SHREYANS CHARITABLE FOUNDATION,AHMEDABAD vs. PCIT (CENTRAL), AHMEDABAD, AHMEDABAD

ITA 2287/AHD/2026Status: DisposedITAT Ahmedabad29 September 20265 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the order of the PCIT. The Tribunal noted that the Assessing Officer and Additional CIT had clearly held that interest on loans was camouflaged as donations. The Tribunal found that the assessee had not carried out any activities genuinely or in accordance with the conditions of registration, and had failed to prove its involvement in animal welfare activities, animal aid and rescue, or distribution of food and clothing to the economically weaker sections. The Tribunal concluded that the case fell within the ambit of a specified violation under clause (e) of the Explanation to Section 12AB(4) of the Act, based on the details of the 'specified violation'. Therefore, the Tribunal declined to interfere with the PCIT's order and dismissed the appeal. No issue was expressly left undecided.

What were the facts?

The assessee, Shreyans Charitable Foundation, a company incorporated under Section 8 of the Companies Act, 2013, with objects including animal welfare and social initiatives, was granted provisional registration under Section 12AB of the Income-tax Act, 1961, for Assessment Years 2022-23 to 2026-27. The assessee applied for regular registration in Form No. 10AB. The Principal Commissioner of Income-tax (PCIT), Ahmedabad, rejected the application and cancelled the provisional registration, invoking Section 12AB(4). The PCIT's decision was based on findings from a search and seizure operation in the Lokprakashan Ltd. group, which indicated that interest on loans amounting to Rs. 2,95,48,698/- in Financial Year 2024-25 was camouflaged as donations. The PCIT held this to be a non-genuine activity and a specified violation under Section 12AB(4). The assessee appealed this order.

What were the issues?

1. Whether the order passed by the PCIT rejecting the application for registration under Section 12A(1)(ac)(iii) and cancelling the provisional registration under Section 12AB(4)(a) is illegal, unlawful, and against the principles of natural justice, particularly concerning the opportunity of hearing and disclosure of relied-upon material? (Mixed law and fact, turns on Section 12AB(4) and principles of natural justice). Assessee's Contentions: The assessee argued that the PCIT erred in cancelling the provisional registration without granting a specific and sufficient opportunity of hearing, thus violating natural justice. They contended that the specific material relied upon to treat alleged donations as camouflaged interest was not provided, preventing an effective rebuttal. The assessee asserted it was carrying out genuine charitable activities and had not indulged in non-genuine activities or misrepresentation. They relied on audited accounts, statutory documents, expenditure details, and confirmations. Revenue's Contentions: The Revenue, through the CIT-DR, supported the impugned order, submitting that the material gathered during search proceedings and the Assessing Officer's report justified the PCIT's action.

Which sections of the Income-tax Act were involved?

Section 12AB,Section 12AB(4),Section 12AB(4)(a),Section 12A(1)(ac)(iv),Section 12A(1)(ac)(iii),Section 12AA,Section 80G(5)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD

Before: DR. B.R.R. KUMAR, VICE-SHRI RAHUL CHAUDHARY

For Appellant: Shri S. N. Divatia, AR
For Respondent: Shri Ram Tiwari, CIT-DR
Hearing: 22.07.2026Pronounced: 29.09.2026

PER DR. B.R.R. KUMAR, VICE-PRESIDENT:

-

This appeal has been preferred by the assessee against the order dated 30.03.2026 passed by the Ld. Principal Commissioner of Income-tax (Central), Ahmedabad [hereinafter referred to as the “Ld. PCIT”], under section 12AB of the Income-tax Act, 1961 (hereinafter referred to as the “the Act”), whereby the application filed by the assessee in Form No.10AB seeking registration under section 12A(1)(ac)(iv) of the Act was rejected and the provisional registration granted to the assessee was cancelled by invoking the provisions of section 12AB(4) of the Act.

2.

The Assessee has raised following grounds of appeal: - “1.1 The order pass

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 12AB

All 5,972 judgments and leading authorities on Section 12AB →

Recent GST High Court judgments

Search GST case law →