SHREE SIDDHIVINAYAK EDU. TRUST,HARYANA vs. CIT (EXEMPTIONS), CHANDIGARH, CHANDIGARH

In the present appeal Assessee has raised the following grounds:

Brief facts of the case are that the assessee trust was established on 04.01.2007 and is engaged in the field of education, running two schools in the State of Haryana. The assessee was originally granted registration under section 12A on 04.12.2008 and the same stood renewed from time to time, lastly up to Assessment Year 2026-27. The assessee thereafter filed an application for renewal of registration on 29.09.2025. 2

1 During the course of proceedings, the Ld. CIT(E) issued notice dated 28.01.2026 calling for details of charitable activities, financial statements and clarification regarding certain clauses of the trust deed, particularly with regard to appointment of trustees. The assessee filed a detailed reply along with documentary evidences including CBSE affiliation certificates, audited financial statements and other supporting documents.

2 However, the Ld. CIT(E) rejected the application primarily on two grounds, namely (i) concentration of management in the hands of family members and powers of trustees to appoint successors, and (ii) non- submission of original trust deed dated 04.01.2007. 3.3 The Ld. AR reiterated the submissions as placed on record and submitted that the findings of the Ld. CIT(E) are factually and legally unsustainable. It was submitted that since inception, the trust has been engaged in charitable activities in the field of education and there has been no change either in the nature of activities or in the composition of trustees. It was further submitted that no family member has ever been inducted as trustee or employee and the institutions run by the trust are governed by independent managing committees.

4 It was further contended that the Ld. CIT(E) has erred in drawing adverse inference merely on the basis of a clause permitting appointment of family members in certain contingencies, ignoring the factual position that such clause has never been invoked in the past and no benefit has been derived by any trustee or related person. It was emphasized that the income of the trust is solely applied towards its charitable objects and no violation of section 13 has been alleged.

Against the order of the Ld. CIT(E), the assessee preferred an appeal before the Tribunal.

The Ld. AR placed strong reliance on CBDT Circular No. 14/2015 dated 17.08.2015, wherein it has been clarified that the mere fact that trustees have 3 powers to appoint successors or that control vests with family members would not, by itself, be a ground to deny exemption, unless the activities cease to be charitable or are carried out for profit. It was further submitted that the said principle equally applies to grant of registration under section 12AB.

1 Reliance was also placed on judicial precedents including the decision of ITAT Chandigarh in the case of Ace Vision Educational & Charitable Trust and ITAT Delhi in the case of Sahid Munshi Ram Memorial Educational Society, wherein it has been held that registration cannot be denied merely on account of concentration of management in a family, in absence of any adverse finding regarding genuineness of activities.

2 With regard to the second ground relating to non-submission of the original trust deed, it was submitted that the original trust deed dated 04.01.2007 was already part of the departmental record since grant of registration in 2008 and the amended deed had been furnished. It was further submitted that there was a misunderstanding regarding the requirement of producing the original deed and that the same was neither specifically called for nor was adequate opportunity granted, thereby resulting in violation of principles of natural justice.

The Ld. Departmental Representative relied upon the order of the Ld. CIT(E).

We have heard the rival submissions and perused the material available on record. The rejection of registration by the Ld. CIT(E) is primarily based on (i) alleged family control over the trust and (ii) non-submission of the original trust deed.

1 Insofar as the issue relating to control of the trust by family members is concerned, we find merit in the contention of the assessee that mere concentration of management in a family cannot be a determinative factor for denial of registration, unless it is demonstrated that the activities of the trust are not genuine or are not in accordance with its charitable objects. The 4 CBDT Circular dated 17.08.2015 clearly lays down that such factors, by themselves, are not sufficient to deny exemption.

2 We further note that the Ld. CIT(E) has not examined the issue in the light of the aforesaid binding circular and has also not recorded any categorical finding that the activities of the assessee are not genuine or are not charitable in nature.

3

4 In our considered view, both the issues require fresh examination at the end of the Ld. CIT(E) after considering the submissions of the assessee, the documentary evidences and the binding CBDT circular.

5 Accordingly, in the interest of justice, we set aside the impugned order and restore the matter to the file of the Ld. CIT(Exemptions) with the following directions:

6 The assessee is also directed to furnish all requisite documents and cooperate in the fresh proceedings.

In the result, the appeal of the assessee is allowed for statistical purposes.

""थ"/ The Respondent 3. आयकर आयु"/ CIT 4. आयकर आयु" (अपील)/ The CIT(A) 5. िवभागीय "ितिनिध, आयकर अपीलीय आिधकरण, च"ीगढ़/ DR, ITAT, CHANDIGARH 6. गाड" फाईल/ Guard File