M/S LALA SHER SINGH MEMORIAL JEEVAN TRUST SOCIETH,NEW DELHI vs. PCIT (CENTRAL ) -3, NEW DELHI

ITA 5041/DEL/2026Status: DisposedITAT Delhi11 August 202634 pages
AI SummaryAllowed

What were the facts?

The assessee, M/s Lala Sher Singh Memorial Jeevan Trust Society, and M/s Florence Nightingale Educational Society, filed applications in Form 10AB for registration under Section 12A(1)(ac)(ii) and Section 80G(5)(ii) of the Income Tax Act, 1961. These applications were rejected by the Principal Commissioner of Income Tax (PCIT), Central-3, New Delhi. The assessee had previously held registrations under Section 12AA and Section 80G, which were later cancelled retrospectively by the PCIT. An appeal against this cancellation was allowed by the ITAT, restoring the registration, but the Revenue's appeal against this order is pending before the High Court. The present appeals challenge the rejection of the fresh applications filed after the ITAT's order.

What did the Tribunal hold?

The Tribunal held that the PCIT had exercised powers beyond his jurisdiction in rejecting the applications. The Tribunal noted that a previous order cancelling the assessee's registration on similar grounds was quashed by a Co-ordinate Bench, and the Revenue's appeal against that order was pending before the High Court. Therefore, the situation where the order quashing the impugned order by the PCIT still held sway meant that further rejection on the same grounds was not appreciated. The Tribunal reiterated that competent authorities are required to confine their examination to the charitable nature of the trust's objects and the genuineness of its activities at the time of granting or renewing registration. The Tribunal found that the PCIT's allegations of 'specified violation' and 'diversion of funds' were neither supported by any provision of law nor by any judicial precedent at this stage. It was held that such issues fall within the domain of the Assessing Officer during the assessment proceedings, not at the stage of registration or renewal. Consequently, the impugned order was found to be arbitrary, whimsical, erroneous, and devoid of jurisdiction. The Tribunal quashed the impugned order and directed the Competent Authority to grant the registration/renewal forthwith. The appeals were allowed.

What were the issues?

1. Whether the Principal Commissioner of Income Tax (PCIT) has the jurisdiction to reject the application for registration/renewal under Section 12A(1)(ac)(ii) and Section 80G(5)(ii) on grounds of 'specified violation' and 'diversion of funds' when a previous order cancelling registration on similar grounds was quashed by the Tribunal and the Revenue's appeal is pending before the High Court. (Question of law turning on Section 12A(1)(ac)(ii) and Section 80G(5)(ii)). Assessee's contentions: - The PCIT acted beyond his jurisdiction by rejecting the applications on grounds that were already adjudicated and quashed by the Tribunal. - The PCIT failed to adhere to judicial discipline, especially when the prior order of cancellation was set aside and the Revenue's appeal was pending. - The PCIT's scope of inquiry at the stage of registration/renewal is limited to examining the charitable nature of objects and genuineness of activities, not to delve into violations of Section 13, which is the domain of the Assessing Officer during assessment. - Reliance was placed on the case of M/s Meenakshi Foundation Vs. PCIT, Central-3, Delhi, and Fateh Chand Trust Vs. CIT (Exemption). Revenue's contentions: - The judgment records no specific contentions for the Revenue.

Which sections of the Income-tax Act were involved?

Section 12A(1)(ac)(ii),Section 80G(5)(ii),Section 12AA,Section 12AB(4),Section 132(1),Section 127,Section 13(1)(c),Section 2(15),Section 17A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “B”: NEW DELHI

Before: MS MADHUMITA ROY & SHRI KRINWANT SAHAY

For Appellant: Adv and Shri
Hearing: 01/07/2026Pronounced: 11/08/2026

Heard together (4 matters)

ITA Nos. 5040/Del/2026
ITA Nos. 5041/Del/2026
ITA Nos.5042 /Del/2026
ITA Nos. 5043/Del/2026

Read from the judgment's own cause title. This page is filed under one of them.

PER MADHUMITA ROY, JM:

All the appeals filed by the Assessees are directed against the orders passed by the Ld. PCIT, Central-3 New Delhi whereby and whereunder the application dated 25.09.2025 filed by the Assessee Trust

in Form No. 10AB for grant of registration under Section 12A(1)(ac)(ii) of th

The order continues below.

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