SWARUP CHARITABLE TRUST ,DELHI vs. CIT(E), DELHI

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ITA 8108/DEL/2025Status: DisposedITAT Delhi24 July 20264 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the CIT(E) should have waited for the completion of the construction and verification of the charitable work before rejecting the registration. The cancellation of registration before the building was complete and allocated was deemed unjustified.

What were the facts?

The Swarup Charitable Trust applied for renewal of provisional registration under sections 12AB and 80G. The CIT(E) rejected the application, citing that the trust had not undertaken any charitable activity since its inception and that its objective of constructing and leasing residential houses for the poor appeared commercial.

What were the issues?

Whether the CIT(E) was justified in rejecting the renewal of registration for a charitable trust based on non-commencement of activities and perceived commercial objectives before the completion of its projects.

Which sections of the Income-tax Act were involved?

Section 12AB,Section 80G

AI-generated summary — verify with the full judgment below

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

Before: SH. SATBEER SINGH GODARA & SHRI KRIWANT SAHAY

Hearing: 14.07.2026Pronounced: 24.07.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘H’: NEW DELHI BEFORE SH. SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI KRIWANT SAHAY, ACCOUNTANT MEMBER

ITA No.8107/Del/2025 [Assessment Year: --] Swarup Charitable Trust vs CIT (E) 2819-B, Guru Nanak Auto Delhi Market, Bara Bazar, Kashmere Gate Delhi -110006 PAN No.ABFTS2204J Appellant Respondent ITA No.8108/Del/2025 [Assessment Year: --] Swarup Charitable Trust vs CIT (E) 2819-B, Guru Nanak Auto Delhi Market, Bara Bazar, Kashmere Gate Delhi -110006 PAN No.ABFTS2204J Appellant Respondent

Appellant by Sh. K. Sampath, Advocate (Virtual) Respondent by Sh. Bhopal Singh, CIT DR Date of Hearing 14.07.2026 Date of Pronouncement 24.07.2026

ORDER PER KRINWANT SAHAY A.M. Appeals in this case have been filed by the assessee against the order dated 19.11.2025 passed by the CIT(E), Delhi. Grounds of appeals are as under :- (ITA No.8107/Del/2025)

“On the facts and in the circumstances of the case and in law the order of the learned Commissioner of Income Tax (Exemptions), Delhi arbitrarily rejecting the application for renewal of provisional registration under section 80G(5) of the Income Tax Act, 1961 is misconceived, fallacious and illegal which must be quashed with directions to grant the registration as sought.”

(ITA No.8108/Del/2025)

“On the facts and in the circumstances of the case and in law the order of the learned Commissioner of Income Tax (Exemptions), Delhi arbitrarily rejecting the application for renewal of provisional registration under section 12AB(1)(b) of the Income Tax Act, 1961 is misconceived, fallacious and illegal which must be quashed with directions to grant the registration as sought.” 2. During proceedings before us the Ld. Counsel for the assessee brought it to the notice of the Bench that the CIT(E) has denied registration u/s.12AB(1)(b)(ii)(B) of the IT Act giving his findings as under :-

“1. The applicant (Trust) was created in Nov 2022. Since then it has not undertaken any charitable activity. From the financials submitted it is seen that applicant is showing land & building under construction as assets. The applicant stated that same

are for one room set residential houses for the poor and destitute. However, it failed to show how these houses will be allotted to beneficiaries & how will they be charged. 00 2. Further as per one of its objects, the applicant tends to construct affordable tenements of one room set and to give them on lease to needy person. This objective is evidently commercial.”

3.

He further argued that since the registration u/s.12A alongwith 80 G exemption have been denied, therefore, the assessee is not in a position to get any contribution for the charitable purpose. He also brought it to the notice of the Bench that once building is complete and allocated to the needy persons only thereafter CIT(E) can question the charitable nature of work done by the assessee.

4.

But here in this case the Ld. CIT(E) has not waited for completion of the building to be allocated to the needy persons and he has rejected the registration u/s.12A and thereby denied the exemption u/s.80G of the Act.

5.

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

6.

We have considered the findings given by the Ld. CIT(E) in his order and the arguments made by Ld. Counsel for the assessee before us. We are of this considered view that once it has already been brought to the notice of the CIT(E) that after the completion of the construction of one room set provided to the needy people, the Ld. CIT(E) should have waited for completion of the construction and then Page | 3

verified the charitable work done by the trust. But here in this case exemption has been withdrawn and the registration has been cancelled even before construction of building which in our considered view is not justified, therefore, the action of the Ld. CIT(E) cannot be sustained. 7. In the result, the appeals filed by the assessee in both the ITA Nos.8107/Del/2025 and 8108/Del/2025 are allowed. Order pronounced in the court on 24.07.2026.

Sd/- Sd/- [SATBEER SINGH GODARA] [KRINWANT SAHAY] JUDICIAL MEMBER ACCOUNTANTMEMBER Dated: 24.07.2026 NEHA , Sr.P.S.* Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi

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