GEE DEE EDUCATIONAL SOCIETY,NEW DELHI vs. DCIT, CENTRAL CIRCLE-2, NEW DELHI, DELHI

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ITA 3124/DEL/2026Status: DisposedITAT Delhi15 July 2026AY 2026-2711 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 PCIT erred in retrospectively cancelling the registration based on provisions that were not applicable during the relevant assessment years. It also found that the PCIT's action was based on survey findings without independent inquiry and lacked proper procedural adherence.

What were the facts?

The assessee, an educational society, had its application for renewal of registration under Section 12A(1)(ac)(ii) rejected by the PCIT. The rejection was based on alleged "specified violations" found during a survey, including purported cash payments and issues with transport facility income.

What were the issues?

Whether the PCIT had the jurisdiction to cancel registration retrospectively based on new provisions and whether survey findings alone are sufficient for cancellation without independent inquiry.

Which sections of the Income-tax Act were involved?

Section 12AB(4),Section 12A(1)(ac)(ii),Section 119,Section 131

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

For Appellant: Ms. Ragini Handa, CA, Ms. Pallavi Gupta, Advocate
Hearing: 08.07.2026Pronounced: 15.07.2026

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.3124/Del/2026 [Assessment Year: 2026-27] GEE DEE Educational vs DCIT Society, B-16, Lawaran Central Circle-2 Road, Industrial Area, New Delhi Main Bazar, Mehrauli, New Delhi PAN No.AAATG5957G Appellant Respondent Appellant by Ms. Ragini Handa, CA Sh. Kartik Soni, Advocate Ms. Pallavi Gupta, Advocate Respondent by Sh. Bhopal Singh, CIT DR Date of Hearing 08.07.2026 Date of Pronouncement 15.07.2026 ORDER PER KRINWANT SAHAY A.M. Appeal in this case has been filed by the assessee against the order dated 17.03.2026 passed by the PCIT (Central)-1, Delhi for the A.Y. 2026-27. Grounds of appeal are as under :- 1. That the impugned order dated 17.03.2026 passed by the Respondent u/s 12AB(4) of the Income-tax Act, 1961 ("the Act"), rejecting application for renewal of registration u/s 12A(1)(ac) (ii) of the Act ("impugned

application"), is illegal, arbitrary, contrary to facts and law, and liable to be quashed. 2. That on facts and in law, Respondent failed to appreciate that the powers qua cancellation of registration u/s, 12AB of the Act vests exclusively with the PCIT (Exemption)/CIT(Exemption) vide CBDT Notification No. 52/2014 dated 22.10.2014 r.w.s. 120 and exercise of such powers by the Respondent is without jurisdiction and contrary to Section 119 of the Act. 3. That the Respondent grossly erred in law and on facts in retrospectively cancelling registration of the Appellant for AY 2019-20 to AY 2022-23 u/s. 12AB(4) of the Act for alleged incurrence of "specified violations" as per Explanation (a) and (e), when such provisions were introduced vide Finance Act, 2022 and apply prospectively w.e.f. 01.04.2022 (viz., AY 2023-24 onwards). 3.1. That the Respondent grossly erred in law and on facts in alleging purported cash payments of Rs. 1,27,68,515/- made during AY 2019-20, premised on loose sheets/uncorroborated Whatsapp chats of Sh. Puneet Gupta impounded during survey, sans independent inquiry, cross-examination or verification of actual payment. 4. That the Respondent erred in law and on facts in retrospectively cancelling registration for AY 2023-24 and AY 2024-25 u/s 12AB(4) of Act, solely on the borrowed satisfaction of survey findings without any independent inquiry qua occurrence of specified violation by the Appellant, rendering the impugned action legally unsustainable. 5. That the Respondent erred in law and on facts in retrospectively cancelling registration for AY 2025-26 and AY 2026-27 u/s 12AB(4) of Act in the absence of any "specified violation" occurred by the Appellant, being contrary to the mandatory procedure prescribed u/s 12AB(4)(a) of the Act. 6. That the Respondent failed to appreciate that survey findings lack determinative/ adjudicatory value in the absence of final assessment order examining and conclusively adjudicating the issues arising therefrom.

7.

