LOVE AND CARE FOUNDATION,NEW DELHI V. CIT EXEMPTION , NEW DELHI

ITA 2649/DEL/2024

AI Insights

The case involves Love And Care Foundation, a trust formed under section 8 of the Companies Act, 2013, which sought registration under section 12AB of the Income Tax Act, 1961, to avail tax benefits for charitable activities. The CIT (Exemption) initially granted provisional registration but later rejected the application for regular registration and cancelled the provisional registration, citing lack of evidence of charitable activities and non-compliance with filing requirements. The tribunal found that the CIT (Exemption) did not properly consider the assessee's submissions and remanded the case for further examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705495 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: misc
• Laws Referred To: Companies Act 2013, Income Tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKSEH JHA
• Keywords: Cancellation of registration
• Section: 12A; 80G

Judgement Text

"1 THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH “E”DELHI BEFORESHRI SUDHIR KUMAR, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.2649/Del/2024 Assessment Year: 2025-26 Love And Care Foundation, 209, 2ndFloor Plot NO.2 DDA commercial Shops Distt Centre Janakpuri New Delhi ,South West Delhi 110058 Vs. CIT (Exemption) Delhi PAN No.AADCL3765H (Appellant) (Respondent) ORDER PERSUDHIR KUMAR, JUDICIAL MEMBER: The assessee preferred the captioned appeals, challenging the order dated 28.03.2024 passed by the Commissioner of Income Tax (Exemption), Delhi(In short “CIT(E)”) pertaining to assessment order for 2025-26. Assessee by None Department by Sh. Mukseh Jha,CIT DR Date of hearing 30.06.2025 Date of pronouncement 30.06.2025 2 2. The assessee has raised following grounds of appeal :- 1. That the company LOVE AND CARE FOUNDATION was formed on 31 August 2017 u/s 8 of the companies Act 2013 vide CIN NO U74999DL2017NPL321477 2. That as per sec. 8 of the Companies Act 2013, the companies which are to be registered should carry out charitable objects which are contained in MOA Form No INC.13 3 That it was granted a Provisional Registration on 30-11- 2022 According to FORM 10AC where URN AADCL3765HE2022101 was allotted and is applicable from Assessment year 2023-24 to A.Y. 2025-26 4 That as per FORM 10AC the registration was granted subject to fulfilling certain conditions and which were complied time to time. 5 That as per Serial No 10(j) of the above FORM, the trust or institution shall apply for registration within 6 months of commencement of the activities or at least 6 months prior to the expiry of period of provisional registration, whichever is earlier. 6 That the Trust had applied for registration u/s 12AB in FORM 10AB on 18.09.2023 vide ack, no 3 268302790180923 and replied to the notices issued time to time. 7 That finally a notice issued on 18.03.24 to submit final reply and the assessee replied on 21.03.24 but the registration was rejected and FORM 10AD was issued on 28.03.24 8 That the ground of rejection u/s 12AB where provisional registration vide no AADCL3765HE20221 was also cancelled were as follows :- (1) The Applicant company had not carried out any charitable activity during 2020-21, 2021-22 and 2022-23 (ii) The company has incurred expenses under the head other expenses and the same were related to bank charges (iii) The applicant has not carried out any charitable activity during the previous year and has failed to file any details that the trust society is involved in charitable activity 9 The provisions of section 12AB(1) (b) of the Act stipulate the following conditions for registration where it was mentioned that where the application is made under sub-clause (ii) or sub clause (iii) or sub clause (iv) or sub 4 clause (v) [ or item (B) of sub-clause (vi)] of the said clause (0) Call for such documents or information from the trust or institution or make such inquiries as he think necessary in order to satisfy himself about-(A) The genuineness of activities of the trust or institution and (B) Compliance of such requirement of any other law for the time being in force by the trust or institution as are material for the purpose of achieving its objects. 10 That in reply to above I have to state here under the followings :- (1) That the objects of the trust are charitable in nature as per license issued U/S 8(1) of the companies act 2013 for which license no 109864 has been allotted by the registrar of the companies dated 26-07-2017 as well MOA filed in FORM INC 13 has also been registered with the MCA where all the objects contained therein are charitable in nature. (ii) That it is true that no activity has been carried out by the trust during 2020-21, 2021-22 and 2022-23 and the trust has been allotted a provisional registration for the accounting years 2022-23 to 2024-25 and the accounting year 2024-25 running now and we were planning to start charitable activities but whenever we asked for the donations to the public they straightaway told that first 5 get your trust registered in a way so that we could get a donation receipt in order to claim deduction U/S 80G of the income tax act 1961 (iii) That as per 9(A) above the trust activities should be genuine in nature and as NO ACTIVITIES has been carried out because of above reason then it cannot be said that the activities of the trust are NON-GENUINE. (iv) That the cancellation of registration u/s 12A(1)(ac) (iii) is not justified because as per this section it can be rejected if the trust has not applied for registration at least 6 months prior to expiry of period of the provisional registration and we have applied for registration on 18- 09-2023 whereas the last date to apply was 30-09-2024 because our provisional registration is valid till 31-03- 2025 i.e till assessment year 2025-26. (v) That cancellation of provisional registration is also not justified because it is applicable from Assessment year 2023-24 to 2025-26 that is applicable till 31.03.2025. 3. The brief facts of the case that the assessee is a trust was formed on 31.07.2017 under section 8 of the companies Act, 2013. Provisional registration was granted on 30-11-2022 and URN AADCL3765HE2022101 was allotted to the assessee. The trust has now filed an 6 application on 18.09.2023 in Form 10AB for regular registration u/s 12A(1)(ac)(ii) of the Income Tax Act, 1961. During the proceedings, a questionnaire dated 06.12.2023 was issued to the applicant with a request to furnish certain details / documents/ clarifications in support of its claim for registration u/s.12A(1)(ac)(ii) of the Income Tax Act,1961. The case was fixed for compliance on 21.12.2023 and the applicant has filed submission. Accordingly, the applicant was issued notice dated 18-03-2024, fixing the case for compliance with a request to file certain details/clarification alongwith pending details. In response assessee filed reply. The Ld. CIT(E) after going through the details filed by the assessee observed that assessee has failed to file the requisite details which are given in the impugned order. Accordingly, the Ld. CIT(E) held that as the applicant has failed to satisfy the genuineness of the charitable activities carried out by the application filed in Form 10AB for grant of registration u/s. 12A (1)(ac) (ii) is rejected. 4. Further, the Ld. CIT(E) held that since the application filed in Form 10AB for grant of registration is rejected the provisional registration granted earlier is also cancelled. 7 5. Aggrieved by the order of the Ld. CIT(E), assessee is in appeals before us. 7. At the outset, the Ld. CIT(Exemption), dismissed the application for registration of the assessee as the assessee has failed to file any details which substantiate that the trust is involved in charitable activity. 8. In the interest of justice and fair play we deem fit to remand back to the file of the Ld. CIT(Exemption) with direction to consider the documents if any produced by the assessee during the course of proceedings. The appeals of the assessee are liable to be allowed. 9. In the result, the appeals filed by the assessee are allowed for statistical purpose. Order pronounced in the open court on 30.06.2025 Sd/- Sd/- (MANISH AGARWAL) (SUDHIR KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER *NEHA, Sr. PS* Date:-30.06.2025 Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT(Appeals) ` 5.DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI "