BALRAJ GUPTA FOUNDATION,HARYANA vs. CIT EXEMPTIONS CHANDIGARH, CHANDIGARH

From case records, it emerges that the assessee was registered u/s 12A as a charitable entity on 12.12.2019. In the new regime, registration u/s 12A(1)(ac)(i) was granted by CPC on 06.04.2022 for AYs 2022-23 to 2026-27. During examination of condonation of delay petition in filing form 10B for AY 2021-22, Ld. CIT(E) noted specified violations u/s 12AB(4)(i) and show-caused the assessee. All these discrepancies were stated in the show cause notice dated 11.07.2025. The primary objection was that the assessee had filed multiple returns for AY 2021-22 which was stated by the assessee to have happened due to error committed by the earlier consultant of the assessee. The Ld. CIT(E) noted that these discrepancies were not minor clerical errors but involved substantial alteration in the characterization of income and application including shifting positions between accumulation u/s 11(2), donations applied for charitable purpose and classification of income sources. The same could not be held to be inadvertent mistake. It was also alleged that the assessee trust fabricated its books of accounts. No effective expenditure was incurred towards charitable programs. It was finally alleged that the activities of the trusts were not genuine and not been carried out in accordance with the objects of the trust. The trust was making fraudulent claims to suit its purpose in return of income. The foundation was merely acting as conduit which amounts to blatant use of charitable status. All these facts constitute specified violations u/s explanation (e) to u/s 12AB(4). On these facts, the registration as granted by CPC on 06.04.2022 was cancelled. Aggrieved, the assessee is in further appeal before us.

The Ld. AR appeared virtually with a prayer to remand back the matter on the ground that no effective opportunity was granted to the assessee before forming such an opinion. The Ld. AR also pleaded that the assessee is a trust and it is in a position to explain the correct facts leading to revision of return of income and other issues as raised in the impugned order. The same has been opposed by Ld. CIT-DR. 4. Keeping in mind the principles of natural justice and in view of the fact that the assessee is a charitable-trust, we deem it fit to accept the prayer of Ld. AR. Accordingly, the impugned order is set aside and the matter is restored back to the file of Ld. CIT(E) for de novo adjudication with a direction to the assessee to substantiate its case and meet out the allegations of Ld. CIT(E). The appeal stand allowed for statistical purpose. 5. It has been stated that the other two appeals are merely consequential in nature wherein the assessee is assailing rejection of regular registration u/s 12A as well as approval application u/s 80(G)(5)(ii). The same being merely consequential in nature, are similarly set aside to CIT(E) on similar lines. All the for appeals stand allowed for statistical purpose. 6. Order pronounced on 05th August, 2026