DAKSH PARJAPATI CHARITABLE TRUST,BHIWANI vs. COMMISSIONER OF INCOME TAX (EXEMPTIONS) CHANDIGARH, CHANDIGARH

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ITA 7974/DEL/2025Status: DisposedITAT Delhi27 May 2026AY 2025-264 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the assessee should be given one more opportunity to submit necessary documents and explain financial propriety. The matter was restored to the CIT(Exemptions) for a fresh decision.

What were the facts?

The assessee, Daksh Parjapati Charitable Trust, applied for registration under Section 12A(1)(ac)(vi) of the Income Tax Act. The CIT(Exemptions) rejected the application, citing insufficient documentation to substantiate activities and concerns about financial propriety, particularly regarding cash transactions and handmade bills.

What were the issues?

Whether the CIT(Exemptions) was justified in rejecting the registration application solely based on the provided documentation and financial propriety concerns, and whether the assessee deserves another opportunity to present their case.

Which sections of the Income-tax Act were involved?

Section 12A(1)(ac)(vi),Section 12AB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHIBENCH ‘E’, NEW DELHI

Before: Sh. Raj Kumar Chauhan & Smt. Renu Jauhri

Hearing: 25.05.2026Pronounced: 27.05.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHIBENCH ‘E’, NEW DELHI Before Sh. Raj Kumar Chauhan, Judicial Member & Smt. Renu Jauhri, Accountant Member ITA No. 7974/Del/2025 :Asstt. Year: 2025-26 Daksh Parjapati Charitable Trust, Vs CIT(Exemptions), House No. 155, Near Adarsh High Chandigarh-160017 School, Ward-11, Bawani Khera, Bhiwani, Haryana-127032 (APPELLANT) (RESPONDENT) PAN No. AAETD2991H Assessee by: Sh. Deepam Jain, Adv. Revenue by: None (Adjournment application) Date of Hearing: 25.05.2026 Date of Pronouncement: 27.05.2026 ORDER Per Raj Kumar Chauhan, Judicial Member: The appeal is directed against the order dated 11.09.2025 of ld. CIT(Exemptions), Chandigarh wherein the registration u/s 12A(1)(ac)(vi) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) has been rejected on the ground that the applicant could not substantiate through independent reliable documentation about the activities engaged and financial propriety has not been followed by the applicant.

2.

The applicant has applied u/s 12A(1)(ac)(vi)-ITEM(B) of the Act for registration and the ld. CIT(E) found that the documents provided by the applicant are not sufficient for assessing the genuineness of the activities of the applicant. It

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was further observed that it could not be verified from the available documents whether the applicant was complying with the objects mentioned in the memorandum of association or not.

3.

We have heard the ld. AR and the ld. DR. The ld. AR at the very outset submitted that the applicant may be given one more opportunity to submit the necessary document and to explain the financial propriety duly followed by the applicant and matter may be restored to the file of the ld. CIT(E). Adjournment was sought on behalf of the assessee on the ground that ld. CIT-DR was on leave. However, in view of the submissions made on behalf of the assessee, we have proceeded to adjudicate the matter in the interest of justice. We have considered the submission. The observation of the ld. CIT(E) while rejecting the registration application in Form 10AB are extracted from para 3.2 to 5 as under: “3.2 Since, the transactions of the applicant are in cash only and the bills and vouchers submitted by the applicant for expenses are either handmade or without GST number bills and vouchers, therefore it raises question mark on the genuineness of the expenses and financial propriety. Infact the applicant has made cash withdrawals from the bank. The donations also are entirely in cash. 4. On perusal of the expenses of the activities submitted by the applicant, it has been observed that the applicant failed to substantiate the genuineness of the expenses/activities. As per the scheme of the law, registration under section 12AB cannot be

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granted merely because some activity is being undertaken. The activities must be genuine, and more importantly, carried out in accordance with the stated objects of the society. 5 From the facts stated above, it is evident that the applicant is engaged in activities which are not substantiated through independent reliable documentation. The financial propriety is not being followed by the applicant. Therefore, the present application of the applicant filed in Form 10AB u/s 12A(1)(ac)(vi) item B of the Act is hereby rejected, which also supersede any registration granted u/s 12AB of the Act by any authority at any earlier time.” 4. It is thus evident that the registration u/s 12A of the Act has been declined by the ld. CIT(E) on the grounds that the applicant engaged in activity has not been substantiated through independent reliable documentation and financial propriety is not followed by the applicant. The ends of justice requires that assessee/applicant be given one more opportunity in order to do the substantial justice for filing all necessary documents and to explain the financial propriety duly followed in the matter before the ld. CIT(E). For these reasons, the matter is restored to the file of the ld. CIT(E) for deciding the application afresh after giving an effective opportunity of hearing and to decide the matter at the earliest.

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5.

In the result, the appeal of the assessee is allowed for statistical purposes. Order Pronounced in the Open Court on 27/05/2026. Sd/- Sd/- (Renu Jauhri) (Raj Kumar Chauhan) Accountant Member Judicial Member Dated: 27/05/2026 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR

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