KEWALAM CHARITABLE TRUST,DELHI vs. CIT EXEMPTION, DELHI

in issuing show cause notices to the Appellant repeatedly without giving details/valid reasons thereof and without appreciating well settled principles of law that giving show cause is not an empty formality and is not valid in law unless full facts and provisions of law is communicated to noticee to enable him to make effective representation, rebuttal or needful compliance of the same.

in holding that trust deed of the Appellant does not have any clause specifying manner of dissolution of the Trust and application or disposal of its assets upon such dissolution without:

in holding, unsupported by any provision of law which requires, that in absence of a dissolution clause , it cannot be ensured that assets of trust shall continue to be utilized for charitable purposes upon its winding up failing to appreciate that Appellant trust was a perpetual and irrevocable Trust and hence there is no provision in law for its winding up.

in observing that dissolution clause in the Trust Deed is a mandatory requirement as per CBDT guidelines for registration in the Act u/s 12A failing to appreciate that CBDT has no power in law to make any such guideline and in case there is any such guideline, it cannot be treated as law unless the Act is amended by parliament.

in not appreciating that Doctrine of Cy-Pres and Section 92 of CPC cannot be applied in case of the Appellant in the present context as so stated by Ld. CIT(E) more so when Appellant is an irrevocable perpetual Trust which by itself ensures that property once dedicated to charity remains charitable in perpetuity as so held by numerous judgments of Hon'ble Apex Court but none of them including the one relied by Ld. CIT(E) make it a precondition for registration u/s 12A.

in not appreciating that ratio of judgment relied in impugned order in case of Intellectuals Forum, Tirupathi v. State Of A.P & Ors. (AIR. 2006 SC 1350) are altogether on different fact and are not applicable to the facts of Appellant case.

That lack of such clause, (as is stated in impugned order), is in violation of the laws and doctrines; or

That since one has to be satisfied that trust has complied to such requirements of any other law for time being in force as are material for the purpose of achieving its objects, it is desirable (not mandatory) that such clause exists in the deed and it is also an indicator of the charitable intent and genuineness of its purpose, or

That as per procedure for registration from 01.04.2021, various sub clauses u/s.l2A(l)(ac) are introduced describing different scenarios under which an institution can apply to seek registration u/s,12A, as per procedure described in section 12AB of the Act; or

assessee has failed to file details/explanation required by notices referred above, in support of genuineness of the activities, charitable objects, commencement of activities; and

It is noted that the Ld. CIT(E) rejected the application of the applicant for non-filings of relevant details / explanation by passing the order u/s. 12AB(1)(b)(ii)B of the Income Tax Act, 1961. 4. The Ld. DR has submitted that the Ld. AR has failed to provide the relevant details/explanation before the Ld. CIT(E), the application was rightly rejected. 5. We have heard the Ld. DR and perused the material available on record. It is noted that Assessee/Applicant has filed the application on 25.8.2025 in From 10AB for registration u/s. 12A(1)(ac)(iii) of the Income Tax Act, 1961. Ld. CIT(E) noted that since the assessee has failed to file details/explanation required by the notices, in support of genuineness of the activities, charitable objects, commencement of the activities and has also failed to comply the basic conditions prescribed for registration u/s. 12AB of the Act, as a result thereof, Ld. CIT(E) rejected the application filed in Form 10AB for grant of registration u/s. 12A(1)(ac)(iii) and the provisional registration u/s. 12A granted vide order dated 3.8.2022 issued for the period from AY 2023- 24 to AY 2025-26 was also cancelled. Therefore, considering the totality of the facts and circumstances of the case and in the interest of justice, we deem it proper to restore the issues to the file of the Ld. CIT(E) with a direction to grant one final opportunity to the assessee to substantiate its claim and decide the issues as per fact and law, afresh. The assessee is also