That the Respondent grossly erred in law in cancelling registration for AY 2026-27 to AY 2030-31 incorrectly under Section 12AB(4) of the Act, as against applicable provisions of Section 12AB(1)(b)(ii)(B) of the Act specifically governing approval/ rejection of registration u/s 12A(1)(ac)(ii) of the Act, thereby rendering the impugned action legally unsustainable. 8. That the Respondent grossly erred in law and on facts in not issuing show cause notice qua alleged specified violation of non-maintenance of separate books of account for transport facilities of Explanation (b) to Section 12AB(4) of the Act, depriving the Appellant an opportunity of being heard and in violation of principles of natural justice hence, rendering the impugned action legally unsustainable. 9. That the Respondent grossly erred in rejecting the impugned application for alleged specified violation under Explanation (a) to Section 12AB(4) of the Act sans any cogent material or satisfaction/reasons that income was applied for other than charitable objects of the Appellant. 10. That the Respondent also failed to appreciate the settled position in law that, survey statements recorded u/s. 131 of the Act does not carry conclusive evidentiary value and cannot be relied sans independent corroboration and examination. 11. That the Respondent erred in law in travelling beyond the permissible scope of enquiry at the approval stage, by rejecting registration u/s. 12AB of the Act, on account of purported bogus expenses of Rs. 21,17,42,259/- and receipts from alleged business activity of transport facility amounting to Rs. 3,12,20,088/-, being a subject matter of subsequent assessment. 12. That the Respondent grossly erred in law in expanding and not restricting the scope of inquiry at the time of granting registration u/s 12AB of the Act qua limited to the examination of (i) charitable objects and (ii) genuineness of activities of the Appellant society.

2.

During proceedings before us the Ld. Counsel for the assessee filed a brief submission that contains brief fats of the case as well as main arguments taken by the assessee in the appeal. It is reproduced as under :-

“1. The Appellant is an educational society registered under Section 12A and Section 80G of the Income-tax Act, 1961 ("the Act"), and is engaged in charitable activities within the meaning of Section 2(15) of the Act. The Appellant runs a school under the name K.R. Mangalam World School (Sen. Sec. School) situated at S Block, Greater Kailash - 11, New Delhi, imparting quality education to all sections of the society. 2. The Appellant is registered under the Registrar of Societies under the Societies Registration Act 1860 since 19.12.2001. A certified copy of the Registration Certificate dated 19.12.2001 along with the Memorandum of Association and the Rules & Regulations (By-Laws) of the Society is enclosed at page 28 and 29 to 38 of PBK. A Certified copy of the registration approval order dated 2.10.2021 for AY 2022-23 to AY 2026-27 passed u/s 12A (1) (ac) (i) is enclosed at page 39-41 of PBK and passed under Section 80G (5) of the Act is at page 46-47 of 80G PBK. 3. Pursuant to a survey conducted on 13.01.2025, an order u/s 127(2) dated 27.05.2025 was passed by the Commissioner of Income-tax (Exemptions) ("CIT(E)"), Delhi transferring assessment jurisdiction from ACIT(E)Circle-(1)(1), Delhi to DCIT/ACIT, Central Circle- 02, New Delhi. The order was passed for administrative convenience, coordinated investigation and meaningful assessment-Refer Annexure 1 4. The Appellant filed an application in Form 10AB dated 28.09.2025 seeking renewal of registration for a further period of 5 years (from AY 2027-28 onwards), in accordance with Section 12A read with Section 12AB of the Act (refer page 1251 to 1261 of PBK). 5. Pursuant thereto, the Ld. PCIT(Central), Delhi-1 issued a notice dated 7.01.2026 u/s 12A(1)(ac) (ii) of the Act (refer page 1248 to 1250 of PBK) calling for Page | 4

information. The Appellant duly furnished all requisite details vide reply dated 24.01.2026 (refer page 21 to 1246 of PBK). 6. Thereafter, a show cause notice dated 27.02.2026 was issued under Section 12A(1)(ac) (ii) of the Act (refer page 9 to 10 and page 19-20 of PBK), proposing rejection of the application under clauses (a) and (e) of clause 4 of Section 12AB. The Appellant submitted detailed response vide letters dated 09.03.2026 (refer page 1 to 8 and page 11-18 of PBK). 7. However, the Ld. PCIT(Central), Delhi-1 vide order dated 17.03.2026 cancelled the registration from AY 2019-20 to AY 2030-31 on the following grounds (page 17 to 21 of order): (1) Advances to certain suppliers/contractors were treated as bogus expenditure and diversion of charitable funds, based on survey/post-survey proceedings u/s 133A, amounting to specified violations under clauses (a) and (e) of Section 12AB; (ii) transportation receipts were treated as incidental business income without separate books of account, constituting a specified violation under clause (b) of Section 12AB Submissions: 1. GROUND NO. 1.2: THE LD. PCIT (CENTRAL) DELHI- 1 HAD NO JURISDICTION TO CANCEL THE APPELLANT'S REGISTRATION U/S 12AB OF THE ACT: 1. The jurisdiction to grant or cancel registration u/s 12AB of the Act vests exclusively with the CIT(Exemptions) by virtue of CBDT Notification Nos. 52/2014 F. No. 187/38/2014 and 53/2014 F. No. 187/35/2014, both dated 22.10.2014, read with section 120 of the Act. 2. Section 120 of the Act mandates that income-tax authorities shall exercise such powers and perform such functions as are assigned by the CBDT. In exercise of said statutory power, the CBDT issued Notifications No. 52/2014 and 53/2014 dated 22.10.2014, whereby the CBDT specifically conferred exclusive jurisdiction in matters relating to grant and cancellation of registration under sections 12AA/12AB upon the CIT (Exemptions).

