JAI SANTOSHI MAA EDUCATIONAL AND CHARITABLE TRUST,GURGAON vs. INCOME TAX OFFICER (EXEMPTIONS), FARIDABAD

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ITA 910/DEL/2026Status: DisposedITAT Delhi09 June 2026AY 2026-272 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the order of the learned CIT(Exemptions) was to be set aside and the matter remanded for fresh adjudication. The Tribunal observed that it was not clear from the CIT(Exemptions)'s order what activities were carried on during assessment years 2022-23, 2023-24, and 2024-25. The CIT(Exemptions) herself admitted that the assessee had not filed documentary evidence of engagement in educational activities during subsequent years. Therefore, to allow the assessee one more opportunity to file details for examination by the CIT(Exemptions) to reach a conclusion on whether the assessee is engaged in activities as per its memorandum of association, the matter was restored to the CIT(Exemptions)'s file. The CIT(Exemptions) was directed to examine the details and record a finding on this fact. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Ms Jai Santoshi Maa Educational and Charitable Trust, filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging the order of the CIT(Exemptions), Chandigarh. The CIT(Exemptions) had rejected the assessee's application in Form 10AB for registration under Section 12A of the Income-tax Act, 1961, for the assessment year 2026-27. The CIT(Exemptions) noted that the assessee had not provided supporting evidence for its educational activities and had earned only bank interest and rental income from a property allotted for running a nursery school. The assessee admitted to running a school until financial year 2021-22 and thereafter letting out the property for a monthly rent of ₹80,000, with a security deposit of ₹50 lakhs, which was considered commercial exploitation. The CIT(Exemptions) denied registration under Section 12A(1)(ac)(ii) of the Act.

What were the issues?

1. Whether the learned CIT(Exemptions) was justified in rejecting the assessee's application for registration under Section 12A(1)(ac)(ii) of the Income-tax Act, 1961, on the grounds of commercial exploitation of the property and lack of evidence of educational activities? (Question of law and fact, turning on Section 12A(1)(ac)(ii)). Assessee's contentions: No arguments were recorded for the assessee as nobody appeared on their behalf. Revenue's contentions: The revenue, through the CIT-DR, implicitly supported the order of the CIT(Exemptions) by not arguing against it. The CIT(Exemptions) noted that the assessee had not filed supporting evidence for its educational activities and had let out the property, indicating commercial exploitation, thus justifying the denial of registration.

Which sections of the Income-tax Act were involved?

Section 12A,Section 12A(1)(ac)(ii)

AI-generated summary — verify with the full judgment below

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH-F NEW DELHI BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER ITA No.91O/Del/2o26 Assessment Year 2026-27 Ms Jai Santoshi Maa Educational and Charitable Trust, Site No.1, Near Plot No.975N School, Sector-40_ Gurgaon 132 001- PAN AABTJ2469H: (Appellant) Vs. Income Tax Officer (Exemptions) , Faridabad: (Respondent) Appellant by Respondent by None_ Shri Sharvan Kumar; CIT-DR Date of hearing Date of pronouncement 03.06.2026 03.06.2026 ORDER Per Mahavir Singh_Vice President:

This appeal by the assessee is directed against the order of learned CIT(Exemptions) , Chandigarh dated 8th December, 2025 whereby the application of the assessee in Form 1OAB under Section 12A of the Income-tax Act, 1961 (hereinafter referred to as the Act' ) was rejected. 2 . Nobody appeared on behalf of the assessee at the time of hearing: It is observed from the order of learned CIT(Exemptions) that the assessee has not filed supporting evidences in support of its claim to be engaged in educational activities and even the assessee for the year ending 31st March, 2025 has earned only bank interest and rental income on account of exploitation of this property i.e. school plot allotted to the assessee during financial year 1996-97 for the purpose of running of nursery school: Learned CIT(Exemptions) noted that the assessee admitted in its response that it was running a school up to 2 ITA No90Del2026 financial year 2021-22 and thereafter , has let out the property at monthly rent of <80,000/- whereas security deposit of <50 lakhs has been taken which establishes the fact that the assessee is exploiting the property commercially. Hence, he denied registration of the trust under Section 12A(1)(ac)(ii) of the Act. We noted that it is not coming out of the order of learned CIT(Exemptions) that what was the activity carried on during assessment year 2022-23, 2023-24 and 2024-25 and learned CIT(Exemptions) herself admitted that assessee has not filed any documentary evidence that it is engaged in educational activity during the subsequent years as well: Hence, for allowing one more opportunity to the assessee to file the details SO that learned CIT(Exemptions) can examine and then reach to a conclusion that assessee is engaged or not in the activities as mentioned in the memorandum of association, the matter is restored to his file_ Learned CIT(Exemptions) will examine the details and record a finding qua this fact Hence, the order of learned CIT(Exemptions) is set aside and matter remanded to him for fresh adjudication: 3 In the result, the appeal of the assessee is allowed for statistical purposes. Decision pronounced in the open Court on conclusion of hearing on 3r June, 2026. (SANJAY AWASTHI) ACCOUNTANT MEMBER (MAHAVIR SINGH) VICE PRESIDENT Date 09.06.2026 VK

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