UTSAV EDUCATIONAL AND CULTURAL SOCIETY,DELHI vs. CIT(E), NEW DELHI

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ITA 5051/DEL/2026Status: DisposedITAT Delhi19 August 20267 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(E) erred in applying a newly inserted clause retrospectively to a registration granted prior to its insertion. The Tribunal also noted the assessee's long-standing registration and continuous filing of returns.

What were the facts?

The assessee, Utsav Educational and Cultural Society, applied for registration under Section 12AB of the Income Tax Act. The CIT(E) rejected the application, citing a 'specified violation' for not having regular registration prior to April 1, 2021, and applying a clause inserted in April 2023 retrospectively.

What were the issues?

Whether a newly inserted clause in Section 12AB can be applied retrospectively to deny registration. Whether the CIT(E) correctly interpreted 'specified violation' in the context of the assessee's prior registration and activities.

Which sections of the Income-tax Act were involved?

Section 12AB,Section 12A,Section 80G,Section 2(15)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘B’ NEW DELHI

Before: MS. MADHUMITA ROY & SH. KRINWANT SAHAY

Hearing: 30.06.2026Pronounced: 19.08.2026

PER KRINWANT SAHAY AM

Appeal in this case has been filed by the assessee against the order dated 16.03.2026 passed by the CIT(E), Delhi. Grounds of appeal are as under :- 1. That the order dated 16.03.2026 passed by the CIT(Exemptions), Delhi u/s. 12Ab (1)(b) (ii) (B) of the Income Tax Act, 1961 rejecting the application for registration u/s

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12A(1)(ac)(vi)-Item(B) is in law, contrary to facts, arbitrary and deserves to be set aside. 2.. That the Learned CIT(Exemptions) grossly erred in holding that the non-possession of a regular registration order u/s 12A prior to 01.04.2021 constitutes a 'specified violation' under clause (g) to the Explanation to sub-section (4) of Section 12AB of the Income Tax Act, 1961. Clause (g) was inserted by the Finance Act, 2023 with effect from 01.04.2023 and the Learned CIT(Exemptions) erred in applying it retrospectively to a registration that was validly granted on 31.05.2021. 3.. That the Learned CIT(Exemptions) failed to appreciate that the appellant duly applied for and obtained registration u/s 12A(1)(ac) (1) from the PCIT/CIT, CPC vide order dated 31.05.2021 bearing URN 'AAAAU1811AE20214' for Assessment Years 2022-23 to 2026-27. This registration was a valid and subsisting registration granted by a competent authority, and the same cannot be treated as a 'specified violation' under law. 4.. That the Learned CIT(Exemptions) erred in ignoring the original registration of the appellant as a charitable trust granted vide order of the ITO(Exemptions) bearing letter no. DI(E)- 174/91/700 dated 15.05.1991. The fact that the physical copy of the handwritten registration certificate could not be produced by the appellant does not negate the existence and validity of the said registration, particularly when the registration number is available and the departmental records ought to contain the same. 5.. That the Learned CIT(Exemptions) failed to appreciate that the appellant has been continuously filing Income Tax Returns as a Charitable Trust since 1991 and the same have been accepted by the Income Tax Department both manually and through the CPC. The consistent acceptance of the appellant's returns as a charitable trust conclusively establishes its status as a recognised charitable institution. 6.. That the Learned CIT(Exemptions) erred in not considering the charitable nature of the appellant's activities, viz., imparting training and systematic education in classical Odissi dance since 1987, which falls squarely within the definition of 'charitable purpose' under Section 2(15) of the Income Tax Act, 1961. 7.. That the Learned CIT(Exemptions) has taken an unduly technical and hyper-technical view of the matter, causing grave 2 | P a g e

injustice to a bona fide charitable institution that has been faithfully serving the cause of classical arts and education for nearly four decades. The rejection of the application for re- registration prejudices the appellant and adversely affects its charitable activities. 8. That the rejection of the application for registration w/s 12A(1)(ac)(vi)-Item(B) has consequentially and automatically resulted in the rejection of the appellant's application for approval u/s 80G of the Income Tax Act, 1961. The appellant prays that the registration u's 12A and approval u/s 80G, as applied for, may kindly be granted. 9.. That the initiation of separate cancellation proceedings against the registration vide URN 'AAAAU1811AE20214' dated 31.05.2021 is premature, unwarranted, and contrary to law, particularly when the appellant has been continuously and genuinely engaged in charitable activities since 1987, which were accepted by the Department throughout. 10.. That the appellant craves leave to add, amend, alter, or withdraw any or all grounds of appeal at or before the time of hearing.

2.