3.

The aforesaid notifications do not authorize the CIT(E) to transfer or delegate such jurisdiction to any other CIT or PL. CIT. On the contrary, they only authorise the CIT (Exemptions) to assign specified functions to officers who are subordinate to him, namely the Addl. CIT, JCIT and TRO, and the Addl. CIT may further assign functions to subordinate Assessing Officers. Sections 120(4) to 120(6) of the Act also contemplate assignment only amongst subordinate authorities. 4. Accordingly, the power to grant or cancel registration under sections 12AA/12AB is a subject-matter jurisdiction specifically vested in the CIT (Exemptions). In the absence of any statutory provision or CBDT notification conferring such power upon the learned PCIT (Central), the impugned order is wholly without jurisdiction and liable to be quashed. 5. In view of Notifications No. 52/2014 and 53/2014, jurisdiction remains vested with the CIT (Exemptions). It is a settled principle that CBDT Instructions and notifications are binding on the Department [K.P. Varghese v. ITO (131 ITR 597) (SC). 6. NO CONFLICT BETWEEN NOTIFICATION NO. 70/2014 AND NOTIFICATIONS NO. 52/2014 & 53/2014: i.Notification No. 70/2014 neither supersedes nor overrides CBDT Notifications Nos. 52/2014 and 53/2014. Its supersession clause is confined to Notification No. S.O. 822(E) dated 23.08.2001. "in supersession of the notification of the Government of India, Central Board of Direct Taxes number S.0.822(E), dated the 23rd August, 2001 published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (ii), dated the 23rd August, 2001, except as respects thingsdone or omitted to be done before such supersession, the Central Board of Direct Taxes hereby,-" ii. The two sets of notifications operate in distinct fields. Notification No. 70/2014 deals with assignment of cases pursuant to transfers under section 127 Notifications Nos. 52/2014 and 53/2014 specifically

govern subject-matter jurisdiction relating to grant and cancellation of registration of charitable institutions. iii. Therefore, even where a case is transferred under section 127, such transfer pertains only to assessment jurisdiction and does not divest the CIT (Exemptions) of its exclusive statutory jurisdiction in matters relating to grant or cancellation of registration. iv.Accordingly, there is no express or implied repeal of Notifications No. 52/2014 and 53/2014, which continue to operate in full force. v.in any event, a specific notification (52/2014) prevails over a general notification (70/2014). SCOPE OF SECTION 127-LIMITED TO ASSESSMENT 7. Section 127 forms part of Chapter XIII dealing with assessment machinery and authorises only transfer of assessment jurisdiction between Assessing Officers. As per section 2(7A), the term "Assessing Officer does not include Pr. CIT/CIT acting in their statutory capacity under sections 12AA/12AB. It neither confers nor contemplates transfer of statutory powers vested in the CIT (Exemptions) under sections 12A, 12AA or 12AB- Vidya Pracharni Sabha vs PCIT (Central) in ITA No. 1308/Del/2023- para 4, 8-13.1, 14, 15.1, 20, Richmond Educational Society ITA No. 4779/Del/2025-para 15, Lakhmi Chand Charitable Society V. PCIT-Central 3 (ITA No. 1803/Del/2024- para 16, Hemkunt Foundations [2025] 175 taxmann.com 918 (Delhi -Trib.)-para 9 and 12 8. The expression "case" in section 127 refers to assessment proceedings and matters incidental thereto, and cannot be interpreted to include independent statutory functions such as cancellation of registration. 9. The transfer order dated 27.05.2025 under Section 127 of the Act was passed only for administrative convenience, coordinated investigation and meaningful assessment. The order was passed by the CIT (Exemptions), Delhi transferring assessment jurisdiction from ACIT(E)Circle-(1)(1), Delhi to DCIT/ACIT, Central Circle-02, New Delhi. There is no mention therein of transfer of powers under section 12AB.

10.

