NANHI PARI FOUNDATION,MUMBAI vs. ITO (EXEMPTIONS), MUMBAI

This appeal by the assessee is directed against the order dated 12.09.2025 passed by the learned Commissioner of Income Tax (Exemptions), Mumbai [“Ld. CIT(E)”] under section 12AB(4) of the Income-tax Act, 1961, cancelling the registration granted to the assessee under section 12A of the Act.

The assessee has raised several grounds challenging the cancellation of its registration. In substance, the assessee contends that the Ld. CIT(E) erred in treating the donations made to Omkar Andh Apang Samajik Sanstha as non-genuine and in relying upon third-party investigation material without granting an opportunity of cross- examination. The assessee has also challenged the cancellation of registration with retrospective effect.

The appeal has been filed with a delay of 85 days. The assessee has explained that the delay occurred due to the medical condition of one of its trustees, absence of dedicated legal personnel and lack of awareness regarding the prescribed period for filing the appeal. Having considered the condonation petition, we are satisfied that the delay was neither deliberate nor mala fide. Accordingly, the delay is condoned and the appeal is admitted.

When the appeal was called for hearing, none appeared on behalf of the assessee. This was the third occasion on which the appeal was fixed for hearing. We, therefore, proceed to dispose of the appeal after hearing the Ld. Departmental Representative and considering the material available on record.

Brief facts are that the assessee-trust was granted registration under section 12A(1)(ac)(i) on 24.09.2021. Information received by the Ld. CIT(E) revealed that the assessee had donated Rs.63,83,800 to Omkar Andh Apang Samajik Sanstha on 18 occasions during the financial years 2022-23 and 2023-24, including Rs.54,48,800 during the financial year 2022-23. Investigation conducted in the case of the recipient trust indicated that it was engaged in providing accommodation entries by receiving donations through banking channels and returning the amounts in cash after deducting commission.

During the proceedings before the Ld. CIT(E), the assessee was called upon to establish the genuineness and charitable purpose of the donations. However, it did not furnish any memorandum of understanding, agreement, utilisation certificate, details of beneficiaries or other contemporaneous evidence. The unsigned and undated letters produced by the assessee referred only to the requirement of clothes and sweet boxes and did not substantiate the donations recorded under educational and medical relief. The Ld. CIT(E), therefore, held that the assessee had committed a specified violation within the meaning of section 12AB(4) and cancelled its registration.

The Ld. Departmental Representative supported the impugned order and submitted that the Ld. CIT(E) had granted adequate opportunities to the assessee and passed a detailed and speaking order after considering its replies and the investigation material.

We have considered the material available on record. There is no dispute that a genuine donation by one charitable trust to another may constitute application of income. However, the assessee is required to establish that such donation was genuinely made for charitable purposes. In the present case, substantial amounts were transferred to the recipient trust on 18 occasions without any credible documentary evidence regarding their purpose or utilisation. The material gathered during investigation further showed that the recipient trust was involved in providing accommodation entries.

We find that the Ld. CIT(E) did not rely merely upon allegations concerning a third party. His conclusion is also based upon the assessee’s repeated transactions, absence of supporting documents and failure to satisfactorily explain the purpose and utilisation of the funds. Despite three opportunities of hearing before us, the assessee has neither

Accordingly, the order of the Ld. CIT(E) cancelling the registration granted to the assessee under section 12A of the Act is upheld and the grounds raised by the assessee are dismissed.

In the result, the appeal filed by the assessee is dismissed.