del/2023 (ASSESSMENT YEAR 2023-24) Human Welfare Foundation, D-3/8, Dawat Nagar Abul Fazal Enclave, Jamia Nagar, New Delhi-110025 PAN-AAATH7672R Vs. DCIT(Exemptions), Circle-1(1), New Delhi. (Appellant) (Respondent) Assessee by Shri Raghu Ram, Adv. Department by Shri Surender Pal, CIT-DR Date of Hearing 27/03/2025 Date of Pronouncement 29/04/2025 O R D E R PER MANISH AGARWAL, AM: This is an appeal filed by the assessee against the order of Commissioner of Income Tax (Exemptions), New Delhi [CIT(E)] dated 28.06.2023 for cancellation of registration granted u/s 12A and u/s 12AB(4) of the Income Tax Act, 1961 (the Act). 2 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) 2. Brief facts of the case are that assessee is a charitable society and is registered u/s 12A of the Act in terms of the Registration No.DEL-HR20013-29052009 dated 29.05.2009. 3. Thereafter, in terms of the amendment made in Section 12A w.e.f 01.04.2021, the assessee applied for fresh registration and was granted registration u/s 12A(1)(ac)(i) of the Income Tax Act, 1961 (the Act) with Unique Registration Number AAATH7672RE20084 dated 23.09.2021. Thereafter, the Ld. CIT(E) received a proposal dated 18.07.2022 wherein the AO requested the CIT(E) for cancellation of the registration granted to the assessee on the various grounds. 4. After examination of the proposals so received by the CIT(E), a show cause notice dated 03.10.2022 was issued to the assessee asking it to explain as to why it should not be held that it had committed specified violation as provided in explanation to section 12AB(4) of the Income Tax Act, 1961. The assessee had made detailed submissions dated 27.10.2022 which is reproduced at pages 4 to 8 of the impugned order and after considering this reply of the assessee, the Ld. CIT(E) further raised queries in terms of the notice dated 10.04.2023. The assessee has finally made reply which is reproduced in para 8 at pages 10 to 12 of the order. Thereafter, the Ld. CIT(E) further sought information vide notice dated 09.06.2023. which were duly replied by assessee vide letter dt. 20.06.2023 wherein the assessee rebutted each and every allegation with regard to specified violation of Explanation (d) to Section 12AB(4) of the Act. The said reply is reproduced at pages 14 to 32 of the order. After 3 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) considering the submissions of the assessee, the Ld. CIT(E)observed that assessee had made specified violation of clause (a), (d) and (e) of explanation to section 12AB(4) and also fo section 13(3) of the Act. Accordingly, the registration granted u/s 12A dated 29.05.2019 is cancelled with effect from AY 2018-19 and further subsequent registration granted u/s 12A(1)(ac)(i) of the Act dated 23.09.2021 is also cancelled w.e.f. Assessment Year 2022-23. 5. Against this order, the assessee has preferred two separate appeals for Asst. Year 2021-22 and Asst. Year 2023-24 wherein the impugned order dated 28.06.2023 canceling the registration granted u/s 12AB(4) of the Act is challenged. As the ld. CIT(E) has by a single order canceled two registrations, first granted u/s 12A with retrospective effect from Asst. Year 2018-19 and further the registration granted u/s 12A(1)(ac)(i) dated 29.09.2021 w.e.f Asst. Year 2022-2023, the assessee in two separate appeals has challenged the retrospective withdrawal of registration as well as cancellation of registration from Asst. Year 2022-23 and onwards. Since, in the separate appeal for Asst. Year 2021-22 in ITA No.2407/Del/2023 both these issues are challenged by the assessee society, therefore, another appeal in ITA No.2406/Del/2023 for Asst. Year 2023-24 challenging same issues being duplicate and thus infructuous accordingly dismissed. 6. In view of the above facts, we proceed to decide the appeal of the assessee for Assessment Year 2021-22 in appeal No.2407/Del/2023. 4 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) 7. The assessee has taken the following grounds of appeal: “1. 28.06.2023 passed by the Id. CIT (E), Delhi, under section 12AB(4) of the Income Tax Act, 1961, cancelling registration granted to the Appellant under section 12A of the Act w.e.f. asst. year 2018-19, is erroneous. illegal and unsustainable on facts and in law. 2. The Id. CIT(E) fell in error by not exercising his mind independently and dispassionately to the alleged violations pointed out by the jurisdictional Assessing Officer. 3. The Id. CIT(E) failed to appreciate that the objects of the Appellant are for public at large and are not confined to any particular religion or community. The Id. CIT(E) ought to have appreciated that the funds required for the carrying on the objects are requested from public at large, and likewise, the funds are spent for the benefit of public at large irrespective of caste, creed or religion 4. The Id. CIT(E) failed to appreciate that the registration under section 12A of the Act and approval under section 80G of the Act as per new provisions applicable, has been granted for the asst. years 2022-23 to 2026-27 after considering the aims and objects and the activities of the Appellant. The Id. CIT(E) further failed to appreciate that the assessing officer has scrutinized the objects and activities of the Appellant in detail for asst. years 2012-13 and 2018-19 and granted the benefit of registration under section 12A of the Act, and therefore in the light of the said position, the proposal of the jurisdictional assessing officer to cancel registration and so also the order of the Id. CITIE are erroneous and unsustainable on facts and in law. 5. The Id. CIT(E) erred in holding that details of contributions received at places other than the head office casts serious doubts on genuineness of the activities of the assessee. The Id. CIT(E) ought to have appreciated that the Appellant raises donations through advertisements in newspapers and magazines with a request to donate directly into its bank account. 6. The Id. CIT(E) failed to appreciate that the Appellant cannot be held responsible if the donors wish to give their details especially when the same are donated though banking channel. The Id CIT(E) further failed to appreciate that the application of the funds was made in transparent manner and therefore genuineness of the activities cannot be doubted. 7. The Id. CIT(E) erred in holding that the benefit of scholarships for UG-PG were applied for a particular religious community violating Explanation (d) to section 12AB(4) of the Act. The Id. CIT(E) failed to appreciate the evidence 5 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) filed by the Appellant with respect to the scholarships awarded to students from other religious community, and in holding that such application was miniscule. 8. The Id. CIT(E) ought to have appreciated that the Appellant calls for applications to the scholarships from all communities and a panel is constituted for screening the eligible candidates for scholarships. The id. CIT(E) erred in not appreciating the fact that the Appellant does not discourage or reject applications for scholarships from other communities, and therefore cannot be attributed with motives that its activities are mainly for a particular community. The finding of the Id. CIT(E) is incorrect and unsustainable on facts and in law in this regard. 9. The Id. CIT(E) erred in doubting the genuineness of the activity relating to relief of poor The Id. CIT(E) ought to have appreciated that the amounts under the head 'relief of poor were spent on various occasions. and certainly was not limited to any particular religious community. 10. The Id. CIT(E) erred in holding that the activity of orphan care program' run by the Appellant is towards a particular religious community is incorrect and unsustainable on facts and in law. The Id. CIT(E) failed to appreciate that such services were made available to other communities as well, the details of which were filed before the ld. CIT(E). 11. The Id. CIT(E) ought to have appreciated that the benefits under orphan care program' is open for all communities and as a matter of fact the benefit was provided to non-Muslims as well. The .d. CIT(E) erred in not appreciating the fact that the Appellant does not discourage or reject this benefit for other communities and this activity is taken up for the benefit of all communities. The finding of the Id. CITE is incorrect and unsustainable on facts and in law in this regard. 12. The Id. CIT(E) erred in holding that the beneficiaries of Nagrik Vikas Kendra' belonged to a particular religious community. The Id. CIT(E) failed to appreciate that list of non-Muslim filed before the Id. CIT(E) clearly establish that the non-muslims have also benefited. 13. The Id.CIT(E) ought to have appreciated that the benefits under Nagrik Vikas Kendra' is open for all communities and as a matter of fact the benefit was provided to non-Muslims as well. The la. CIT(E) erred in not appreciating the fact that the Appellant does not discourage or reject this benefit for other communities and this activity is taken up for the benefit of all communities. The finding of the Id. CIT(E) is incorrect and unsustainable on facts and in law in this regard 6 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) 14. The Id. CIT(E) erred in holding that the beneficiaries of low cost housing' belonged to a particular religious community. The Id CIT(E) failed to appreciate that list of non-Muslim filed before the Id. CIT(E) clearly establish that the non-Muslims have also benefited. 15. The Id. CIT(E) ought to have appreciated that the benefits under Low Cost Housing' is open for all communities and as a matter of fact the benefit was provided to non-Muslims as well. The Id. CIF(E) erred in not appreciating the fact that the Appellant does not discourage or reject this benefit for other communities and this activity is taken up for the benefit of all communities. The finding of the Id. CIT(E) is incorrect and unsustainable on facts and in law in this regard. 16. The Id. CIT(E) erred in holding that the beneficiaries of schools run by the Appellant belonged to a particular religious community. The Id. CIT(E) failed to appreciate that list of non-Muslim filed before the Id. CIT(E) clearly establish that the non-Muslims have also benefited. 17. The ld. CIT(E) ought to have appreciated that the benefits of the schools run by the Appellant is open for all communities and as a matter of fact the benefit was provided to non-Muslims as well. The Id. CIT(E) erred in not appreciating the fact that the Appellant does not discourage or reject this benefit for other communities and this activity is taken up for the benefit of all communities. The finding of the Id. CITE) is incorrect and unsustainable on facts and in law in this regard. 18. The Id. CIT(E) erred in holding that the beneficiaries of free medical camps belonged to a particular religious community. The Id. CIT(E) failed to appreciate that list of non-Muslim filed before the Id. CIT(E) clearly establish that the non-Muslims have also benefited 19. The Id. CIT(E) ought to have appreciated that the benefits of free medical camps is open for all communities and as a matter of fact the benefit was provided to non-Muslims as well. The Id CIT(E) erred in not appreciating the fact that the Appellant does not discourage or reject this benefit for other communities and this activity is taken up for the benefit of all communities. The finding of the Id. CIT(E) is incorrect and unsustainable on facts and in law in this regard. 20. The Id. CIT(E) erred in holding that the beneficiaries of self-employment program and community learning center belonged to a particular religious community. The finding of the Id. CIT(E) is incorrect and unsustainable on facts and in law in this regard. 7 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) 21. The Id. CIT(E) erred in holding that the Appellant had not provided the complete details of cash deposits at AP Chapter, TSS nor the details of fee received at schools. The Id. CIT(E) ought to have appreciate that such details were provided in Annexure 16 filed before him. 22. The finding of the ld. CIT(E) in paragraph 11 of his order are incorrect and unsustainable on facts and in law. The Id. CIT(E) ought to have appreciated that there is not a single instance where the Appellant has discouraged or has rejected the application of an eligible beneficiary, on the ground of caste, creed or religion. The Id. CIT(E) ought to have appreciated that the eligible candidates from other communities who had applied were granted benefit under various activities run by the Appellant, and that if they the eligible candidates from other communities do not approach, the Appellant cannot be found fault with by casting aspersion of bias. For these and other grounds that may be urged with the leave of the Hon'ble ITAT, it is prayed that the appeal may be allowed.” 8. All these grounds of appeal are revolving around two issues: (i) Withdrawal of registration granted u/s 12A with retrospective operation from AY 2018-19; and (ii) cancellation of registration granted u/s 12A(1)(ac)(i) of eh Act w.e.f. AY 2022-23 and onwards. 9. In this regard, the Ld. AR of the assessee submitted that the assessee was granted registration u/s 12A as a charitable society and is carrying on activities in accordance with the objects of the society since inception. The Assessing Officer in its proposal as well as the Ld. CIT(E) in its order withdrawing the registration u/s 12A alleged that assessee society had violated the provisions of section 13(1)(b) and explanation to section 12AB(4) of the Act since it had applied the income for a particular community. While alleging so, the ld. CIT(E) has failed to appreciate the fact that assessee is a charitable society and providing various charitable activities such as running schools, 8 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) providing scholarship to poor students, providing free food etc. Since its offices are situated at the place where population of a particular community i.e. Muslims were the dominant residents, therefore, the major benefit were gone to the residence belonging to such community. The appellant society never intended to apply its income only for the benefit of a particular community. He further submitted that the assessments of the assessee society were completed u/s 143(3) for Assessment Year 2012-13 and 2018-19 where under identical facts, the activities of the assessee society were not doubted. The Ld. AR further submits that the section 12AB(4) of the Act was inserted the Finance Act w.e.f. 01.04.2022 and, therefore, is applicable from Assessment Year 2022-23 and onwards and could not be applied with retrospective effect, therefore, the cancellation of registration u/s 12A of the appellant society w.e.f. Assessment Year 2018-19 applying the provisions of section 12AB(4) is not in accordance of law. Accordingly, ld. AR humbly prayed that the action of the Ld. CIT(E) in cancelling the registration from Asst. Year 2018- 19 be struck down and the retrospective cancellation of registration u/s 12A be withdrawn. 10. On the other hand, the Ld. CIT-DR vehemently supported the order of Ld. CIT(E) and submitted that the assessee society has violated the provisions of section 13(1)(b) of the Act and also made specified violation of clause (a), (d) and (e) of Explanation to Section 12AB(4) of the Act, therefore, the Ld. CIT(E) has rightly withdrawal 9 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) the exemption w.e.f. Assessment Year 2018-19 and, he prayed for the confirmation of the order of Ld. CIT(E) in this regard. 11. We have heard the rival submissions and perused the material available on record. In the instant case the assessee was registered u/s 12A vide order dt. 29.05.2009 which stood cancelled by impugned order w.e.f. AY 2018-19. Further registration granted u/s 12A(1)(ac)(i) dt. 23.09.2021 is also cancelled w.e.f. AY 2022-23. Therefore, we first decide the issue whether the registration granted u/s 12A can be withdrawn with retrospective effect. 12. Through Finance Act, 2021 and Taxation and Other Law (Relaxation and Amendment of Certain Provision) Act, 2020, major changes were made with regard to the trust or institution registered under section 12AA of the Act where they were required to re-register itself before the specified dates provided u/s 12A(1)(ac) of the Act and sunset clause has been inserted under section 12AA(5) w.e.f. 01.04.2021 and new section 12AB has been inserted. Thereafter, vide Finance Act 2022 sub-section (4) of section 12AB was substituted w.e.f. 01.04.2022, according to which where registration has been granted u/s 12AB (1) or 12AA(1) (b) of the Act, the said registration can be cancelled only if subsequent to the registration, the Principal Commissioner or Commissioner notices one or more specified violations during any previous year or receives a reference from the AO under proviso to Section 143(3) of the Act or the said case has been selected in accordance with risk management strategy, 10 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) formulated by the Board. At this juncture for the sake of convenience, the provisions of 12AB(4) are reproduced as under : “(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,— (a) the Principal Commissioner or Commissioner has noticed occurrence of one or more specified violations during any previous year; or (b) the Principal Commissioner or Commissioner has received a reference from the Assessing Officer under the second proviso to sub-section (3) of section 143 _ for any previous year; or (c) such case has been selected in accordance with the risk management strategy, formulated by the Board from time to time, for any previous year, the Principal Commissioner or Commissioner shall, — (i) call for such documents or information from the trust or institution, or make such inquiry as he thinks necessary in order to satisfy himself about the occurrence or otherwise of any specified violation; (ii) pass an order in writing, cancelling the registration of such trust or institution, after affording a reasonable opportunity of being heard, for such previous year and all subsequent previous years, if he is satisfied that one or more specified violations have taken place; (iii) pass an order in writing,, refusing to cancel the registration of such trust or institution, if he is not satisfied about the occurrence of one or more specified violations; (iv) forward a copy of the order under clause (ii) or clause (iii), as the case may be, to the Assessing Officer and such trust or institution. Explanation.—For the purposes of this sub-section, the following shall mean \"specified violation \": (a) where any income derived from property held under trust, wholly or in part for charitable or religious purposes, has been applied, other than for the objects of the trust or institution; or 11 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) (b) the trust or institution has income from profits and gains of business which is not incidental to the attainment of its objectives or separate books of account are not maintained by such trust or institution in respect of the business which is incidental to the attainment of its objectives; or (c) the trust or institution has applied any part of its income from the property held under a trust for private religious purposes, which does not endure for the benefit of the public; or (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 (e) any activity being carried out by the trust or institution,— (i) is not genuine; or (ii) is not being carried out in accordance with all or any of the conditions subject to which it was registered; or if the trust or institution has not complied with the requirement of any other law, as referred to in item (B) of sub-clause (i) of clause (b) of sub-section (1), and the order, direction or decree, by whatever name called, holding that such non-compliance has occurred, has either not been disputed or has attained finality”. 13. Prior to this amendment, cancellation of registration of any trust or institution can be made only in case where activities of such trust or institutions were not found genuine or not being carried out in accordance with objects of trusts or institutions. It is with the Finance Act, 2022, registration u/s 12A can be cancelled if any specified violations occur. Further, reference by AO PCIT or CIT for withdrawal of registration on specified violation has been inserted by substituting the Second proviso to section 143(3) of the Act w.e.f. 01.04.2022. 12 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) 14. As observed above, provisions for cancellation of registration for specified violation are inserted in section 12AB(4) of the Act w.e.f. 01.04.2022 and would accordingly apply prospectively being penal provision. Hon'ble Madras High Court in the case of CIT v. Kumudam Endowments [2001] 117 Taxman 716/242 ITR 159 (Madras) held as under: “It is well settled law that a person, who has complied with the law as it exists, cannot be penalized by reason of the amendment to the law effected subsequently, unless such intention is expressly stated and the imposition of such penalty is not contrary to any of the provisions of the Constitution. The argument that the assessee should be denied the exemption for the earlier AY when it had not contravened the law, because it had been found to have contravened the law in subsequent AY cannot be accepted. It is assessment year with which the assessment is concerned, and it is the eligibility of the assessee with reference to the law applicable in the year that is required to be looked into.” 15. 1In the case of Isthmian Steamship Lines reported in 20 ITR 572 (SC) the Hon'ble Supreme Court has held that \"it is a cardinal principle of the tax law that law to be applied is that in force in the assessment year unless otherwise provided expressly or by necessary implication\". 16. The Hon’ble Rajasthan High Court in the case of Indian Medical Trust v. PCIT reported in [2019] 414 ITR 296 (Rajasthan) held as under: “undisputably, the order dated 16th Jan, 2018, made by the Commissioner of Income Tax thereby cancelling the registration 13 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) granted under section 12A and withdrawing the approval given under section 10 (23C) (v) & 10 (23A) (via) of the Act of 1961, to the petitioner Trust with retrospective effect from the date of 01st April, 2006, was arbitrary in the face of the provisions of the Act of 1961; and therefore, cannot be deemed to be in consonance with any possible interpretation to be valid or legal. This court is of the opinion that the provisions of section 12AA (3) of the Act of 1961, empowers the Commissioner of Income Tax to initiate steps for cancellation of the registration of a Trust, but, the legislation had no intention of giving the said provision, a retrospective effect. For in such a situation, the same would have been clearly specified in the said provision. Interpretation of the said provision has to be harmonious rather than being prejudicial to the institutions as it would instigate and create a fear of the Income Tax Department. I find support in my opinion from the following cases with reference to the issue of cancellation or withdrawal of registration with retrospective effect: 17. The CBDT vide circular no. 11/2022 dt. 03.06.2022 explain the amendment and clearly observed that these amendments are effective from 1.4.2022, it reads as under: “Finance Act, 2022 has inserted sub-section (4) in section 12AB of the Income-tax Act, 1961 (the Act) allowing the Principal Commissioner or Commissioner of Income-tax to examine if there is any \"specified violation\" by the trust or institution registered or provisionally registered under the relevant clauses of sub- section (1) of section 12AB or subsection (1) of section 12AA. Subsequent to examination by the Principal Commissioner or Commissioner of Income-tax, an order is required to be passed for either cancellation of the registration or refusal to cancel the registration. Similar provisions have also been introduced in clause (23C) of section 10 of the Act by substituting the fifteenth proviso of the said clause with respect to fund or institution trust or institution or any university or other educational institution or any hospital or other medical institution referred under sub- 14 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) clauses (iv), (v), (vi), (via) of this clause and which have been approved or provisionally approved under the second proviso to the said clause. These amendments are effective from 1st April, 2022. In addition to the specified violations referred above, the power of cancellation has also been granted under subrule (5) of rule 17A and sub-rule (5) of rule 2C of the Income-tax Rules, 1962 (the Rules) to the Principal Commissioner or Commissioner authorised by the Board. This Circular only relates to cancellation of registration/approval or provisional registration/approval in the case of \"specified violation\". 18. The coordinate bench of Mumbai ITAT in the case of Heart Foundation of India in ITA No. 1524/Mum/2023 vide order dt. 27.07.2023 has also expressed the same view. 19. In view of the above discussions and considering the amendment in section 12AB(4) made by Finance Act, 2022, CBDT circular No. 11 of 2022 and the judicial pronouncements of various Hon’ble high courts and co-ordinate benches of tribunal, we are of the view that the registration granted u/s 12A cannot be cancelled with retrospective effect from AY 2018-19 when the CIT was granted power to cancel w.e.f. 1.4.2022, thus the same can be done from AY 2022-23. It is also observed that the PCIT has invoked the explanation to section 12AB(4) to hold the assessee committed \"specified violations,\" particularly in terms of application of income and genuineness of the activities. As the Finance Act, 2022, introduced the concept of \"specified violations\" under section 12AB(4), became effective only from April 1, 2022. Accordingly, order of ld. CIT(E) in cancelling the registration granted u/s 12A of the Act to the assessee society from AY 2018-19 is set 15 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) aside and registration u/s 12A to the assessee is restored. The ground of appeal No. 1 of the assessee is allowed. 20. Now coming to the second issue i.e. withdrawal/cancellation of the registration w.e.f. Asst. Year 2022-23 granted u/s 12A(1)(ac)(i) of the Act vide Unique Registration Number AAATH7672RE20084 dated 23.09.2021. The grounds of appeal No.2 to 22 taken by the assessee are in relation to the withdrawal of exemption from Assessment Year 2022-23. Since all these grounds of appeal are interconnected and related to the issue of challenging the order of the ld. CIT(E) cancellation of registration granted u/s 12A(1)(ac)(i) of the Act, the same are dealt with together. 21. Briefly stated the facts are that the Ld. CIT(E) invoked the clause (d) of explanation of 12AB(4) on account of allegation that assessee has applied its income for the benefit of a particular religious community. The ld. CIT(E) further invoked clause (a) of explanation of 12AB(4) by alleging that assessee has applied its income for the benefit of a particular religious community and thus has deviated from its stated aims and objectives. Ld. CIT(E) has also invoked clause (e) of explanation to section 12AB(4) by alleging that the assessee has filed to prove the genuineness of the activities undertaken. It is seen that the AO made proposal for cancellation of the registration wherein it is mainly alleged that the assessee trust is providing benefits to a particular religious community. The assessee society claimed that since inception, it is working in the same area 16 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) and carried out similar kind of charitable activities. The revenue in the earlier assessment years where the assessments were completed u/s 143(3) never doubted the genuineness of the activity of the assessee which are in consonance to its objects. Further the income was also applied in the same manner as was applied in the year under consideration. 22. The Assessing Officer in terms of the letter dated 18.07.2022 has made a proposal for cancellation of the registration granted to assessee society on the grounds which are reproduced in pages 2 and 3 of the order as under: “i. The assessee claimed that it had distributed Special scholarships under the Education Scheme during this period to students who want to pursue their education in nationally or internationally prestigious institutions. However, it has been noticed that all the beneficiaries belong to a particular religious community. ii. The assessee claimed that it had distributed scholar ship under the Education Scheme to the students of UG/PG for pursuing social science subjects during this period. However, it has been observed that the assessee society has given the Scholarship primarily to members of a particular religious community which is against the Objective of trust. iii The assessee (HWF) claimed that it had awarded the students for their academic excellence under the Education Scheme. However, it was found that the assessee's society has given this scholarship to a particular religious community without keeping the record of toppers. The Aadhar /PAN details have also not been submitted by the assessee. iv. The assessee (HWF) claimed that it had distributed the school bags to the students under the Education Scheme. Further, the assessee society has also shared details of students ie, name, age etc. but has not shared the details of Aadhar Number. Again, It is important to note that all the students belong to a particular religious community. v. The assessee (HWF) claimed that it had organized various medical camps for medical assistance in slum areas on regular/periodic basis 17 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) during this period. The said medical camps were organized in various locations in conjunction with some other organizations. However, the list of beneficiaries is not complete but whatever details have been shared shows that the beneficiaries belong to a particular religious community. vi The assessee (HWF) claimed that it had has conducted free Vaccination camps in collaboration with Delhi Govt. Vaccination camps were conducted in Uttar Pradesh also. Subject has shared neither evidence of expenses towards its activities nor the complete list of beneficiaries along with Aadhar/PAN. A general list with beneficiaries belonging to a particular religious community was furnished. vii. The assessee (HWF) claimed that it had has provided support to 13 poor patients who were not able to afford medical cost and reimbursed the cost which was incurred for the purchase of medicines. The list of the 13 patients was shared, who belong to a particular religious community. Further, names of the patient were not supported with valid Id proof in order to know whether they were the real beneficiaries or not. viii. The assessee (HWF) claimed that it had undertaken drinking water projects in certain areas of the country, Subject has not shared the list of total expenses incurred towards drinking water projects nor TDS details while making the payment to contactors. However, this facility of drinking water was also extended to a particular religious community. ix. The assessee (HWF) claimed that it had launched a project of construction of low cost housing. It has involved the local contractors to construction these houses. The assessee has shared the name of direct beneficiaries which belongs to a particular religious community but the assessee has not shared the PAN/AADHAR number of these beneficiaries. x. The assessee (HWF) claimed that it had identified some villages and slum areas where education facilities were not available or available with very low infrastructure. The assessee has provided support for establishing 6 Community Leaning Centers. The list of beneficiaries had been shared which all belong to a particular religious community. xi. The assessee (HWF) claimed that it had organized the Nagrik Vikas Kendra (NVK) which works as a bridging agency between different Government departments and the people to avail the benefit of Government schemes. It had been requested to share the name of beneficiaries along with evidence of address proof i.e. PAN/Aadhar. A general list of beneficiary was shared who belong to a particular religious community without the evidence of address proof of beneficiaries. 18 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) xii. The assessee (HWF) claimed that it had started the relief project for slum areas where foods grains have been distributed to the poor. It also claimed that its society is running the programme which is in line with UN Sustainable Development Goals. However, it has been noticed that assessee society has distributed the food packages during the festival of Ramzan. Further, assessee had shared the list of beneficiaries who belong to a particular religious community. xiii. The assessee (HWF) claimed that it had provided education support to orphan children. List of orphans was also shared for its claim for support. All the beneficiaries in this list belong to a particular religious community.” 23. Thereafter, the Ld. CIT(E) has issued various notices and after considering the replies of the assessee filed from time to time, had hold that the assessee has violated the specified provisions as provided in Explanation (a), (d) and (e) of Section 12AB(4) and cancelled the registration granted u/s 12A(1)(ac)(i) of the Act w.e.f. AY 2022-2023. 24. Before us, the Ld. AR argued that before the Ld. CIT(E), assessee society has made pointwise rebuttal of all the allegation made by the AO in its proposal as well as by Ld. CIT(E) vide show cause notice for withdrawal of the application. He primarily relied on such submissions which are as under: “Respectfully we are submitting reply to the letter referred to above as a show cause notice for the alleged violation of the provisions of explanation (d) of section 12AB (4) of the Income Tax Act. 1961 Your letter is based on the report of Jurisdictional Assessing Officer (JAO) saying that we applied our income for the benefit of a particular religious community. At the outset we assert that this finding of the JAO is incorrect as we apply income for the benefit of all the communities. Earlier during the course of our investigation is 131 (14) of the IT Act we submitted huge amount of information and documents and it appears that the JAO missed to notice proof of our unbiased activities in the records already made available by us. There is a possibility that we could not 19 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) submit some portion of the data owing to paucity of time available to us as we were originally required to submit information relating to eight years and then for detailed information of three years in a brief period of time. However, the proofs which we are now submitting are mostly from the data and documents made available during the aforementioned investigation/assessment and it is strange the concerned personnel failed to verify these themselves and arrived at a wrong conclusion In haste Before presenting our pointwise replies to the various aspects of our application of income reported to you by the JAO, we are submitting some aspects for your consideration. Paragraph 4 of your letter This paragraph is the summary of the reports of the JAO and we are submitting our comments on this. The para reads as under: \"The Assessee is running a Trusts whose activities are different from its stated aims of working for the all-round development of the impoverished irrespective of any caste, creed or religion. As discussed above all beneficiaries belong to a particular religious i.e. Muslim community only which violates provisions of 13(1) (b) and covered by specified violation as per provisions of explanation (d) of section 12AB(4) (of the Act.\" [Stress added by highlighting words only 'all' and 'Muslim Community only \"] The contention of this paragraph is that the stated objective of the Society is in consonance with the definition of the word charity in the Act. So, the provisions of section 13(1)(b) of the Act is not relevant here as that sections deals with an \"institution is created or established for the benefit of any particular religious community of caste.\" So, if the creation or establishment of any institution is not for any particular community or caste this section is not related to that, as in our case. Our submission is that section 13(1)(b) relates to objects of an institution and the explanation (d) of section 12AB(4) [of] the Act is concerned with application of income. As regards application of our income the contention that \"all\" incomes have been applied for the benefit of \"Muslim community only\" is not true, as we are submitting herein under Application of Our Income Our major round the year activity is relating to education. We are running schools by either adopting existing facilities and developing the same or getting lands on lease and constructing school buildings. We are perusing CBSE/State curriculum open to all communities. Our school in Guwahati 20 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) has got CBSE affiliation and is running up to high schools with considerable students belonging to non-Muslim communities too. In other cases, we have applied for the registration and our applications are in various stages of registration processes. POINTWISE REPLIES Regarding Scholarships We provided scholarships both under special and general categories. The report of the JIO says that all the beneficiaries belong to members of a particular religious community. This inference is incorrect. We are providing list of students who does not belong to this particular religious community along with their ID proof and copies cheques through which payments were made to them, marked as Annexure 1. Regarding Educational Awards The report of the JAO that all the beneficiaries belong to one particular religious community' is unfounded as is evident from the list of student's names, with father names, Schools names, photographs and receipts which is enclosed, marked Annexure-II. Regarding Distribution of School Bags Strangely the JAO has reported to you that 'all the students belong to a particular religious community' whereas it is not so. We provided school bags to members of other communities also as shown in Annexure-III It may be noted that the content of this Annexure is part of our submissions already made at the time of replies to notice u/s 131(1A) of IT Act. It is true that we did not ask for Aadhar or other 1 Card for the applications received. However, we have collected ID proofs of some of these beneficiaries and photographs are also attached in the annexure as above. Regarding Medical Camps We are providing list of some of the beneficiaries of other religious communities as Annexure-IV. This proves the contention of the JAO wrong. This list is also part of the list already provided against submissions is 131 (1A). It is true that we did not collect Aadhar or any ID before giving medical benefits of check up by doctors and medicines. It is neither feasible nor advisable to go for such detailed documentations amongst hundreds of needy persons who assemble at each camp. The size of the task may be assessed from the fact that the list we have already provided runs into more than six thousand patients. Now we have collected some Aadhar cards, for your perusal, from the patients who were served and included in the annexure as above. Regarding Vaccination We facilitated a free vaccination camp organised by Delhi Government. There was no out of pocket expenses on our part as we assisted in the form 21 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) of publicity, space, and volunteers. All the documents were collected by the Government staff. However, we took copy of their register and provided in investigation u/s 131 (1A) a copy of the same. We are submitting, marked as Annexure V. a list of vaccinated persons belonging the other community, other than that referred to in your letter. We have also indicated the references of page numbers and serial numbers from the copy we submitted in assessment u/s 1319(1A) of the IT Act. Regarding Medical Support to poor patients The JAO reported that out of 13 poor patients we did not provide ID proofs for verification. We are enclosing ID proofs of some of these beneficiaries as Annexure- VI. In support of our behavior in this regard and the recognition of our services by district authorities we are submitting as Annexure - VII, documents, including ID proofs relating to such services done after reference by the district authorities. The photographs include that of District Magistrate and Additional District Magistrates of South East Delhi Regarding Drinking Water Projects We installed drinking water facilities through contractors after TDS, The costs of this services are appearing in the audited accounts already submitted during the investigation. As regards the report that 'facility of drinking water was...extended to a particular religious community' we submit that it is not true. Drinking water facilities, like hand pumps, are meant for communities and it is not possible to ID proofs from members of the community being benefited. Alternatively, we approached community leaders for confirmation of these facilities for submission to you. The letters from local leaders on their letter-heads are self-explanatory showing that we have no bias in providing our services and that the facilities we provided are functioning well even on date after several years of their installation. We are also submitting proof of payments to contractors with TDS photographs of some of the projects conducted by us, marked as Annexure- VIII Regarding Project for Low-Cost Housing We are submitting photographs of house constructed and the condition before the construction, ID copy, copy of cheque, receipts by the beneficiary and thanks letter by a lady who does not belong to the religious community referred to in your letter, marked as Annexure-IX Regarding Community Learning Centres We constructed community learning centres in very poor localities with single teacher facility. The facilities are open to all. However, children belonging to the community referred to in your letter have only joined. They are poorer than others in those localities. No one who wants to join has been refused, nor shall be returned. 22 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) Regarding Nagrik Vikas Kendras We have created several centres as Nagrik Vikas Kendra spread across India wherein we collect information about government-sponsored schemes and share the same to visitors. These are in the nature on enquiry and guidance centres wherein we do not give any pecuniary or non-pecuniary benefit to any person. We never felt it necessary to collect PAN/AADHAR numbers of visitors. Now on your insistence we have approached some of those persons and are submitting herewith the information in respect of persons belonging to other communities, marked as Annexure- X. Regarding Hunger Relief We are working for hunger removal too. A scheme for hunger removal is run in bigger scale in the month of Ramazan as fund flow is better therein. However, we do not restrict the beneficiaries to any community and have been providing rations-kits to the needy without any bias. We are enclosing list of such beneficiaries from other communities, marked as Annexure-XI. This information is part of our submissions during the course of investigation u/s 131(14) and we have cross reference of those submissions. Further, we added additional names with IDs and photographs of distribution of the ration kits. These photographs include the cases of distributing the kits from Mandirs, as a central place from which distribution to the needy in non- Muslim areas were done, involving community and religious leaders. Regarding Education Support to Orphans JAO reported, \"all the beneficiaries in this list belong to a particular religious community.\" We are submitting list of six students belonging to other communities, marked as Annexure-XII. This number has been increasing over the years, as shown in the list. IDs of the beneficiaries are also submitted. Other Activities We are submitting proof of our application of income for construction of toilets to families against applications stating that houses of the applicants do not have toilets. Copies of eleven such applications, cheques paid and IDs are enclosed, marked as Annexure XIII. Their religious identities are obvious and these obviate the impression created by the JAO Our main and routine activity comprises education related services and we are working in different areas of the country through school curriculum, as described above. We are submitting for your perusal details regarding teachers and students belonging to communities other than the one referred to by the JAO, marked as Annexure-XIV Sir, our submissions as above clearly establish that our applications of incomes are in accordance with the aims and objects of bringing all round development to the Impoverished irrespective of any caste, creed or religion, 23 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) as stated in our Society deed with which the Department of Income Tax gave us registration u/s 124/12AA and continued the same in its renewal. In view of above submissions, we request you to oblige us by passing an order u/s 12AB (4)(ii) in our favour.” 25. Thereafter, the assessee vide letter dated Nil provided financial statements of various years and further filed necessary details of activities carried during this period. Further in the said letter, assessee society explained the activities carried out for charitable purposes, the reply so made is as under: “This is with reference to your letter F. No. CIT (E)/HQ/12AB (4)/HWF/2023-24/67/CIT (E)/HQ/12AB (4)/HWP/2022-23/1131 dated 03.10.2022 and our reply dated 12. 10.2022 and as you further required information from us, we are hereby enclosing point wise reply as below:- i. Financial statements attached for the financial Year 2017-18 to 2021-22, (Annexure la to Annexure le) ii. Details of activities attached for the financial Year 2017-18 to 2021-22, along with ledger accounts for the expenses incurred. (Annexure 2a, 2b). iii. Details of employees of the society attached including their name, qualification, amount of salary, designation and role assigned to them. (Annexure 3) iv. Details of Bank accounts and copy of Bank statements attached for the financial Year 2017-18 to 2021-22. (Annexure 4a to Annexure 4y) v. Details of donation received and given in cash attached in prescribed format for the financial Year 2017-18 to 2021-22. (Annexure 5a to Annexure 51) vi. Details of donation received and given (other than cash) attached for the financial Year 2017-18 to 2021-22 in the prescribed format. (Annexure 6) vii. Copy of Cash Book and Bank Book attached for the financial Year 2017- 18 102021-22. (Annexure 7) viii. Scholarships are given to UG/PG students pursuing social science subjects, for giving the scholarship, the HWF calls for application from students through social media and website, shortlists the applicants based 24 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) on the marks obtained in last exams, and their need based on family financial background. After interviews and thorough verification of documents and information provided by the shortlisted applicants. selection committee finalizes list of students to whom scholarship will be given. Along with application students are providing mark list of qualifying examination, id proof, admission proof, and declaration about the financial condition of the family. Scholarships are distributed to students in public programs. Attached (List of students who have been awarded scholarships, amount paid to them and confirmation from awardees), for the financial Year 2017- 18 to 2021-22. (Annexure 8a to Annexure 8g) ix. We have not published any paid advertisement for scholarship schemes in print and electronic media, x. Conditions with the scholarship attached. (Annexure 10) xi. In some photographs of drinking water project, it has been mentioned that the project is sponsored by some person/entities. Actually, it is not sponsorship. II's donation. Some of our donor donate us in memory of someone who meant a lot to them to honor and cherish the memories they have left behind. It is a great way of showing their love and respect. We just put name of their beloved one on their supported projects, attached details of such projects along with corresponding expenses. (Annexure 11) xii. In our last reply dated 17/10/2022, a copy of bill from Blue Skies Tour & Travels Pvt. Ltd., which was not legible, now attached a legible copy of the bills in respect of the above entity. Regarding foreign travel, Ms Daya Aruna research scholar in department of Hindi, Jamia Milia Islamia, New Delhi, want to attend 25th European Conference on South Asian Studies (ECSAS) Paris, France. Conference was self- sponsored. She was poor Dalit woman research scholar, and approached to Human Welfare Foundation for financial assistance, then HWF has arranged her flight tickets for Paris. Mr Rizwan Ahmad Rafeequi has been visited Colombo, Sri Lanka, during 27/04/2018 to 30/04/2018 for the study of orphan care scholarship program. (Annexure 12) xiii. Human welfare foundation supports needy persons, so that they can have a house to live in. For this, HWF identify persons to be supported from different part of country, especially flood hit area. The HWF, mainly get the low-cost house constructed by third party contractor at the land of the person identified. Contractors are submitting bills to the HWF and get paid. Bills for the houses are directly paid to contractor by the foundation. HWF takes photograph during progress of the work till handing over the key to the beneficiaries. In few cases, if it is not possible for the foundation of arrange contractors, in those cases amount decided are paid to the beneficiary. The photographs before construction, during construction, and 25 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) after construction is taken by the foundation to ensure that amount has been used for the purpose of construction of house for beneficiary, HWP is receiving applications from individuals along with id proof, land document, and details of family members and financial position. Applications are verified on the order of applications received and beneficiaries are selected giving priority for widows, physically or mentally challenged persons, and senior citizens. Details of low-cost houses built by the society along with list of beneficiaries and expenses incurred. attached for the financial Year 2017- 18 to 2021-22. (Annexure 13) xiv. There are various government schemes launched for the benefit of socially backward people. Many socially and educationally backward people are missing such benefits because of not having the knowledge about the schemes, how to apply for them, or not having the sufficient document for applying. Nagrik Vikas Kendra (NVK) works as a bridging agency between different government departments and the downtrodden people to avail them the benefit of such government schemes. Such Government schemes include Ghar Souchola Minority scholarship to poor meritorious, Begham Hazrat Scholarship, BPL Rashun Card, Sukunya Smridhi Yojna, Old age pension, PM Kisan Samman Nidhi, PMAY etc. NVKS are not only creating awareness among the masses but support the beneficiaries until they receive the final output in the form of money or document. Some of the people are not having basic documents for applying for the schemes. NVKs also help them make Aadhar, ration cards, bank account, etc. Attached List of 39 Nagrik Vikas Kendra in 12 states, list of beneficiaries and corresponding expenses for the financial Year 2017-18 to 2021-22. (Annexure 14) xv. Details of community learning centers supported by the society along with details of beneficiaries and corresponding expenses, attached for the financial Year 2017-18 to 2021-22. (Annexure 15) xvi. Details of additions to capital assets along with details of expenses, source of fund and copy of contract for construction work, attached for the financial Year 2017-18 10 2021-22 (Annexure 16 to Annexure 16ah) xvii. Details of schools run by society along with fee structure, list of students and copy of approval of govt. authorities, attached for the financial Year 2017-18 to 2021-22 (Annexure 17) xviil. Annual reports of the trust, attached for the financial Year 2017-18 το 2021-22 (Annexure 18) 26 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) Hope above information/details are in line with required information in case any further query related to information submitted pls let us know so that it could be submitted.” 26. Finally assessee vide its letter dated 20.06.2023 has made a detailed submission controverting the allegations made and explaining the fact that the income of the appellant society was solely applied for charitable activities for all communities without any discrimination, the reply so made is as under: \"Before furnishing the para-wise desired information, we want to bring the vital facts before your good-self for your kind consideration before you decide the issue. A) The above-named Society was established vide Society Deed dated 04.12.2008 under the name & style of \"Human Welfare Foundation\" with the purpose of promoting the overall upliftment of downtrodden countrymen by working towards the all-round development of the impoverished (poor), irrespective of any caste, creed or religion. The objects have been elaborated at clause-III with its sub-clouses (a) to (e) as well as Funds & Properties for achievement of the above objects at clause IV in the Society Deed dated 04.12.2008. copy of the Society Deed is enclosed marked as Annexure-1 The objects as stated at clause III of the said Society Deed are reproduced herein below for your kind perusal:- \"III. AIMS AND OBJECTS OF THE TRUST The society shall be a public charitable trust, the income whereof is exempt from ta w/section 11 to 13 of the IT Act 1961. In conformity with the above, the main object of the society shall be:- (a) General …………….. (b) Education …………….. B) For attaining the aims & objects of the Trust, the assessee Society has created a website having the web address www.hwfindia.org for raising funds for various activities detailed herein below:- ………………… The assessee organization plans its activities periodically over a period of 10 years earlier known as Vision 2016 and then again reviewed by Vision 2026. 27 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) The scanned profile (web page) of the website as is available on the website is enclosed herewith marked as Annexure-2(Colly.) from which it is apparent that no funds have been invited or raised from any particular community or caste, similarly, no funds have Page 14 of 39 been proposed to be utilized for the benefit of any particular community or caste. The said facts are appearing in the website under the following headings:- a. Home b. What we do c. Where we work d. Programs & Activities The bank particulars for making the payments for the respective projects have been detailed on each project giving the bank name, account no., IFSC Code so that the Donors may make the payments in the respective bank accounts - Donors make the payments through banking channel as well as by cash deposit in the said bank accounts for which no details generally are being furnished by such cash depositors despite of the fact of the following specifically mentioned on each advertisement as appearing on the website in case of each project and all the money/donations so received are duly accounted for in the books of the assessee organization duly audited by the auditors after examining the activities of the assessee organization under the provisions of the Income Tax Law for which due Audit Reports are being furnished year by year on Form-10B u/s 124 of the Act after due satisfaction by the Auditors:- e. \"Email us the details of transaction/fund transfer details with your postal address at account@hwfindia.org or WhatsApp +917042892026\" The assessee organization has not been registered under FCRA Act ever and therefore, did not received any foreign contribution (no contribution whatsoever was ever received from countries abroad/foreign countries). On the same website as well, it has clearly been mentioned that the donor is required to furnish the details (such as email, phone no., PAN, name, address, project type-project for which payment is being made, amount of donation, pin code, country & state) in the prescribed proforma provided in the website under the link \"Donate\" for making donation along with the Gateway for making online payment, the scanned portion in respect to the same is appearing at the last in Annexure-2 (Colly) as already aforesaid. 28 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) Apart from the above, the assessee organization also makes advertisement for raising funds through Newspapers published in different parts of the country (such as different states of South India, Gujarat, West Bengal, Delhi, etc.), the evidences in respect of the same are enclosed by way of bills are enclosed herewith marked as Annexure-3(Colly). It is worth mentioning here that we never invite the donors from a particular community or a cast and similarly, we never invite the beneficiaries from a particular community or a caste. Whosoever comes - voluntarily suo moto, to make donations and similarly to seek help from the assessee organization, we help the poor people who themselves approach the organization voluntarily for seeking help and the organization never brings such poor people from a particular community or caste - It is a matter of record that the assessee organization has never denied any needy or poor deserving person of/from any community or caste who desired help from the organization and therefore, the question of serving any person from any particular community does not arise which is a matter of record Whosoever comes, the organization provide the help irrespective of keeping the community or caste in view. C) The assessee organization has been granted registration /s 12A of the Income Tax Act, 1961 right from AY 2009-10 vide registration bearing no. NQ.DTT (E)/2009-10/DEL-HR20013-29052009/214 dated 29.05.2009 after having examined the aims & objects as well as the activities of the organization by the Ld. DIT(E), Delhi and accordingly, the benefit of deduction u/s 80G of the Act was also granted for AY 2009-10 το ΑΥ 2010- 11 and thereafter on perpetual basis vide separate notification issued by CBDT to this effect. The copies of such orders for registration are enclosed marked as Annexure-4(Colly.) The activities of the above named organization have been examined time & again by the tax authorities under various scrutiny assessments and after deep examination & satisfaction, the tax authorities allowed the continuance of the benefit u/s 11 of the Act (last examined vide order dated 25.02.2021 vide DIN: ITBA/AST/S/143(3)/2020-21/1030991801(1) accepting the charitable activities of the organization after due examination - the benefit u/s 11 of the Act was duly allowed), the copies of the few assessment orders in respect of the same u/s 143(3) of the Act are enclosed herewith marked as Annexure-5(Colly.) D) Further to the above, it is most pertinent to mention here that after due examination & complete satisfaction by the tax authorities towards the Aims & Objects as well as the actual activities as being carried out by the assessee organization, the Registration u/s 12(1) as well as benefit us 80G of the Act was allowed by PCIT vide orders dated 23.09.2021 relevant to 29 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) AY's 2022-23 to 2026-27, the copies of the same are enclosed herewith marked as Annexure-6(Colly.). While going through the aforesaid orders dated 23.09.2021, the following is appearing at clause 9 in both of the aforesaid orders:- \"a. After considering the application of the applicant and the material available on record, the applicant is hereby granted registration with effect from the assessment year mentioned at serial no 8 above subject to the conditions mentioned in row number 10. b. The taxability, or otherwise, of the income of the applicant would be separately considered as per the provisions of the Income Tax Act, 1961. c. This order is liable to be withdrawn by the prescribed authority if it is subsequently found that the activities of the applicant are not genuine or if they are not carried out in accordance with all or any of the conditions subject to which it is granted, if it is found that the applicant has obtained the registration by fraud or misrepresentation of facts or it is found that the assessee has violated any condition prescribed in the Income Tax Act, 1961\" The registration is granted subject to the following conditions as contained in clause 10 of the aforesaid orders dated 23.09.2021:- \"a. As and when there is a move to amend or alter the objects/rules and regulations of the applicant, prior approval of the Commissioner of Income Tax shall be sought along with the draft of the amended deed and no such amendment shall be effected until and unless the approval is accorded. b. In the event of dissolution, surplus and assets shall be given to an organization, which has similar objects and no part of the same will go directly or indirectly to anybody specified in section 13(3) of the Income Tax Act, 1961. c. In case the trust/institution is converted into any form, merged into any other entity or dissolved in any previous year in terms of provisions of section 115TD, the applicant shall be liable to pay tax and interest in respect of accreted income within specified time as per provisions of section 115TD to 115TF of the Income Tax Act, 1961 unless the application for fresh registration under section 12AB for the said previous year is granted by the Commissioner. d. The Society/Institution should quote the PAN in all its communications with the Department. 30 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) e. The registration u's 12AB of the Income Tax Act, 1961 does not automatically confer any right on the donors to claim deduction als 80G. Order 's 12AB read with section 124 does not confer any right of exemption upon the applicant w's 11 and 12 of Income Tax Act, 1961. Such exemption from taxation will be available only after the Assessing Officer is satisfied about the genuineness of the activities promised or claimed to be carried on in each Financial Year relevant to the Assessment Year and all the provisions of law acted upon. This will be further subject to provisions of section 2(15) of the Income Tax Act, 1961. g. No change in terms of Society Deed/ Memorandum of Association shall be effected without due procedure of line and its intimation shall be given immediately to Office of the Jurisdictional Commissioner of Income Tax. The registering authority reserves the right to consider whether any such alteration in objects would be consistent with the definition of \"charitable purpose\" under the Act and in conformity with the requirement of continuity of registration. h. The Trust/ Society/ Non-Profit Company shall maintain accounts regularly and shall get these accounts audited in accordance with the provisions of the section 124(1)(b) of the Income Tax Act, 1961. Separate accounts in respect of each activity as specified in Society Deed/ Memorandum of Association shall be maintained. A copy of such account shall be submitted to the Assessing Officer. A public notice of the activities carried on/ to be carried on and the target group(s) (intended beneficiaries) shall be duly displayed at the Registered/ Designated Office of the Organization. i. The Trust/ Institution shall furnish a return of income every year within the time limit prescribed under the Income Tax Act, 1961. j. Separate accounts in respect of profits and gains of business incidental to attainment of objects shall be maintained in compliance to section 11(4A) of Income Tax Act, 1961. k. The registered office or the principal place of activity of the applicant should not be transferred outside the jurisdiction of Jurisdictional Commissioner of Income Tax except with the prior approval. l. No asset shall be transferred without the knowledge of Jurisdictional Commissioner of Income Tax to anyone, including to any Trust/ Society/ Non Profit Company etc. m. The registration so granted is liable to be cancelled at any point of time if the registering authority is satisfied that activities of the Trust/ Institution/ Non Profit Company are not genuine or are not being carried out in accordance with the objects of the Trust/ Institution/ Non Profit Company. 31 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) n. If it is found later on that the registration has been obtained fraudulently by misrepresentation or suppression of any fact, the registration so granted is liable to be cancelled as per the provision u/s section 12AB(4) of the Act. o. This certificate cannot be used as a basis for claiming non-deduction of tax at source in respect of investments etc., relating to the Trust/ Institution. p. All the Public Money so received including for Corpus or any contribution shall be routed through a Bank Account whose number shall be communicated to Office of the Jurisdictional Commissioner of Income Tax. q. The applicant shall comply with the provisions of the Income Tax Act, 1961 read with the Income Tax Rules, 1962. r. The registration and the Unique registration number has been instantly granted and if. at any point of time, it is noticed that form for registration has not been duly filled in by not providing, fully or partly, or by providing false or incorrect information or documents required to be provided under sub-rule (1) or (2) of rule 174 or by not complying with the requirements of sub-rule (3) or (4) of the said rule, the registration and Unique Registration Number (URN), shall be cancelled and the registration and URN shall be deemed to have never been granted or issued.\" After due consideration of the aforesaid terms & conditions on the basis of which registration u/s 124 and benefit u/s 80G of the Act granted to the assessee organization, we do not find any occasion for issuance of notice u/s 12AB(4) of the Act as the assessee organization duly satisfies all the terms & conditions contained in clause 10 of the said orders vide sub- clauses (a) to (r) contained therein, each & every sub clause is duly satisfied by the Assessee Organization is being demonstrated herein below:- a. The assessee organization has not amended or there has been any move to amend or alter the objects/rules and regulations of the organization. b. The assessee society has not been dissolved as yet and no benefit whatsoever has been derived directly or indirectly by anybody specified in section 13(3) of the Income Tax Act, 1961. c. The assessee trust/institution has not been converted into any form or merged into any other entity or dissolved in any previous year in terms of provisions of section 115TD d. The assessee society has always been quoting/ quoted its PAN in all its communications & proceedings. e. All due process and complete documents duly provided to the tax authorities in the process of the registration u/s 12AB of the Income Tax Act, 1961 and after due satisfaction of the PCII, registration u/s 124 and the 32 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) benefit u/s 80G were allowed & granted vide orders dated 23.09.2021 relevant to AY 2022-23 to AY 2026-27. f. There is no evidence by any assessment order whereby the Assessing Officer is not satisfied about the genuineness of the activities promised or claimed to be carried on in each Financial Year relevant to the Assessment Year and all the provisions of law acted upon. The registration u/s 12A has been granted only after due satisfaction by the tax authorities regarding the charitable activities of the assessee organization u/s 2(15) of the Income Tax Act, 1961. g. There has been no change in terms of Society Deed/ Memorandum of Association of the assessee Trust. There is no alteration in objects whatsoever with regard to the definition of \"charitable purpose\" under the Act and in conformity with the requirement of continuity of registration h. The assessee Society has been maintaining/maintained accounts regularly and the same have been duly audited in accordance with the provisions of the section 124(1)(b) of the Income Tax Act, 1961. The copy of such audited accounts are duly being furnished to the Assessing Officer year by year. All the activities of the assessee Society are duly being disclosed on the website of the assessee Society as already indicated at para (B) above. i. The assessee Society has been filing its return of income every year within the time limit prescribed under the Income Tax Act, 1961, last filed for AY 2022-23, the copy of the same along with evidence of having filed the Audit Report on Form- 10B u/s 12A(1)(b) of the Act are enclosed herewith vide Annexure-7(Colly.). j. No business activity was carried out by the assessee organization any time till the date of this letter right since inception of the Trust. k. The registered office or the principal place of the applicant is within the same Jurisdiction right from the inception of the creation of the Society till date and there has been no change in respect of the same. l. No asset has been transferred by the assessee organization right from the inception of the creation of the Society till date to anyone, including to any Trust/ Society/ Non Profit Company etc. m. No evidence whatsoever has been brought to the knowledge of the assessee organization till date with regard to the fact that activities of the Society are not genuine or are not being carried out in accordance with the objects of the Society and therefore, it remained unascertained as to how the notice w/s 12AB(4) of the Act has been given to the assessee organization proposing for cancellation of registration without having provided any documentary evidence by the Registering Authority to this 33 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) effect on the basis of which he proposes to do so - Vague averments have no meaning in the eyes of law. n. The assessee organization has not obtained the registration fraudulently by misrepresentation or suppression of any fact. o. The assessee organization has never claimed non-deduction of tax at source In respect of investments etc relating to the Society on the basis of the certificate/registration granted u/s 124 of the Act. p. All the Public Money so received including for Corpus or any contribution has been routed through a Bank Account whose numbers are duly appearing on the website as well as duly communicated to Office of the Jurisdictional Commissioner of Income Tax. q. The applicant Society has duly complied with all the provisions of the Income Tax Act, 1961 read with the Income Tax Rules, 1962. r. The form for registration has been duly filled and no false or incorrect information or documents have been provided by the assessee organization as required under sub-rule (1) or (2) of rule 17A and has duly complied with all the requirements of sub-rule (3) or (4) of the said rule. It is worth mentioning here that all the activities of the assessee Society have been examined time & again by the tax authorities on the basis of which continuous benefit u/s 124 of the Act has been allowed after repeatedly examining the activities of the Trust, renewed & granted fresh registration u/s 124 & 80G vide orders dated 23.09.2021 vide clause 9 of such orders after having fully satisfied with regard to the compliance of the conditions contained in clause 10 of such orders (also elaborated above with regard to the same-sub-clause-wise (a) to (r) above) & therefore, the reason as to why the notice u/s 12AB(4) of the Act has been issued all of a sudden on one fine morning remained unascertained and that 100 after due examination of the activities of the Society time & again after having been fully satisfied with regard to the activities of the Society as well as to the fact that all the conditions as contained in clause 9 & 10 of the orders dated 23.09.2021 have duly been complied with. In view of the above facts, there is no occasion for issuance of any notice u/s 124B(4) of the Act particularly when the assessee organization is engaged in the charitable activities in accordance with the definition of Sec. 2(15) of the Act and such activities are being carried out for the benefit of the public at large as already stated in paras (A) & (B) above in addition to the fact that all the terms & conditions as stated at clause 10 with its sub 34 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) clauses (a) to (r) have duly been complied with by the assessee organization for grant of registration u/s 12A of the Act. The above facts clearly establish that the application of income by the assessee Society is totally in accordance with the aims and objects of bringing all round development to the Impoverished irrespective of any caste, creed or religion, as stated in our Society deed as well as in view of the detailed facts stated in earlier paras above In addition to the above, we want to bring the following further facts before your good self 1) The very allegation made by your good-self in your notice dated 09.06.2023 that the charitable activities of the assessee organization are for the benefit of a particular religious community which fact is totally wrong and it seems that your good-self has formed this contention totally under misconception as the assessee Society is just working towards the well- being of the poor, the impoverished & unprivileged section of the society. The Society is making every possible effort to help the poor & not a particular religious community as wrongly alleged by your good-self Poor is a Poor. Poor cannot be categorized in a particular religious community. 2) It is pertinent to mention here that the assessee Society has not indulged in any tуре оf religious activities and all the activities of the said assessee organization are directed towards providing the facilities or means for the general well-being of the poor & needy people. 3) It appears that the tax authorities are misconceived due to the name of the organization been similar to that of the other organizations just as \"Human Welfare Foundation\" an another organization working with the same name in the state of Jammu & Kashmir (The organization headquarter is located at KP Road, Anantnag, J&K and is operating in districts like Kulgam, Shopian and Anantnag having PAN: AAEFH5066R) duly approved under FCRA-Which information is available on their website - www.jkhwf.org run by Shabir Baba and other management, the above details as available on the website is enclosed marked as Annexure- 8(Colly.). Similarly, it has also been observed that there are various other organizations working & doing the activities similar to the names of our organization, few of them are being given herein below- a. Human Welfare Trust, Delhi\"* b. Human Welfare Trust, Chennai c. Human Welfare Forum 35 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) d. Human Welfare Council e. Human Welfare Foundation (having office at 33, DDA Flats Si, DDA Flats, Block J 2. Doctor Ambedkar Nagar, Madangir, New Delhi, Delhi 110062) f. Human Welfare Society(having office at B-142, Ground Floor, Hari Nagar. New Delhi, Delhi 110064) g. Human Care & Welfare Foundation h. Human Welfare Society i. Human Welfare Welfare Trust j. Human Rights Welfare Organization k. Human Care Social Welfare Society NGO Established in 1994 and headquartered in Delhi, Human Welfare Society has been functioning as a Public Charitable Society registered under the Indian Society Act, with registration number 1749. HWT is also registered under the Foreign Contribution Regulation Act (FCRA) (registration number: 231660750) enabling it to receive and utilize foreign funds. It is also registered under IT sections 12A and 80G. As part of its ambitious flagship project \"Vision 2026\", HWT is primarily engaged in carrying out charity and social welfare activities across India aiming to improve the quality of life for the deprived and underprivileged communities and help them to actively participate in nation building. [the above information is available on the website of the aforesaid Society- hwtindia.org. the relevant particulars as stated herein are enclosed by way of an annexure marked as Annexure-9] We still do not know for what reasons the notice u/s 12AB(4) of the Act has been issued to us which may be in misconception to the activities of any other organization(s) may be with the similar or same name as our organization (the assessee organization) is engaged for carrying out the Charitable activities for the public at large and not for the benefit of a particular religious community as the assessee organization is just working towards the well-being of the poor, the impoverished & unprivileged section of the society. 4) The allegation so made is totally wrong & baseless not only as per law but also on facts which are elaborated below:- The assessee organization is mainly engaged towards promoting the education amongst the poor section of the society and has its educational Institutions running in six states - Delhi, Haryana, West Bengal, Bihar, Jharkhand, and Assam. ii The assessee organization has a system of selecting the candidates by way of an application-based system First, the students submit an 36 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) application for admission in the institution and then the applications are approved by the school managing committee and admission is granted to the eligible student. Therefore, whosoever applies for admission gets the admitted to the school. Anyone who wants to take admission can apply for admission by submitting the application and gets selected as per the capacity of the Institution irrespective of any caste, race or religion as well as the criteria fixed in the respective state (for example, in Delhi, the criteria of distance, the sibling studying in the same school for nursery classes and for higher classes the vacancies are filled on the basis of the written test) During the course of selecting the candidates, the admissions in the Institutions are being made according to the Selection Process as stated above and it is wrong to allege that the students of only particular community are being admitted. Few of the instances are enclosed vide which it is demonstrated that the candidates are not from alleged particular community but are from all caste the evidences in respect of the same are enclosed and marked as Annexure-10(Colly) m. The assessee Society also provide Scholarships to the students which are also provided by way of un application-based system. The applications for Scholarship are invited by way of an advertisement posted on the website, Facebook, Instagram & other social media platforms of the Society which can be accessed by any person. Again, the same process is followed as stated at Para-2 Above. In this system as well, the applicants whose applications are received by the Assessee Society are provided Scholarships irrespective of their caste or religion. The copies of such advertisements & some scholarship applications are enclosed herewith marked as Annexure- 11(Colly.) iv Besides promoting education, the assessee Society also engage in other well being activities as well such as drinking water facility, orphan care, skills development, housing development, self-employment support, helping the underprivileged section during emergencies (such as Flood, Corona- Covid-19, etc.), medical vans among many others. These activities are also undertaken based on the requests or applications made by the deprived people and based on their needs, the assessee Society provides its support for giving them the requisite relief as already discussed in preceding paras and documentary evidences in respect of the same at sub-para (iv) of Para 2 in compliance to the specific details desired vide questionnaire dated 09.06.2023. Further to the same, it is categorically demonstrated here that the assessee organization is not working for the benefit of a particular specific community or caste but for all, the project-wise some of the beneficiaries from the communities other than the alleged community are detailed vide Annexure- 12(Colly.) with its Sub-Annexures 12(a) to 12(n) annexed herewith. 37 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) The assessee Society due to its widespread charitable activities has earned a sense of society in the people and therefore, not only the needy people but also other Charitable Institutions are benefitted from their activities, few of such instances are detailed here-under- a) The assessee Society through its School Capacity Building Project helps other educational institutions which are deprived of the basic infrastructural facility for carrying out their charitable educational activities like wooden furniture, labs, electrical fittings, etc. The assessee society raises funds and help theses charitable institutions for achieving their noble aim of providing education to the poor & needy. The documentary evidences in terms of photographs & vouchers are enclosed herewith marked as Annexure- 13(Colly.). b) The assessee Society in collaboration with a Hospital Al-Shifa, a charitable institution runs Mobile Medical Van across Delhi for providing medical support to the needy. The documentary evidences in respect thereof are enclosed herewith marked as Annexure-14(Colly.). c) The assessee Society also provides its support by way of donations to other Charitable Organization for carrying out their Charitable Activities. The list of the organization is enclosed herewith marked as Annexure-15(Colly.). From the above stated facts, it can be seen that the assessee Society is doing whatever best possible at its end for providing the relief to the poor not only in terms of education but also in many other ways which are essential for the overall well being of the poor. backward & unprivileged section of the country irrespective of their caste, race or religion. It is also worthwhile to mention here that the Society has an application based mechanism of providing relief to the poor, who so ever comes for help, the Society makes its best possible efforts to help them and the Society is not going (running) after the people to help them rather the people who are in need comes for seeking help from the Trust, So it is totally wrong to say that the Society is working towards the benefit of a particular religious