NEW DIVINE EDUCATIONAL SOCIETY,DLEHI vs. CIT (EXEMPTION), DELHI

PDF · subscribers
ITA 8835/DEL/2025Status: DisposedITAT Delhi10 August 2026AY 2027-286 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(E) erred in rejecting the renewal application without proper appreciation of evidence and by drawing adverse inferences without adequate opportunity. The Tribunal found that the CIT(E) should have considered the prima facie genuineness of activities at the registration stage.

What were the facts?

The assessee, New Divine Educational Society, filed an application for renewal of registration under Section 12AB of the Income Tax Act. The CIT(E) rejected the application, citing issues with verifying the genuineness of activities and adverse inferences on unsecured loans.

What were the issues?

Whether the CIT(E) was justified in rejecting the renewal of registration under Section 12AB based on insufficient verification of activities and adverse inferences on loans without providing adequate opportunity to the assessee.

Which sections of the Income-tax Act were involved?

Section 12AB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES “A” NEW DELHI

For Appellant: Shri Saurabh Rastogi, Advocate
For Respondent: Shri Jitender Singh, CIT, DR
Pronounced: 10.08.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES “A” NEW DELHI SHRI M. BALAGANESH, ACCOUNTANT MEMBER & MS. KAVITHA RAJAGOPAL, JUDICIAL MEMBER ITA No.8835/Del/2025 Assessment Year : 2027-28 New Divine Educational Commissioner of Income Tax Society, (Exemptions), FNo.6-C, Pocket-B, New Delhi 6D, 96 Kondli Diary Farm, v/s Mayur Vihar Phase-III, Delhi – 110 0096. PAN: AAAAN6025D Appellant Respondent Assessee by Shri Saurabh Rastogi, Advocate Department by Shri Jitender Singh, CIT, DR 01.06.2026 Date of Hearing Date of Pronouncement 10.08.2026

ORDER Per Kavitha Rajagopal, J M:

This appeal is filed by the assessee, challenging the order of the Learned Commissioner of Income Tax (Exemptions) [‘Ld. CIT(E)’ for short], passed u/s. 12AB (1)(b)(ii)(B) of the Income Tax Act, 1961 (‘the Act').

2.

The assessee has raised the following grounds of appeal: “1. The learned CIT (Exemption) erred in law and on facts in rejecting the application filed in Form 10AB u/s 12A(1)(ac)(ii). The impugned order is illegal, arbitrary and passed without proper appreciation of evidence.

2 ITA No.8835/Del/2025 New Divine Educational Society vs. CIT(E) 2. The learned CIT(E) failed to appreciate that the Appellant Society is already registered under Section 12A and has been carrying on charitable activities consistently; therefore, renewal cannot be rejected without clear findings of non-genuineness or non-charitable purpose. 3. The CIT(E) erred in concluding that the genuineness of activities could not be verified merely because some vouchers, photographs, or confirmations were not furnished, ignoring that the Society had submitted details and was ready to provide remaining documents. 4. The CIT(E) erred in drawing adverse inference on unsecured loans without considering explanations provided, and without giving adequate opportunity to furnish additional confirmations, loan agreements, and supporting documents. 5. The CIT(E) erred in doubting the purpose of UPSIDC land acquisition despite the fact that the land is intended strictly for educational activities omniscitsya core object of the Society. 6. The finding that activities are not genuine is perverse, unsupported by material evidence, and contrary to judicial precedents that at the stage of 12A registration/renewal, activities need only be examined on a prima facie basis. 7. The CIT(E) erred in treating the application of income (pertaining to loan- funded land purchase) as incorrect for the purpose of deciding registration, although such examination pertains only to assessment proceedings and not registration conditions. 8. The order suffers from violation of principles of natural justice, as adequate and reasonable opportunity was not granted to furnish explanations and documents, especially considering the volume of information demanded. 9. The CIT(E) erred in rejecting the application despite failure to point out any deviation from the charitable objects, misuse of funds, or activities contrary to Section 2(15). 10. The CIT(E) erred in ignoring that minor procedural deficiencies cannot be grounds for rejecting renewal once charitable intent and activities are established. 11. The Appellant reserves the right to add, modify, or alter any grounds at the time of hearing.”

3 ITA No.8835/Del/2025 New Divine Educational Society vs. CIT(E) 3. The brief facts are that the assessee Society was incorporated on 14.03.2008 with the Registrar of Societies, Government of NCT of Delhi and had obtained registration under Section 12A(1)(ac)(i) of the Act dated 23.09.2021 for a period commencing from AY 2022-23 to 2026-27. The assessee had filed an application dated 30.06.2025 in Form 10AB for renewal of registration under Section 12A(1)(ac)(ii) of the Act before the Ld.CIT(E), who had sought various details from the assessee which, according to the Ld.CIT(E) has not been filed completely with all relevant documentary evidences. The Ld.CIT(E) observed that the assessee has shown unsecured loans from various entities for which the purpose of availing the said loans was asked by the Ld.CIT(E). The Ld.CIT(E) has stated in his order that only the details of M/s Om Shri Sai Shiksha Samiti was given by the assessee stating that it was for the purpose of purchasing land from Uttar Pradesh State Industrial Development Corporation (UPSIDC) for the purpose of education, but, had not submitted further details of the other lenders along with documentary evidences. Further, the Ld.CIT(E) also disputed the purpose of acquiring the land from UPSIDC.

4.

The Ld. CIT(E) also observed that the assessee has failed to submit the bills/vouchers of expenses incurred for the activities of the assessee Society such as free food distribution, free health check up camp, job-oriented skill development training programme, road safety awareness, vocational training, art & culture programme, free education awareness programme, free mask & sanitizer

4 ITA No.8835/Del/2025 New Divine Educational Society vs. CIT(E) distribution, free distribution of blanket and winter clothes, etc. The Ld. CIT(E) also contended that the assessee has not submitted complete details of Society’s bank account statement and has also not shown expenses on account of charitable activities during FY 2022-23 and 2023-24 and in FY 2024-25 it has shown an expense of Rs.38,440/- on account of charitable activities for which no corresponding debit entries were seen in the assessee’s HDFC account. The Ld.CIT(E) disputed the genuineness of the expenses claimed by the assessee. The Ld.CIT(E) also contended that the assessee has claimed incorrect application of income during the financial year. The Ld.CIT(E) rejected the assessee’s application on the basis that the assessee has failed to establish the genuineness of the activities undertaken along with its objects with cogent documentary evidences. Aggrieved, the assessee is in appeal before us challenging the impugned order of the Ld.CIT(E).

5.

We have heard the rival submissions and perused the material available on record. It is observed that the Ld. CIT(E) has rejected the assessee’s claim for registration u/s 12A on the ground that since the assessee has already commenced its activities before filing of the said application, it ought to have established the genuineness of its activities along with the objects of the assessee society. The Ld.CIT(E) has also proceeded to reject the assessee’s claim for registration on the ground that the assessee has failed to furnish all supporting documentary evidences in support of its claim which includes the purpose of the substantial amount of

5 ITA No.8835/Del/2025 New Divine Educational Society vs. CIT(E) unsecured loan availed by the assessee from various parties and also the purpose for acquiring land from UPSIDC, thereby concluding that the assessee has failed to establish the objects of the assessee society along with the genuineness of its activities.

6.

Before us, the Ld. AR for the assessee prayed that the assessee be given one more opportunity before the Ld. CIT(E) to establish the claim of the assessee with all relevant documentary evidences. The Ld. DR objected to remanding the issue to the file of the Ld.CIT(A) for the reason that the assessee was given several opportunities despite which the assessee has not filed complete details of its activities.

7.

In the above facts of the case, we deem it fit to extend the assessee one more opportunity to file all the relevant documentary evidences as sought for by the Ld.CIT(E) basis which the Ld.CIT(E) shall decide the claim of registration on the basis of the submissions made by the assessee, as per the merits and in accordance with the law. The Ld.CIT(E) shall also take into consideration various judicial precedents of the Hon’ble High Courts and the Apex Court wherein it has been held that at the time of registration, the Ld.CIT(E) should take into consideration the objects of the Society and the genuineness of its activities rather than making a roving inquiry on

6 ITA No.8835/Del/2025 New Divine Educational Society vs. CIT(E) the issues which shall be the subject of assessment, if any. Hence, the grounds of appeal raised by the assessee are hereby allowed for statistical purpose.

8.

In the result, the appeal filed by the assessee is hereby allowed for statistical purpose.

Order pronounced in the open court on 10.08.2026.

Sd/- Sd/- (M. BALAGANESH) (KAVITHA RAJAGOPAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 10th August, 2026 dk

Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(A) 4. Dr, ITAT, Mumbai 5. Guard File. BY ORDER, //True COPY// (Assistant Registrar) ITAT, Delhi Benches

More judgments on Section 12AB

All 5,972 judgments and leading authorities on Section 12AB →

Recent GST High Court judgments

Search GST case law →