IILM FOUNDATION ACADEMY,GURGAON vs. DEPUTY COMMISSIONER OF INCOME TAX, FARIDABAD

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G”, NEW DELHI SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER AND BEFORE SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No. 8620/Del/2025, A.Y. 2026-27 IILM Foundation Academy Vs. Deputy Commissioner of Plot No. 69, village Income Tax, Wazirabad Exemptions Ward, Gurgaon Faridabad, Haryana, Faridabad �थायीलेखासं./जीआइआरसं./PAN/GIR No: AACCI0734J Appellant .. Respondent Appellant by : Sh. Gaurav Gupta, CA Respondent by : Shri Sher Singh, CIT(DR) Date of Hearing 30.06.2026 Date of Pronouncement 22.07.2026

O R D E R PER VIMAL KUMAR, JM: The appeal filed by the assessee is directed against the order dated 09.12.2025 of the Commissioner of Income Tax (Exemption), Chandigarh [hereinafter referred to as “the CIT(E)”] under section 12A(1)(ac)(ii) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for A.Y.2026-27.

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years and was, during the relevant period, in a preparatory and consolidation stage with a clear intention to undertake charitable and educational activities in future. 7. That the Learned CIT(E) erred in treating accumulation of funds and creation of fixed deposits as adverse factors, whereas accumulation of income is expressly permitted under section 11 of the Act and does not render the activities non-genuine. 8. The Learned CIT has objected to the claim of legal charges on the ground that the appellant has made payments to a legal firm. In this regard, the appellant respectfully submits that the said payments were made to the legal firm engaged for rendering professional services such as legal advice, drafting and vetting of documents, compliance-related matters, and representation, which were necessary and incidental to the functioning and administration of the appellant. The services were rendered in the normal course of activities, and the payments were made against duly raised invoices. 9. That the Learned CIT(E) travelled beyond the limited scope of section 12AB by making observations on alleged group structures, historical disputes and presumed motives, which are wholly irrelevant for deciding an application for registration. 10. That the impugned order is violative of the principles of natural justice, being based on suspicion and assumptions rather than objective evaluation of the Appellant's objects and activities. 11. That the Appellant craves leave to add to, amend or alter any of the above grounds at the time of hearing.”

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firm engaged for rendering professional services such as legal advice, drafting and vetting of documents, compliance-related matters, and representation, which were necessary and incidental to the functioning and administration of the appellant/assessee. The services were rendered in the normal course of activities, and the payments were made against duly raised invoices. 5. Ld. Departmental Representative relied on impugned order. 6. From examination of record in light of aforesaid rival contention, it is crystal clear that Ld. CIT(E) vide order dated 09.12.2025 had rejected application u/s 12AB for lack of activities and donations to the other institutions. The appellant/assessee claimed that the donations were for education purposes, the assessee had been running educational institution in earlier years and had been undertaking charitable activity’s claim of legal charges for professional services were also assailed. 7. A perusal of the record shows that Ld. CIT(E) by referring to the bank account statements creating fixed deposits out of its funds without actually doing any charitable activities. Over the years, frequent litigation among family members, allegations of systematic commercialization, seeking capitation fees and donation of fees and diversion of funds rejected the claim for grant of

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registration. In absence of any evidence to the contrary, the grounds of appeal, being devoid of merit, are untenable. 8. In the result, the appeal filed by the assessee is dismissed. Order pronounced in the open court on 22.07.2026

Sd/- Sd/- (RAMIT KOCHAR) (VIMAL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated:22.07.2026 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI