LAKHARAJI DADIMA CHILD CARE FOUNDATION,DELHI V. CIT EXEMPTION, DELHI

ITA 5273/DEL/2024

AI Insights

The case involves the Lakharaji Dadima Child Care Foundation, a charitable trust, which appealed against the rejection of its application for registration under Section 12A(I)(ac)(iii) and approval under Section 80G(5) of the Income Tax Act, 1961 by the CIT (Exemption), Delhi. The trust, which operates a play school, argued that its lack of affiliation with state or central authorities should not affect its registration under Section 12A. The Tribunal considered precedents and the principles laid down by the Supreme Court, which support the view that once a trust is registered under Section 12A, its objectives cannot be further scrutinized by the Assessing Officer.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312960 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: misc
• Other Referred Cases: ITO Vs. Chadha Education Society Maxfort Pre-Primary School, ACIT Vs. Surat City
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RISHIPAL BEDI
• Assessee Lawyers: SANJAY JAIN
• Keywords: Opportunity of being heard; Charitable institution
• Section: 12A; 80G

Judgement Text

"P a g e | 1 IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, DELHI BEFORE MS. MADHUMITA ROY, JUDICIAL MEMBER AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA Nos.5273 & 5276/Del/2024 Lakharaji Dadima Child Care Foundation C-200, GF Hari Nagar Ext, Part-2, Badarpur New Delhi - 110044 Vs. CIT (Exemption), New Delhi 26th Floor, Civic Centre, Minto Road New Delhi – 110002 ̾थायी लेखा सं./जीआइआर सं./PAN/GIR No.: AACTL3285C Appellant .. Respondent Appellant by : Sh. Sanjay Jain, CA Respondent by : Ms. Rishipal Bedi, CIT, DR Date of Hearing 05.03.2025 Date of Pronouncement 30.04.2025 O R D E R PER MADHUMITA ROY: (JM): The assessee has come up in appeals against the orders both dated 25.09.2024 passed by the CIT(Exemption), Delhi whereby and whereunder the application for grant of registration under Section 12A(I)(ac)(iii) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) and approval u/s. 80G(5) of the Act have been rejected. P a g e | 2 2. We have heard the rival submission made by the respective parties, we have also perused the relevant materials available on record. 3. The assessee is a charitable trust filed an application dated 19.03.2024 in Form No. 10AB in Registration under Section 12A(I)(ac)(iii) of the Act. The said application dated 19.03.2024 has been filed in regularization of its provisional registration granted under Section 12A of the Act on 28.02.2023 copy whereof has also been annexed to the paper book filed before us. The appellant trust is registered with the Sub- Registrar-V, Delhi on 06.01.2023 is an irrevocable trust. On 16.04.2024 certain documents/clarification was sought for by the CIT in support of its claim made under Section 12A(I)(ac)(iii) of the Act, in response thereto submission dated 02.05.2024 was filed by the appellant. Relevant to mention that the appellant is running a play school in the name and style of Little Lions Play School and their aims and object is duly mentioned in the trust deed. 4. At the time of hearing of instant appeal, the ld. Counsel appearing for the assessee submitted before us that relevant documents including the copy of registration “DARPAN” under Niti Ayog Center Government have duly been filed before the Ld. CIT(E) along with other documents P a g e | 3 including the trust deed the ITR filed by the assessee for AY 2023-23 and 2024-25 and also the balance sheet of the said assessment year in order to substantiate his claim in support of regularization of its provisional registration granted under Section 12A of the Act. However, the ld. CIT(E) came to a finding that school is not registered/affiliated by any state/central authority. Further he has come to a finding that the trust is not for charitable purpose neither it falls under the provision of Section 2(15) of the Act. The conditions prescribed under Section 12AB has not been fulfilled and therefore the registration as asked for was rejected. Hence, the instant appeal before us. 5. The case of the assessee is this that whether the assessee is affiliated by any state or central authorities has no relevance to the matter of granting registration by the ld. CIT(E). Further that the genuineness of the activities of the trust and its compliance with any statutory requirements are required to be questioned to decide whether it is charitable or otherwise once the trust is registered under Section 12A of the Act. In this regard he has relied upon the judgment passed by the Coordinate Bench’s decision in the case of ITO Vs. Chadha Education Society Maxfort Pre-Primary School, in ITA No. 91/Del/2016 wherein on the identical facts and circumstances of the matter the observations was made particularly relying upon the decision of Hon’ble Apex Court in the P a g e | 4 case of ACIT Vs. Surat City reported in (2008) 300 ITR 214 (SC) holding that the registration of trust once done under Section 12A is a fait accompli and the AO cannot thereafter make further probe into the object of the trust. 6. Thus, having regard to this particular aspect of the matter he thus, prayed for a direction upon the ld. CIT(E) to regularize its provisional registration granted under Section 12A of the Act as applied for in Form 10AB under Section 12A(I)(ac)(iii) of the Act. 7. The ld. DR on the other hand failed to submit any such judgment in support of the registration so rejected by the CIT(E). Hence, considering the judgment passed by the Hon’ble Delhi High Court, we held that the CIT(E) does not have any jurisdiction to reject the application for grant of registration on the premises that the play school is not registered/affiliated by any State or Central Government authority. Thus having regard to the entire aspect of the matter, we deem it fit and proper to remit the issue to the file of the CIT(E) for adjudication of the issue of granting registration under Section 12A of the Act taking into considerations all the relevant documents in support of the case made out by the assessee and to pass a reasoned order upon granting an opportunity of being heard to the assessee. The Ld. CIT(E) is also P a g e | 5 directed to pass an order in regard to the exemption claimed under Section 80G of the Act accordingly. 8. Both the appeals filed by the assessee are, thus, allowed for statistical purposes. Order pronounced in the open court on 30.04.2025 Sd/- (Naveen Chandra) Sd/- (Madhumita Roy ) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 30.04.2025 PS: Rohit Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI "