YASHASWI ACADEMY FOR SKILLS,PUNE vs. PRINCIPAL COMMISSIONER OF INCOME TAX (EXEMPTION), PUNE

ITA 2814/PUN/2025Status: DisposedITAT Pune03 July 2026AY 2026-27187 pages
AI SummaryPartly Allowed

What were the facts?

The assessee, Yashaswi Academy for Skills (YAS), a non-profit organization registered under Section 8 of the Companies Act, 2013, was granted registration under Section 12AA of the Income Tax Act, 1961, on 21.06.2016, valid until 31.03.2021. Following the introduction of Section 12AB, it obtained renewed registration on 28.05.2021, valid from AY 2022-23 to AY 2026-27. The assessee consistently filed returns showing Nil income, claiming exemption under Sections 11 & 12, stating it was engaged in educational activities. A survey under Section 133A on 06.03.2024 revealed alleged non-genuine activities, diversion of funds for trustees' benefit, and non-charitable activities. The Principal Commissioner (Pr.CIT), Pune, initiated proceedings under Sections 12AA(3) & 12AA(4) and 12AB(4) to cancel the registration.

What did the Tribunal hold?

The Tribunal held that the activities of the assessee fall within the ambit of 'education' under Section 2(15) and are not hit by the proviso thereto. It noted that the assessee had incurred deficits in several years, indicating that activities were not profit-driven, aligning with the ratio in Ahmedabad Urban Development Authority. The Tribunal found that the assessee is engaged in skill development training, a flagship project of the Government of India, and distinguished the cases relied upon by the revenue. In Mahatma Gandhi Charitable Society, the assessee executed contracts for cleaning, which was not a public utility service. In Annadan Trust, the assessee was an implementing agency for government schemes funded by the state. The Tribunal concluded that the Pr.CIT was not justified in cancelling the registration. Consequently, the registration granted earlier was directed to be restored. The grounds raised by the assessee were partly allowed.

What were the issues?

1. Whether the activities carried out by the assessee are genuine and in accordance with its stated objects, as required under Section 12AA(3) and Section 12AB(4) of the Income Tax Act, 1961? 2. Whether the assessee has applied its income wholly and exclusively for the objects for which it was established, or has it been diverted for the benefit of its trustees and related persons, attracting provisions like Section 13(3) and impacting its charitable status under Section 2(15)? Assessee's Contentions: The assessee contended that it is a non-profit organization engaged in charitable activities within the scope of Section 2(15) and that no income was diverted for the benefit of trustees or settlers. It relied on the judgment of the Hon'ble Supreme Court in ACIT (Exemption) v. Ahmedabad Urban Development Authority [2022] 449 ITR 1 (SC). Revenue's Contentions: The revenue, through the Pr.CIT, argued that the activities were not genuine, funds were siphoned through sham transactions, income was applied for the benefit of trustees/related persons (citing personal expenses, salaries of employees working for other concerns, loans to directors, repairs of directors' buildings), income from hotels was business income not incidental to objectives, cash withdrawals were suspicious, and activities were not charitable as defined under Section 2(15). The revenue relied on decisions in Mahatma Gandhi Charitable Society (415 ITR 27 Kerala) and Annadan Trust (96 taxmann.com 207 Kerala).

Which sections of the Income-tax Act were involved?

Section 12AA(3),Section 12AA(4),Section 12AB(4),Section 12A(1)(ac)(i),Section 12AB,Section 11,Section 12,Section 13(3),Section 2(15),Section 133A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE

Before: SHRI R. K. PANDA & SHRI VINAY BHAMORE

For Appellant: Shri Nikhil S Pathak
For Respondent: Shri Amit Bobde, CIT

PER R.K. PANDA, VP:

This appeal filed by the assessee is directed against the order dated 29.09.2025 passed by the Ld. Pr. CIT-(Central), Pune u/s 12AA(3) & 12AA(4) and 12AB(4) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).

2.

Facts of the case, in brief, are that the assessee Yashaswi Academy for Skills (in short “YAS’) was incorporated as a ‘Non-profit organization’ u/s 8 of the Companies Act, 2013 on 20.03.2014. The main object of YAS as per the Memorandum of Association (MOA) is to promote, execute and implement skill development. The relevant part of the MOA which has been reproduced by the Ld.

PCIT(C) read as under:

“1. To promote, in

The order continues below.

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