SHRI GOSHALA,GURGAON V. CIT EXEMPTION, CHANDIGARH

ITA 4263/DEL/2025

AI Insights

The case involves Shri Goshala, a charitable organization, appealing against the Commissioner of Income Tax (Exemption)'s rejection of its applications for registration under sections 12AA and 80G of the Income-tax Act, 1961. The Commissioner had rejected the applications based on concerns about the genuineness of the organization's activities, citing issues such as unexplained cash deposits and non-verifiable expenses. The Tribunal, referencing landmark Supreme Court decisions, focused on the objects and proposed activities of the trust rather than the financial transactions questioned by the Commissioner. The Tribunal's decision emphasizes the need for a holistic view of the organization's activities and compliance with legal requirements.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 789600 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 04-07-2025
• Other Referred Cases: CIT Vs. International Hardware and Research Institute (2025) 171 taxmann.com 579(SC), Anand Social and Educational Trust Vs. CIT (2020) 426 ITR 340 (SC)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JITENDER SINGH
• Assessee Lawyers: SANGEETA
• Section: 12AA; 12A; 80G

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘A’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA Nos.4263 & 4262/Del/2025 Assessment Year: NA Shri Goshala, Farrukh Nagar, Jajjar Road, Gurgaon, Haryana Vs. Commissioner of Income Tax (Exemption), Chandigarh PAN: AAGAS9412F (Appellant) (Respondent) ORDER PER SATBEER SINGH GODARA, JM These assessee’s twin appeals ITA No. 4263 & 4262/Del/2025 arise against the Commissioner of Income Tax (Exemption) [in short, the “CIT(E)”], Delhi’s orders, both dated 19.05.2025, having DINs and Notices nos. ITBA/EXM/F /EXM45/2025-26/1076274637(1) and ITBA/EXM/F/EXM45/ 2025-26/1076274818(1), involving proceedings under section Assessee by Ms. Sangeeta, CA Sh. Neeraj Chawla, CA Department by Sh. Jitender Singh, CIT(DR) Date of hearing 18.11.2025 Date of pronouncement 25.11.2025 Printed from counselvise.com ITA Nos.4263 & 4262/Del/2025 2 | P a g e 12AA and 80G and of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’), respectively. Heard both the parties. Case file perused. 2. It emerges during the course of hearing that the assessee is aggrieved against the learned CIT(E)’s action rejecting its section 12AA registration application dated 13.11.2024 vide the following detailed discussion: - “2. In order to examine and verify whether the activities of the applicant society are in accordance with its objects, the genuineness of its activities and compliance with such requirements of any other law for the time being in force as are material for the purpose of achieving its objects, a questionnaire was issued electronically on 15.01.2025 requesting the applicant to furnish the following documents/details online through e-proceedings on e-filing portal along with the supporting documents/evidence, point wise in the sequence by 30.01.2025. 3. In response there to, the applicant has filed its response on 10.02.2025 which was considered but not found tenable for the reasons as discussed in forthcoming paras. 3.1 The perusal of the bank account statement of the applicant as shown below, reflects multiple cash deposits and withdrawals. There is cash deposit of Rs. 1,34,69,600/- within 4 days in FY 2023-2024 and cash deposit of Rs. 1,72,60,000/-within two days in FY 2024- 2025. The money has been debited with narration \"sweep\" which further casts doubts on transparency and traceability of the movement of funds. The volume of the cash deposits is almost at the same time for two successive years and the manner in which these cash transactions are carried out raises serious concerns about the genuineness of the activity of the society. The income receipts submitted by the applicant as evidence of its claim are not even the one-day cash deposit in the bank account of the assessee. The cash deposit extends to every account the applicant is maintaining. Even if they are considered to be current assests, the declaration regarding the same in the financials are much less than the actual amount debited from the bank account. Printed from counselvise.com ITA Nos.4263 & 4262/Del/2025 3 | P a g e Printed from counselvise.com ITA Nos.4263 & 4262/Del/2025 4 | P a g e From the perusal of the above, it is clear that the applicant has not purchased any current asset lying with Bank of Baroda-at least not for the amount as evident from the bank statement. In these circumstances, the manner of cash deposits and their subsequent debit in other accounts raise a huge doubt about the financial propriety and transparency in the conduct of charitable activities. 3.2 Further, the income and expenditure account for the year ending March 2024 shows salary payable to the tune of 1.04 Cr. However, the scale of expenses of other activities such as Electricity and water expenses are not commensurate with the salary expenses to maintain the cattle shelter. The bills and evidences provided in support of its expenses miserably failed to substantiate the expenditure recorded. Printed from counselvise.com ITA Nos.4263 & 4262/Del/2025 5 | P a g e 3.3 Further, the applicant has shown a website in its assets. When searched on internet no such website was available. From public domain, the activity of the applicant was searched. It was gathered that the expenditure claimed and the deposits received in the bank account do not match the scale on which the activity is claimed to be conducted. 3.4 The case of the applicant is driven by huge unexplained deposits and opaque withdrawals, non-verifiable expenses and income receipts. This has totally weakened the claim of the applicant of conducting genuine activity. In this digital era, the need to deposit and withdraw cash, unless they are petty cases only indicate that these transactions are intended to be carried out in an untraceable manner leading to the possibility of accounts being used for money laundering. There is not a single voucher of income receipts showing the donation to the extent in which the cash was deposited in the bank account of the applicant. In that scenario, it is difficult for the undersigned to believe the activities to be genuine. 4. In view of the above discussions, the present application of the applicant filed in Form 10AB under ITEM-B of clause (vi) of sub-section (1) of section 12A is rejected as the activity of the applicant are not Printed from counselvise.com ITA Nos.4263 & 4262/Del/2025 6 | P a g e found to be genuine. Accordingly, the application filed by the applicant for approval u/s 12AB of the Act is hereby disposed of as rejected, which rejection and consequent lack of approval shall supersede any approval granted u/s 12AB of the Act by any authority at any earlier time.” 3. We have given our thoughtful consideration to the assessee’s and the Revenue’s vehement submissions. Learned CIT(DR), more particularly, strongly submits that the assessee has been rightly declined section 12AA registration as it had failed to explain the cash deposits made in its bank account maintained with Bank of Baroda. The Revenue could hardly dispute that the learned CIT(E)’s impugned order has nowhere questioned either the assessee’s object clauses or it’s Gaushala’s principle activity all along. We reiterate that what all the learned CIT(A)’s exemption has done is to doubt the assessee’s cash deposits by finding fault in its explanation as well as after allegedly searching for some material to this effect on internet. We are of the considered view in this factual backdrop that their lordships’ recent landmark decisions i.e. CIT Vs. International Hardware and Research Institute (2025) 171 taxmann.com 579(SC) and Anand Social and Educational Trust Vs. CIT (2020) 426 ITR 340 (SC) have already settled the issue that the CIT(E) is required to examine the objects of the trust and Printed from counselvise.com ITA Nos.4263 & 4262/Del/2025 7 | P a g e the “proposed” activities only. We thus find merit in the assessee’s instant sole substantive ground to hold it eligible for section 12AA registration which is hereby granted in very terms subject to the condition that it shall indeed be open for the learned Assessing Officer to examine and verify the very issue in appropriate proceedings as per law. Same order to follow in its section 80G appeal ITA No. 4262/Del/2025 as well being consequential in nature. 4. These assessee’s twin appeals ITA Nos.4262/Del/2025 and 4263/Del/2025 are allowed in above terms. A copy of this common order be placed in the respective case files. Order pronounced in the open court on 25th November, 2025 Sd/- Sd/- (S. RIFAUR RAHMAN) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 25th November, 2025. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi Printed from counselvise.com "