community or caste as Society is not going after the people and also not promoting or doing any religious activities and therefore, the allegation so being made by your good-self is absolutely wrong and under sheer misconception, 5) Further to the above, as per the income tax law as well, the allegation made by your good-self is totally on the wrong footing in view of the following:- a) That the assessee Society has been created & established vide Society Deed dated 04.12.2008 with the purpose for the overall upliftment of the 38 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) impoverished (poor) and not for promoting any religious purpose or for performing religious activities. b) That the assessee Society has worked towards its aims & objects only which is the upliftment of the poor and this fact cannot be denied that the beneficiaries of the activities of the Society are poor & needy people which comes under the charitable purpose, te.. \"Relief to the Poor\" as per the provisions of Sec. 2(15) of the Act and the Act does not define any religion for the poor. c) That the beneficiaries of the charitable activities of the Society are those who have applied or requested the Society for availing the charitable facilities provided by the Society and person of any religion can avail such benefits and there are numerous cases where beneficiaries are from different religions and not from a particular religious community, copy of few of such cases where the beneficiaries of the charitable projects of the assessee Society belong to other religion are enclosed herewith marked as Annexure-12 with its sub-annexures 12(a) to 12(n) already stated at sub- para (iv) to Para 4 above. d) That the very reason for the aforesaid misconception is that the number of beneficiaries in some of the backward areas (regions) as selected from the backward areas as notified by Niti Aayog appearing on the website of Niti Aayog, the population of which areas are more from a particular religious community and that is the reason for the said fact that in such areas the population of such particular religious community is more than the people of other religious communities and due to the said fact, the applicants from a particular religious community are more and therefore, it cannot be said that the Society is working towards a particular religious community or caste and such a situation is beyond the control of the assessee Society and the Society just helps such applicants because they are poor & needy people and not because they belong to a particular religious community or caste. The assessee organization in order to help the poor as well uplift the backward areas as notified by the Niti Aayog wants to do its activities in such areas which is a matter of record and can be examined. e) That the intention of the law in terms of provisions as provided in explanation (d) to Section 12AB(4) of the Act can never deprive the Charitable Organizations from the benefit of exemption w's 11 which organizations are doing genuine charitable activities for the benefit of the public at large across the nation just on the basis of wrong assumption or presumption. f) Without prejudice to above, even otherwise on merit, only for the purpose of academic discussion if a charitable institution is working towards the betterment of backward people of the country who are deprived of the basic 39 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) facilities due to the unavailability of the proper resources like drinking water, proper sanitary facilities, education, etc. and the majority of the beneficiaries of such facilities coincidently belong to a particular religious community or caste, then how far it is fair to withdraw the exemption just on the basis of the fact that the beneficiaries belong to a particular religious community or caste despite of no intention of the organization to serve any particular community or caste even though such beneficiaries & people of this country are poor, impoverished, unprivileged and deprived of the basic facilities - This can never be the intention of the law of this country. g) That apart from above, there has been no infringement of the provisions of Sec. 13 of the Act and no part nor even a single penny has been used for any purpose other than for achieving the charitable aims & objects of the assessee Trust. As regards clause (b) of sub-section (1) of Sec. 13 of the Act is concerned, the assessee Societydoes not violate such provision as well in view of the detailed facts as stated in the preceding paras of this submission. With regard to your specific requirements desired vide your Letter dated 09.06.2023 in continuation to our earlier letters, We submit the point-wise reply as under:- 1) General in nature, no comments are required. 2) The following details are being furnished para-wise:- i. Soft copy of list of donations in excel attached for the financial Year 2017- 18 to 2021-22 marked as Annexure-16(with its sub-annexures for each of the respective financial year marked as Annexures -16(a) to 16(e)]. ii. We publish advertisements in newspapers, magazines and social media for collecting public funds for its activities. Philanthropists come forward and deposit transfer their contribution directly in our bank accounts for charity. However, some of them do not inform their details. That's why some columns in our donars' details are blank which fact has already been detained just below item. (c)-Other Program of Para (B) above. The copies of the advertisements are enclosed herewith marked as Annexure-17(Colly). iii We are running schools in different states including one chapter in Hyderabad, Telangana. We have provided you earlier only head office data, and transactions including donations received in schools and the chapter 40 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) were not included in the information earlier provided, the Reconciliation Statement to the data provided is enclosed herewith marked as Annexure- 18 with regard to donations and Annexure-19 with regard to the expenditure incurred on different activities as appearing in Income & Expenditure Account vis-à-vis details provided in Annexures 20 to 28 at Para iv below. iv. The supporting documents of such activities as bills, vouchers, photographs etc. as desired are being provided as under: Name of the Activity Supporting Documents vide Annexure no. Scholarship 20 [with its sub-annexure-20 (a) to 20(h) total Annexure-8] Relief to Poor [Food Kit ration, food packet (ready to eat; Relief during Foods & blanket distribution in winter with photos] 21 [with its sub-annexures-21 (ai to aviii) to 21 (ei to ex) total annexures-41] Orphan Care Program 22 [with its sub-annexure -22 (ai to aii) to 22(ei to eiii) Total annexure-15] Drinking Water Project 23 Low-Cost Housing Projects 24 Nagrik Vikas Kendra Project 25 [with its sub-annexure-25(a) to 25 (e)] Health Care Project 26 [with its sub-annexure -26(a) to 26 (d)] Self-Employment Program 27 [with its sub-annexure-27(a) to 27(d)] Corona (Covid-19) 28 v. With regard to Scholarship Refundable, we just say so in our advertisements in order to create a moral responsibility of the awardees for their social commitments, we have not received any refund or any amount of scholarship earlier awarded from any student either in the past or as u refund till date. vi. Scholarships are distributed to students in public programs through account payee cheques only. But in one case, we have provided air ticket to Ms. Daya Aruna research scholar in department of Hindi, Jamia Milia Islamia, New Delhi, for attending 25th European Conference on South Asian Studies (ECSAS) Paris, France. Conference was self-sponsored for which the payment was made directly by the assessee organization to the vendor. She was poor Dalit woman research scholar, and approached the assessee organization for financial assistance. We arranged her flight tickets for Paris. Supporting documents are attached herewith marked as Annexure-29. Furthermore, over a period of 5 years, in 21 cases, cash scholarship was given total amounting to Rs. 2.40,455/- in exceptional circumstances out of 41 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) the total amount of Scholarships given in five years amounting to Rs. 2.96,66.098/- vii a) Various kind of calamity/ disasters are affecting the poor people. In those periods, government provide relief to such peoples, however relief provided by Government are not so sufficient. In such a situation various NGOs come forward to help those affected people so that lives of general poor people could be saved. In such kind of situation, we distribute foods grains etc. (under the head Relief to poor) to poor people round the year. However, we do not restrict the beneficiaries to any community and have been providing rations-kits to the needy people without any biased approach. Also, the we select slums areas where hunger problems are there for distribution of food grains b) We are getting applications from coordinators and volunteers for food grains. Beneficiaries and places of the distribution area are selected by a team of at least three persons at state/district/ local level. Most of the applications are received through volunteers, coordinators of various projects of foundation such as village coordinators, NVK Centre coordinators, and Community Learning Centre coordinators. We are also receiving applications from the institutions such as schools, vocational training centers. Based on the available funds, foundation allows food kits project to different places. Such foods grains and other food items were procured from the markets and distributed amongst such affected poor people. Supporting documents and information as desired already provided vide Annexure-21 under the head \"Relief to Poor\" under clause (iv) above. c) We provide education support to orphan children, adopting them and arranging monthly periodic financial support for their education. Under this scheme, adopted orphan children are paid only through crossed account payee cheques to support their education. For this, students provide his/her mark sheet and education continuation proof every year for next year support. We also organize motivational programs, career guidance and counselling programs along with cheque distribution. We do not run any orphanage institution directly and as such no permission is required. Supporting documents and information as desired already provided vide Annexure-21 under the head \"Orphan Care Program\" under clause (iv) above. d) As per schedule of depreciation for the AY 2022-23, the amount of Rs. 2.19,09,518/- as alleged to be a sale/transfer, in fact, the figure appearing 42 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) in Building WIP has been transferred to Building Account on completion of the same. The supporting evidence in respect of the same is enclosed herewith marked as Annexure-30 e) Major source of cash receipts which are deposited in banks are donations and tuition and other fees received from students of our schools. Details relating to cash deposits are covered in the Annexure-16 with its sub- annexures 16(a) to 16(e) already reported at item (1) above. f) We provide advances for implementation of the respective Projects which are adjusted after the requisite details of the money spent or utilization thereof are submitted by the coordinators, the details of the expenses so incurred under the respective projects have already been detailed at Para (iv) above. Further to the same, the amounts of advances which remained unadjusted at the close of the year appears as advances outstanding as on 31 March of each year which are subsequently adjusted as & when the complete accounts & details are furnished thereof. The details of the advances given with purposes thereof, the names of the persons to whom given, advances adjusted against the particular project and the balance outstanding at the close of the year in each of the financial years ended on 31.03.2018 to 31.03.2022 are enclosed marked as Annexure-31(Colly.). g) Supporting documents and information relating to drinking water projects have already been provided vide Annexure-23 under the head \"Drinking Water Projects under clause (iv) above, h) Supporting documents and information relating to NVK project have already been provided vide Annexure-25 under the head \"Nagrik Vikas Kendra Project under clause (iv) above. 3) We have provided scholarships based on the application received from students. Most of the students are applying through the link provided in the website. A team of at least three persons are selecting students after conducting interview and considering their merit and financial need. We are not restricting scholarship to any particular religious community We are providing list of students who do not belong to a particular religions community along with their ID proof and copies of cheques through which payments were made to them as already indicated at sub-para (c) of Pura 5 above vide Annexure-12(Colly.) and therefore, the very allegation is wrong & baseless as every student from any community or caste is free to apply 43 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) from the said link provided on the website and we do not bring the students from any particular community or caste to apply on the said link. 4) We are supporting only a few individuals for construction of house. We are not getting more donation for housing projects therefore we are not giving any advertisement for applications. However, the needy people who requires such help approach our organization. They are selected considering their financial condition and special needs like widows, differently abled (handicapped) etc. through a Selection Committee specifically constituted for the said purpose. It is wrong to state that the beneficiaries belong to a particular religious community, some of the instances evidencing the fact that the help in respect of the above have also been allowed to various communities for which ID copy, copy of cheque, receipts by the beneficiary who do not belong to the particular religious community as already provided vide Annexure-12(Colly.) above 5) We have created some centres as Nagrik Vikas Kendra wherein we collect information about government-sponsored schemes and share the same to visitors. These are in the nature on enquiry and guidance centres wherein we do not give any pecuniary or non-pecuniary benefit to any person but maintains a proper register wherein the name of the visitor & his contact numbers are duly appearing. We never felt it necessary to collect PAN or AADHAR particulars of such visitors. Now on your insistence we have approached some of those persons who visited earlier to our centres for seeking help & assistance to avail the benefit under the aforesaid schemes, a list of the beneficiaries wherein the particulars of names, their IDs. contact members, the centers where they approached, etc. as already being provided vide Annexure-12(Colly) above from which it is evident that the assessee organization is not working for a particular religious community or caste. In view of the above stated facts, it is hereby prayed before your honor to kindly drop the proceedings so initiated under misconception & wrong assumption/presumption u/s 124B of the Act and oblige.” 27. The Ld. AR further submitted that the assessee has been working for charitable activities where the assessee is having various offices from where the charitable activities were carried out of providing education, food, medical services etc., to the public at large. He further submits that the CIT(E) alleges that assessee has received donations in the bank and had not submitted the details whether 44 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) they were received from foreign entities, however, assessee is not registered in FCRA, therefore, there is no question of receiving any donations from outside the country. Before ld. CIT(E) assessee had filed details of the donations received from various parties and list of donation received were submitted. It was further submitted that in some cases donations were directly credited in the Bank Account of the assessee where the assessee is not having the details of donors in such case and despite of best efforts they could not be identified thus, to such extent details could not be provided. He further submitted that from the perusal of the table appearing at page 34 of the order, only 10% approx. represents such donations received. As the assessee has been maintaining complete details of the donors for majority of the donations, therefore, merely for the reason that where the donations were directly received in the bank account, details of few of such donors were not available, it could not be held that the activities of the assessee are not the genuine or not carried for charitable purposes. Ld. AR further submitted that the Ld. CIT(E) in para 11.70 to 11.14 of the order has tried to make out a case that assessee society made specific violation of cluse-d of Explanation to Section 12AB (4) where it is alleged that the assessee society has applied its income for the benefit of a particular religious community i.e. Muslims. The AR had submitted that before Ld. CIT(E) assessee has very categorically demonstrated that the income was applied for the benefit of public at large coming fromall the section of the society. However, since the area of the operation of the assessee is in the localities where major population belongs to a particular community, 45 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) therefore, by default the beneficiaries are from such community. The Ld. AR further submitted that assessee has never restricted its benefit for a particular community nor any instance was brought on record by the Ld. CIT(E) which could prove that the assessee society has restricted people from other communities rather its income was applied without any discrimination of casts or creeds. Ld. AR, therefore, prayed that the registration granted u/s 12A(1)(ac)(i) of the Act be restored. 28. The Ld. AR also placed reliance on the judgment of Hon’ble Supreme Court in the case of CIT vs. Dawoodi Bohara Jamat reported 364 ITR 31 (SC) wherein it is held that where object and purpose of the assessee trust clearly demonstrate that activities of the trust though both charitable and religious are not exclusively meant for a particular religious community, therefore, section 13(1)(b) of the Act is not attracted to the assessee trust, hence, it would be eligible for claim of exemption u/s 12A of the Act. The Ld. AR also placed reliance on the following judgments of the Hon’ble Supreme Court with regard to the application of funds for a particular cast or community. (i) 82 ITR 704 (SC) Ahmedabad Rana Caste Association vs. CIT (ii) 140 ITR 1 (SC) CIT vs. Ahmedabad Rana Caste Association (iii) 243 Taxmann 60 (Guj.) CIT(E) vs. Bayath Kutchhi Dasha Oswal Jain Mahajan Trust. (iv) 8 (2024) NYPCTR 1456 (Guj.) 29. On the other hand, the ld. CIT-DR vehemently supported the orders of the lower authorities and submitted that the Ld. CIT(E) in 46 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) para 11 to 11.15 has discussed each and every aspect of application of income at length and has been able to establish that the assessee society has applied its income solely for the benefit of a particular religious community. All the observations made by the CIT(E) are not controverted by assessee, and therefore, he prayed for the confirmation of the order of the Ld. CIT(A) cancelling the registration granted u/s 12A of the Act to assessee trust. 30. We have heard the rival submissions and perused the materials available on record. From the facts of the instant case, it is seen that the main issue involved in these grounds revolved around the allegations of the Ld. CIT(E) that the income of the assessee was mainly applied for a particular religious community which is in contraventions to provisions of clause (a), (d) and (e) of Explanation to Section 12AB(4) of the Act. The main objects of the assessee society are as under: “(i) To bring about all round development to the impoverished irrespective of any caste, creed or religion. (ii) To establish, maintain and carry out humanitarian activities with a view of working towards improving the quality of life. (iii) To established administer and maintain educational institutions of every kind especially for the downtrodden sections of India population. (iv) To establish, run maintain or assist any medical institution, hospitals including multi-specialty hospitals nursing homes and clinics, or to grant assistance to needy and indigent person for meeting the cost of medical treatment. (v) Relief to the poor which includes to give financial assistance, to provide shelters, to run self-employment schemes etc., 47 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) (vi) To order objects to general public utility- To acquire property for the sole use for public good by making it available for public purpose.” 31. From the perusal of the objects of the assessee trust, we find that the society was created to serve general public at large where its objects are of all around development of every corner of the society irrespective of caste, creed and religion and to carry out activities for improving humanitarian quality of life. The objects provide establishment, administration and maintaining of educations institutions of very kind for the weaker section of the society. They further provide medical facilities where people from all the communities are welcome. Assessee society further provides relief to poor which include financial assistance, free food, Shelter and further providing self-employment scheme. From the perusal these objects, it is clear that the appellant society is engaged in the providing charitable activities as defined in section 2(15) of the Act. It is also seen that that the assessee society is providing education where the schools are being run by adopting the existing facility and further developing by getting lease and constructing building. The assessee society having CBSE affiliated school where students from all the sections of society irrespective of their caste and creed are admitted and getting education. It is also seen that assessee society has been able to demonstrate that the registration process for getting admission in these schools is not restricted to the students of a particular community. Likewise, assessee has been able to demonstrate that it is providing scholarship to the student coming from all the communities and only criteria is weak financial 48 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) background with promising results. Merely because the schools are situated in the area where dominant population is of a particular religious community, majority of the students getting admission are from that particular community however, it is an admitted fact that the assessee society is not running Madrassa. Since main object of assessee society is to provide quality of life to the weaker sections of the society, it always tried hard to provide benefit to the poor and in order to achieve these objects, schools were opened in the area where economically weaker sections of society are main residents. As the assessee society is working for a public at large, it cannot be said that it had applied its income for the benefit of a particular community. It is further seen that not only education but also the free medical facilities, drinking water, child support, distribution of free food, low cost housing etc. were also provided where all the weaker sections of the society got benefited. Once, it is established that the main object is of charitable in nature, and objects are for the benefit for the whole mankind and for all the citizens of county, benefit of exemption u/s 12A cannot be withdrawn. The assessee society never restricted its benefit to any caste or community, in other words it never intended to serve a particular caste or community rather the assessee society is working for the benefit of mainly for weaker sections of the society. The Hon’ble Supreme Court in the case of CIT vs. Dawoodi Bohara Jamat (supra) has dealt the issue to application of section 13(1)(b) vis a vis charitable or religious purposes. The Hon’ble Court in para 30 of the order observed as under: 49 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) “30. According to s. 2(15), the expression \"charitable purpose\" has been defined by way of an inclusive definition so as to include relief to the poor, education, medical relief and advancement of any other object of general public utility. A catena of decisions of this Court which have interpreted the said provision and especially the expression \"any other object of general public utility\" have observed that the said expression is of the widest connotation. The word \"general\" in the said expression means pertaining to a whole class. [CIT vs. Gujarat Maritime Board (2008) 214 CTR (SC) 81: (2007) 14 SCC 704]. Therefore, advancement of any object of benefit to the public or a section of the public as distinguished from benefit to an individual or a group of individuals would be a charitable purpose. [CIT vs. Ahmedabad Rana Caste Association (1983) 140 ITR 1 (SC)]. The said expression would prima facie include all objects which promote the well being of the general public. It cannot be said that a purpose would cease to be charitable even when public welfare is intended to be served.” 32. Similar view is expressed by the Gujrat High Court in the case of CIT (E) vs. Jamiatul Bannat Tankaria reported in [2024] 8 NYPCTR 1456 (Guj). 33. In view of the above discussion and by respectfully following the judgments of the Hon’ble Supreme Court and also looking to the facts that assessee society is providing education, medical facility, relief to poor as defined in section 2(15) of the Act which has not been doubted by the Ld. CIT(E) who merely for the reason that major beneficiaries are from a particular religious community has cancelled the registration, which is contrary to the facts of the present case as discussed above. The assessee society never intended to restrict the benefits to a particular religious community and the beneficiaries includes all the sections of the society irrespective of their casts and creed and, therefore, the action of the Ld. CIT(E) in withdrawing registration granted u/s 12A vide order dated 29.05.2009 w.e.f. AY 2018-19 and further registration granted in 12A(1)(ac)(i) of the Act 50 ITA Nos.2407 & 2406/Del/2023 Human Welfare Foundation vs. DCIT(E) w.e.f. AY 2022-23 is not in accordance with law. Therefore, the order of the Ld. CIT(E) cancelling the registrations is set aside and registrations granted to the assessee earlier u/s 12A and later vide registration dated 23.09.2021 u/s 12A(1)(ac)(i) of the Act are restored. In the result, grounds of appeal Nos. 2 to 22 taken by the assessee are allowed. 34. As a result, the appeal of the assessee for Asst. Year 2021-22 in ITA No.2407/Del/2023 is allowed. As observed above in para 5 above, the appeal of the assessee for Asst. Year 2023-24 in Appeal No. 2406/Del/2023 being preferred against the same impugned order, therefore, the same is dismissed being duplicate. Order pronounced on 29/4/2025. Sd/- Sd/- (MAHAVIR SINGH) (MANISH AGARWAL) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 29/04/2025 PK/Sr. Ps Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "
Other Referred Cases
CIT v. Kumudam Endowments, Isthmian Steamship Lines, Indian Medical Trust v. PCIT
Laws Referred To
Income Tax Act, 1961
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