SAU PUSHPADEVI VISHWANATH BHOOT SMURTI CHARITABLE TRUST,WARDHA V. ITO WARD-1, EXEMP, NAGPUR

ITA 120/NAG/2025

AI Insights

The case involves Sau Pushpadevi Vishwanath Bhoot Smurti Charitable Trust, which appealed against the decision of the Commissioner of Income Tax (Exemption), Pune, who rejected their application for registration under section 12AB of the Income Tax Act, 1961. The rejection was primarily based on the grounds that the trust had generated a large surplus over the last three financial years, which had not been utilized for charitable purposes. The Tribunal considered the arguments and evidence presented by both parties, including the trust deed and the financial details of the trust, and referenced several precedents set by the Hon'ble Apex Court regarding the registration of charitable trusts.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 843909 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2025-2026
• Appeal Filed On: 20-02-2025
• Other Referred Cases: Anand Social and Education Trust vs. CIT, CIT vs. International Healthcare Education and Research Institute
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PANKAJ KUMAR
• Assessee Lawyers: MAHAVIR ATAL
• Keywords: Set aside; Charitable institution
• Section: 11; 12AA; 10

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “NAGPUR” BENCH, NAGPUR BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER & SHRI KHETTRA MOHAN ROY, ACCOUNTANT MEMBER ITA No. 120/NAG/2025 (A.Y.: NA) (Physical hearing) Sau Pushpadevi Vishwanath Bhoot Smurti Charitable Trust MIDC, B/19 Sewagram Road, Wardha – 442003 PAN: AAWTS9285P Vs ITO Ward-1, (Exemption) BSNL, RTTC Building, Near Balaji Mandir, Seminary Hills, Nagpur – 440006. Appellant /Assessee Respondent /Revenue Assessee by Shri Mahavir Atal, CA Revenue by Shri Pankaj Kumar, CIT-DR Date of hearing 20.02.2026 Date of pronouncement 16.03.2026 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of ld. Commissioner of Income Tax (Exemption), Pune [for short “CIT(E)”], in rejecting the application for registration of trust u/s. 12AB of the Income Tax Act, 1961 (the Act), in order dated 23.12.2024. 2. Rival submissions of both the parties have been heard and record perused.The ld. Authorised Representative (AR) of the assessee submits that the assessee is a charitable trust/institution and engaged in the charitable activities. The assessee filed an application for registration of trust u/s. 12AB, in form 10AD on 28.06.2024. Along with the application, the assessee furnished required details with necessary evidence. The application of assessee was rejected by ld. CIT(E) by taking view that assessee trust Printed from counselvise.com ITA No.120/Nag/2025 Sau Pushpadevi Vishwanath Bhoo tSmurti Charitable Trust 2 generated large surplus over last three financial years, which have not been utilized for charitable purposes. And that the assessee has significant surplus of Rs. 1.78 lakhs which were transferred to the balance sheet. The assessee failed to furnish adequate details and evidences for conducting charitable activities. The ld. CIT(E) also held that assessee trust failed to demonstrate genuine charitable activity of proper utilisation of its income for charitable purposes. The ld. AR of the assessee submits that assessee trust was set up for the purpose of performing charitable activities. Copy of trust deed was furnished. It is settled position in law that at the time of granting registration u/s. 12AB, the ld. CIT(E) is required to examine the object of trust and not the application of income which has to be seen by Assessing Officer (AO) on year to year basis on claiming exemption u/s. 11. The object of assessee is not doubted. The assessee is undertaking its activity in furtherance of its object. Hence, the assessee was eligible for availing registration u/s. 12AB of the Act. The ld. AR of the assessee further submits that Hon'ble Apex Court in Anand Social and Education Trust vs. CIT [426 ITR 340/[2020] 114 taxmann.com 693 (SC)], held that even without any activities having been undertaken by the trust, it is possible to consider whether trust could be registered u/s. 12AA. Further, in CIT vs. International Healthcare Education and Research Institute in Civil Appeal No. 19528/2018, the Hon'ble Apex Court held that mere registration u/s. 12AA automatically does not entitle in charitable trust to claim exemption u/s. 10 and 11 of the Act. When return is filed by the assessee trust claiming exemption, it is for the AO to look into all the material and set aside itself whether exemption has been claimed Printed from counselvise.com ITA No.120/Nag/2025 Sau Pushpadevi Vishwanath Bhoo tSmurti Charitable Trust 3 genuinely or not. If the AO is not convinced, it is always open for him to decline grant of exemption. The ld. AR of the assessee reiterated that application of income has to be examined by AO on year to year basis while allowing exemption u/s. 11 of the Act. The ld. AR of the assessee submits that in view of the decision relied by him, the ld. CIT(E) may be directed to allow registration u/s. 12AB and also to restore provisional registration till passing final order. 3. On the other hand, ld. Commissioner of Income Tax- departmental representative (CIT-DR) for revenue supported the order of ld. CIT(E). The CIT-DR for the revenue submits that at the time of registration of assessee trust u/s. 12AB of the Act, the ld. CIT(E) is entitled to seek details on objects and the activities carried out by the assessee. The ld. CIT(E) in his order clearly held that assessee was having sufficient surplus which was not incurred on the activities. The ratio decisions relied upon by ld. AR of the assessee is not applicable on the facts of the present case. 4. We have considered the rival submissions of both the parties and have seen the order of ld. CIT(E). We find that while examining the application of assessee, the ld. CIT(E) recorded that no charitable activities have been carried out by assessee trust and last surplus is generated without utilising the same on activities. Further, large sums are shown as payable to one Wareo Realities Pvt. Ltd. We find that object of the assessee has not been doubted. The ld. CIT(E) doubted the activities by taking view that assessee has significant surplus of Rs. 1.78 lakhs which is transferred to balance sheet. On the basis of the aforesaid observation, the ld. CIT(E) took his view that Printed from counselvise.com ITA No.120/Nag/2025 Sau Pushpadevi Vishwanath Bhoo tSmurti Charitable Trust 4 minimal funds are applied towards charitable purposes. We find that Hon'ble Apex Court in Anand Social and Education Trust vs. CIT (supra) held that even without any activities having been undertaken by trust, it is possible to consider trust for registration u/s. 12AA. Similarly, in CIT vs. International Health Care Education and Research Institute (supra), the Hon'ble Apex Court held that mere registration u/s. 12AA automatically does not entitle the charitable trust to claim exemption u/s. 10 and 11 of the Act. It is for AO, when return is filed for claiming exemption to look into all the material and satisfied himself whether the exemption has been claimed genuinely or not. If the AO is not convinced, it is open for him to decline allowance of exemption. Thus, in view of aforesaid factual and legal position, we direct the ld. CIT(E) to consider the matter afresh and pass the order in accordance with law after considering the decision of the Hon'ble Apex Court in Anand Social and Education Trust vs. CIT (supra). Needless to direct that before passing the order afresh, the ld. CIT(E) shall allow fair and reasonable opportunity to the assessee. In the result, the grounds of appeal raised by the assessee are allowed for statistical purpose. 5. In result, the appeal of assessee is allowed for statistical purposes. Order was pronounced on 16.03.2026 as per Rule 34 of the Income Tax (Appellate Tribunal) Rules, 1963. Sd/- KHETTRA MOHAN ROY ACCOUNTANT MEMBER Sd/- PAWAN SINGH JUDICIAL MEMBER Mumbai, Dated: 16/03/2026 Karishma J. Pawar, SR. PS Printed from counselvise.com ITA No.120/Nag/2025 Sau Pushpadevi Vishwanath Bhoo tSmurti Charitable Trust 5 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Nagpur; and (5) Guard file. By Order Assistant Registrar/Senior Private Secretary ITAT, Nagpur Printed from counselvise.com "