The only issue involved in the grounds of appeal is against the rejection of registration u/s.12AB of the Act by the Ld. CIT(E), Delhi. The Ld. CIT(A) has given his finding for rejecting the registration of the assessee trust in his order which is as under :-

“2. On perusal of submissions filed by the applicant, it is found that the applicant did not obtain regular registration u/s 12A prior to 01.04.2021. However, the applicant has obtained regular registration u/s 12A from CPC vide order dated 31.05.2021 having URN 'AAAAU1811AE20214' for the period from A.Y. 2022-23 to Α.Υ. 2026-27 without having any order of registration u/s 12A prior to 01.04.2021. This is a specified violation as per clause(g) to Explanation to sub section (4) of 12AB of IT Act. 3 | P a g e

3.

In view of the above, the application filed in Form 10AB for regular registration u/s 12A(1)(ac)(vi)-Item(B) is not maintainable at this stage, accordingly the same is hereby rejected. Further, cancellation proceeding is being initiated separately to cancel the regular registration obtained by the applicant u/s 12A(1) (ac) (i) from CPC vide order dated 31.05.2021 having URN 'AAAAU1811AE20214' for the period from A.Y. 2026-2A.Y. 2022-23 to A.Y. 2026-27.”

3.

During proceedings before us the Ld. Counsel of the assessee argued on the line of statement of facts that has been filed alongwith appeal which is reproduced as under :-

1.. The appellant, Utsav Educational and Cultural Society (PAN: AAAAU1811A), is a society registered on 2nd September 1987 with the Registrar of Societies, Delhi. The appellant has been being its Income Tax Returns as a Charitable Trust since 1991 under Income Tax PAN AAAAU1811A, pursuant to the registration granted vide order of the Income Tax Officer (Exemptions) bearing letter no. DI(E)-174/91/700 dated 15.05.1991. 2... The assessee has been engaged in providing and imparting systematic education and training in classical Odissi dance and related disciplines, which constitutes a charitable activity under the Income Tax Act, 1961. The appellant has been consistently recognised as a charitable institution by the Department, both manually and through the Centralised Processing Centre (CPC). 3.. The assessee was granted registration u/s 12A(1)(ac) (i) for Assessment Years 2022-23 to 2026-27 vide order bearing URN 'AAAAU1811AE20214' dated 31.05.2021, which was passed by the Principal Commissioner/CIT, CPC. 4.. The appellant filed an application in Form 10AB on 22nd September 2025 before the CIT(Exemptions), Delhi, seeking renewal/regular registration u/s 12A(1)(ac) of the Income Tax Act, 1961.

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5.. The CIT(Exemptions), Delhi issued notices dated 21.01.2026 and 26.02.2026, calling upon the appellant to furnish certain documents, details and clarifications. The appellant responded diligently through the ITBA portal, and the submissions were taken on record by the authority. 6.. By the impugned Order dated 16.03.2026 passed u/s 12AB(1)(b)(ii)(B) of the Income Tax Act, 1961, the CIT(Exemptions), Delhi rejected the appellant's application for regular registration on the sole ground that the appellant did not obtain regular registration u/s 12A prior to 01.04.2021, and that the registration obtained vide URN 'AAAAU1811AE20214' dated 31.05.2021 constitutes a 'specified violation' under clause (g) to the Explanation to sub-section (4) of Section 12AB of the Act. 7.. The CIT(Exemptions) further indicated that cancellation proceedings would be initiated separately to cancel the regular registration obtained vide order dated 31.05.2021 having URN 'AAAAU1811AE20214' for the period A.Y. 2022-23 to A.Y. 2026- 27. Since the application for re-registration u/s 12A was rejected, the application u/s 80G was also automatically rejected. 8.. The impugned rejection order is bad in law, factually incorrect, and fails to appreciate the genuine charitable activities of the appellant carried on since 1987. Being aggrieved by the said order, the appellant prefers this appeal before the Hon'ble Income Tax Appellate Tribunal.

4.

The Ld. Counsel of the assessee also submitted that before the Bench that the assessee trust is engaged in charitable activities since 1987 which was accepted by the department throughout. But suddenly the rejection of application for registration u/s.12A of the Act may result in rejection of application for registration u/s.80G of the Act also. The Ld. Counsel also made a prayer to the Bench that

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the matter may be remanded back to the file of the Ld. CIT(E) for reconsideration.

5.

Per contra the ld. DR relied on the order of the Ld. CIT(E).

6.

We have heard both the parties in detail and we have also considered the documents and details and order of the Ld. CIT(E) filed on record. We are of this considered view, the natural justice demands that the Ld. CIT(E) should reconsider the application filed for registration u/s. 12A of the Act by the assessee because CIT(E) has brought nothing on record to show that assessee trust is not involved in charitable activities. Accordingly, the case is remanded back to the file of the Ld. CIT(E) for fresh order.

7.

In the result, the appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the Court on 19.08.2026.

Sd/- Sd/-SD

(MADHUMITA ROY) (KRINWANT SAHAY) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated :19/08/2026 *Neha Sr. PS*

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