Consequently, the learned PCIT (Central) assumed a jurisdiction never transferred to him and acted beyond the scope of the section 127 order.

3.

The Ld. Counsel for the assessee has also submitted the case law set in which various case laws pronounced by the coordinate Benches of ITAT have been cited.

4.

Per contra the Ld. DR relied on the order of the Ld. PCIT(Central)-1, Delhi.

5.

We have considered the findings given by the Ld. PCIT, Central in his order and we have also considered the arguments made by the Ld. DR during proceedings before us.

6.

We have seen the submissions filed by the Ld. Counsel for the assessee and we have also considered the arguments made during proceedings before us. We find that the Ld. PCIT(Central), Delhi-1 has denied/ cancelled the registration u/s.12AB(1)(b)(ii) of the Act to the trust with retrospective effect on the ground that during the survey conducted on 13.01.2025 some material came to the notice of the survey team that the assessee trust was not maintaining books of account for any incidental business activity which is specified violation as referred to in clause- B and on the basis of that finding, the Ld. PCIT (Central)-1, Delhi has cancelled the registration of the trust granted u/s.12AB(1)(b)(ii) of the Act with retrospective effect. We Page | 8

have gone through various case laws on this issue and we find that the various coordinate Benches of ITAT have given categorical finding on this issue wherein it has been held that the PCIT(Central)-1, Delhi does not have the power to cancel the registration u/s.12A/12AB of the Act. The coordinate Bench of ITAT Chandigarh in the case of Chandigarh Education Society vs. DCIT/ACIT reported in [2026] 185 taxmnan.com 782(Chandigarh-Trib.) has categorically held as under :-

“Section 12A, read with section 120, of the Income-tax Act, 1961/Section 332, read with section 241 of the Income-tax Act, 2025- Charitable or religious trust-Registration of (Jurisdiction) -Assessees having been granted registration under new registration scheme, filed applications under section 12A(1)(ac)(II) before CIT (Exemptions), Chandigarh for fresh registration upon transfer, PCIT (Central), Gurgaon reject adjudicate applications under section rejected both applications-Assessees contended that PCIT (Central), Gurgaon had no jurisdiction to upon expiry of earlier term - Upon under section 12A(1)(ac)(ii), and such jurisdiction vested with CIT (Exemptions), Chandigarh- Whether Impugned order passed by PCIT (Central), Gurgaon was not sustainable for want of jurisdiction under CBDT Notification No. 52/2014-Held, yes-Whether accordingly, orders rejecting renewal applications were liable to be quashed-Held, yes [Para 19] [In favour of assessee)” 7. Apart from this citation the Ld. Counsel for the assessee has also submitted different case laws on this issue which is reproduced as under :-

1.

Hon’ble Rajasthan High Court in the case of Indian Medical Trust vs. PCIT (2019) 414 ITR 296 (Raj.) 2. Auro Lab. Vs. ITO (2019) 411 ITR 308 (Mad) 3. Oxford Academy for Career Development vs. Commissioner of Income Tax (2009) 315 ITR 382 4. Little Pearl Charitable Society vs. PCIT (Central)-3, Delhi[2026] 183 taxmnan.com 688 (Delhi) 546 (Delhi- Trib.) 5. Ram Saran Das Kishori Lal Charitable Trust Vs. CIT (Exemption) [2025] 180 taxmnan.com 546 (Delhi- Trib.) 6. Human Welfare Foundation v. DCIT (Exemptions) [2025] 174 taxmnan.com 650 (Delhi-Trib.) 7. Richmond Educational Society ITA No.4779/Del/2025 – para 14 8. Hemkunt Foundations [2025]175 taxmann.com 918 (Delhi-Trib.) 9. Lala Sher singh Memorial Jeevan Vigyan Trust Society vs. PCIT (Central)-3,[2025] 175 taxmann.com 671 (Delhi-Trib.) 10. Arya Smaj Model Town [2025] 176 taxmnan.com 47 (Delhi-Trib.)

8.

Having considered all these case laws on the issue we are of this considered opinion that the Ld. PCIT(Central)-1, Delhi has exceeded his jurisdiction and cancelled / denied the registration of the trust u/s.12A/12AB of the Act. Accordingly, his action cannot be sustained.

9.

In the result, order passed by the Ld. PCIT (Central)- 1, Delhi on this issue is quashed and the assessee’s appeal is allowed.

Order pronounced in the court on 15.07.2026.

Sd/- Sd/-

[SATBEER SINGH GODARA] [KRINWANT SAHAY] JUDICIAL MEMBER ACCOUNTANTMEMBER Dated: 15.07.2026 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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