KUSH INNOVATIVE FOUNDATION,NEW DELHI V. CIT EXEMPTION, NEW DELHI

ITA 3456/DEL/2024

AI Insights

The case involves two appeals by Kush Innovative Foundation against the orders of the CIT(E), New Delhi, which rejected the foundation's applications for registration under sections 12AB and 80G of the Income Tax Act, 1961. The foundation, established to promote and run educational institutions, argued that the CIT(E) did not adequately consider their submissions and the approvals from government authorities when rejecting their applications. The Tribunal, referencing several precedents, concluded that the CIT(E) should have focused on the genuineness of the trust's activities rather than the specifics of income application, which is the responsibility of the Assessing Officer.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473178 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Other Referred Cases: Mata Parvati Educational & Innovative Society in ITA No. 2296/DEL/2018, Vidyadayani Shiksha Samiti vs. CIT ITA No.309/Del/2016, Bhartiya Kisan Sangh vs. CIT - (2017 59 ITR (Trib) 228 (ITAT-Del), Shanti Education and Welfare Society vs. CIT ITA No.5970/Del/2012, Fifth Generation Education Society - 185 ITR 634, CIT vs. Babu Ram Education Society - (2018) 96 taxmann.com 606 (Allahabad), CIT vs. B.K.K. Memorial Trust - (2013) 256 CTR 424, DIT (E) vs. PannaLalbhai Foundation - 216 taxman 148, CIT vs. A.S. Kupparaju Brothers Charitable Foundation Trust - (2012) 69 DTR 315
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAYA CHOUDHRAY
• Assessee Lawyers: NAVEEN KUMAR
• Section: 11; 12AA; 12A; 80G

Judgement Text

" ITA No. 3456 & 3457/DEL/2024 Kush Innovative Foundation IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘C’ BENCH, NEW DELHI BEFORE MS. MADHUMITA ROY, JUDICIAL MEMBER, AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 3456/DEL/2024 [A.Y. ] ITA No. 3457/DEL/2024 [A.Y. ] Kush Innovative Foundation Vs. The C.I.T(E) 3028, D-3, Vasant Kunj New Delhi New Delhi PAN : AAJCK 2314 D (Applicant) (Respondent) Assessee By : Shri Naveen Kumar, CA Shri Gaurav Gupta, CA Department By : Ms. Jaya Choudhray, CIT-DR Date of Hearing : 21.01.2025 Date of Pronouncement : 12.02.2025 ORDER PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:- Both the above captioned separate appeals by the assessee are preferred against the order of the ld. CIT(E), New Delhi dated 26.06.2024 rejecting approval u/s 80G of the Income-tax Act, 1961 [the 2 ITA No. 3456 & 3457/DEL/2024 Kush Innovative Foundation 2 Act, for short] and application for registration u/s 12AB of the Act respectively. 2. Since both the captioned appeals were heard together and pertain to same assessee, they are disposed of by this common order for the sake of convenience and brevity. 3. Representatives of both the sides were heard at length. Case records carefully perused. Relevant documentary evidence brought on record duly considered in light of Rule 18(6) of the ITAT Rules. ITA No. 3457/DEL/2024 4. Briefly stated the facts of the case are that the assessee is a trust incorporated on 22.12.2021. The company was established to promote, establish, open, set up, maintain, assist, support and run, in India educational institutions like schools, colleges, coaching classes, practical training classes, boarding houses, ashrams, gurukuls, teaching classes, placement services, libraries, hostels, canteen, science, commerce, arts, engineering, management and computers etc. or any other faculty of education. The foundation is also running a school in Pune named Delhi Public School Pune, and in the first session, the strength of the students was 430. 3 ITA No. 3456 & 3457/DEL/2024 Kush Innovative Foundation 3 5. The company filed its first ITR for AY 2022-23 on 01.11.2022 and declared a total receipt of Rs. 57,27,830/- and a Refund of Rs.1,44,760/- by virtue of excess prepaid tax paid. 6. The assessee filed Form 10A on 28.02.2022 for provisional registration of the company under 12AB of the Act which was granted and valid up to AY 2024-25. On 19.12.2023. The appellant seeking permanent registration, filed Form 10AB for registration u/s 12AB of the Act. The ld. CIT (Exemption) issued notice on 22.02.2024 and asked to furnish several documents to which the assessee filed its reply on 08.03.2024 by furnishing the documents as called for. 7. CIT (Exemption) held that the assessee has failed to submit requisite details and documents required to verify the genuineness of the activities and objects. The ld. CIT(A) was of the opinion that the applicant has even failed to furnish the approvals from concerned government authorities in support of its claim of activities being covered under the provisions section 2(15) of the Income Tax Act, 1961. He rejected the registration u/s 12A(1)(ac) (iii) and also cancelled the provisional registration issued on 10.03.2022. 4 ITA No. 3456 & 3457/DEL/2024 Kush Innovative Foundation 4 8. The assessee is aggrieved and has come in appeal before us and submitted that the ld. CIT(E) did not consider the reply of the assessee nor its annexures and passed order. The ld. CIT(A) was not right in rejecting the application of the assessee for registration u/s 12A of the Act. 9. Per contra, the ld. DR relied upon the orders of the ld. CIT(E). 10. We have given a thoughtful consideration to the order of the CIT (Exemption). We find that the assessee has filed several documents and evidences before us, which were filed by the assessee before the CIT(E), to establish the genuineness of the activities of the trust. We find that the assessee has also filed the necessary approvals from the government authorities with respect to its activities. The rejection of grant of registration by ld. CIT(A) is not justified as the assessee has furnished all necessary documents to substantiate its stand. Further we are also of the considered view that at the stage of granting registration, the ld. CIT (E) is to examine the genuineness of the Trust and not the income of the Trust for charitable or religious purpose which functions are assigned to Assessing Officer and that the registration of the Trust does 5 ITA No. 3456 & 3457/DEL/2024 Kush Innovative Foundation 5 not involve inquiry into the actual activities or application of the funds etc. 11. Our view is fortified by the decision of the coordinate bench in the case of Mata Parvati Educational & Innovative Society in ITA No. 2296/DEL/2018 order dated 29.03.2019 wherein it has been held as under: “It is settled principle of law that at the stage of granting registration u/s 12AA of the Act, ld. CIT (E) is not to examine the application of income, which is to be done by the AO on year to year basis at the time of deciding the exemption u/s 11 of the Act; that the ld. CIT (E) is to examine the genuineness of the Trust but not the income of the Trust for charitable or religious purpose which functions are assigned to AO and that the registration of the Trust does not involve inquiry into the actual activities or application of the funds etc., particularly when there is nothing on record to make out that the object of the Trust or activities of the Trust were not genuine; and that non-production of books does not mean that the genuineness of the charitable activities of the assessee society is not established. Reliance in this regard may be placed on Vidyadayani Shiksha Samiti vs. CIT ITA No.309/Del/2016 order dated 14.12.2017; Bhartiya Kisan Sangh vs. CIT - (2017 59 ITR (Trib) 228 (ITAT-Del); Shanti Education and Welfare Society vs. CIT ITA No.5970/Del/2012; Fifth Generation Education Society - 185 ITR 634; CIT vs. Babu Ram 6 ITA No. 3456 & 3457/DEL/2024 Kush Innovative Foundation 6 Education Society - (2018) 96 taxmann.com 606 (Allahabad); CIT vs. B.K.K. Memorial Trust - (2013) 256 CTR 424; and DIT (E) vs. PannaLalbhai Foundation - 216 taxman 148. 11. Hon'ble Karnataka High Court in CIT vs. A.S. Kupparaju Brothers Charitable Foundation Trust - (2012) 69 DTR 315 has even held that, \"it is admitted that in pursuance of the trust deed and in terms of the objects setout therein, schools and colleges are being run and education institutions are being run as rightly held by the Tribunal, nothing more requires to be established to show that the trust in question is a genuine trust and therefore, the assessee is entitled to the registration under section 12AA of the Act. 12. In view of what has been discussed above, we are of the considered view that when aims and objects of the assessee society to open schools for imparting education and vocational training which is per se a charitable object under section 2(15) of the Act and the assessee society has been running a school in the name and style of Rainbow Kids Valley School, the ld. CIT (E) had no ground to decline the registration under section 12AA of the Act. Consequently, appeal filed by the assessee society is hereby allowed directing the ld. CIT (E) to grant the registration to the assessee society u/s 12AA of the Act.” 12. We, therefore, respectfully following the judicial precedents as above, allow this appeal of the assessee and direct the ld. CIT(E) to grant registration to the assessee. u/s 12AB of the Act. 7 ITA No. 3456 & 3457/DEL/2024 Kush Innovative Foundation 7 13. As a result, this appeal of the assessee is allowed. ITA No. 1798/DEL/2024 14. The solitary grievance of the assessee is that ld. CIT(E) was not justified in rejecting the application u/s 80G of the Income tax Act, 1961 [hereinafter referred to as 'The Act' for short]. 15. Since we have granted registration to the assessee vide our order in the former part of this order, application for registration u/s 80G of the Act is also granted to the assessee. The ld. CIT(E) is directed to grant registration u/s 80G of the Act. 16. In the result, both appeal of assessee in ITA No. 3456/DEL/2024 and ITA No. 3457/DEL/2024 are allowed. The order is pronounced in the open court on 12.02.2025. Sd/- Sd/- [MADHUMITA ROY] [NAVEEN CHANDRA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 12th FEBRUARY, 2025. VL/ 8 ITA No. 3456 & 3457/DEL/2024 Kush Innovative Foundation 8 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) Asst. Registrar, 5. DR ITAT, New Delhi Sl No. PARTICULARS DATES 1. Date of dictation of Tribunal Order… 21.01.2025 2. Date on which the typed draft Tribunal Order is placed before the Dictation Member .02.2025 3. Date on which the draft Tribunal Order is placed before the other Member 4. Date on which the approved draft Tribunal Order comes to the Sr. P.S./P.S. 5. Date on which the fair Tribunal Order is placed before the Dictating Member for pronouncement 6. Date on which the signed order comes back to the Sr. P.S./P.S 7. Date on which the final Tribunal Order is uploaded by the Sr. P.S./P.S. on official website 8. Date on which the file goes to the Bench Clerk alongwith Tribunal Order 9. Date of killing off the disposed of files on the judiSIS portal of ITAT by the Bench Clerks 10. Date on which the file goes to the Supervisor (Judicial 11. The date on which the file goes to the Assistant Registrar for endorsement of the order 12. Date of Despatch of the Order "