LALA SOHANA MAL JAGMOHAN LAL KHANNA EDUCATIONAL AND CHARITABLE TRUST,FARIDABAD vs. CIT EXEMPTIONS, CHANDIGARH

ITA 3646/DEL/2026Status: DisposedITAT Delhi28 September 2026AY 2025-263 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee's investments in NBFCs, even if construed as a violation of Section 11(5), are a matter for assessment proceedings and not a valid reason for denying registration under Section 12AB. The Tribunal found that such transactions do not render the assessee's activities as non-genuine. Regarding donations to unregistered institutions, the Tribunal noted that the assessee had presented registration certificates of the donee institutions downloaded from the internet. The Tribunal deemed it appropriate to restore this issue to the file of the CIT(E) for factual verification. However, the Tribunal reiterated that this, in itself, cannot be a reason for denial of registration under Section 12AB. Consequently, the grounds raised by the assessee were restored to the CIT(E) for further examination, and the appeals were allowed for statistical purposes.

What were the facts?

The assessee, Lala Sohana Mal Jagmohan Lal Khanna Educational and Charitable Trust, filed appeals for Assessment Year 2025-26 against the order of the Commissioner of Income Tax (Exemptions) [CIT(E)], Chandigarh. The CIT(E) had rejected the assessee's application for renewal of registration under Section 12AB and consequential exemption under Section 80G of the Income Tax Act, 1961. The reasons for rejection were the assessee's investments in fixed deposits with Non-Banking Finance Companies (NBFCs), allegedly violating Section 11(5), and donations made to institutions not registered under Section 12AB. The appeals were heard on August 5, 2026, and the order was pronounced on September 28, 2026.

What were the issues?

1. Whether the assessee's investments in fixed deposits with NBFCs constitute a violation of Section 11(5) of the Income Tax Act, 1961, and can be a ground for denial of registration under Section 12AB? - Assessee's contention: Not recorded. - Revenue's contention: Not recorded. 2. Whether donations made to institutions not registered under Section 12AB of the Income Tax Act, 1961, can be a ground for denial of registration under Section 12AB to the assessee? - Assessee's contention: The assessee provided downloaded registration certificates of the donee institutions from the internet, which were placed in the paper book. - Revenue's contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 12AB,Section 80G,Section 11(5)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI

Before: SHRI M. BALAGANESH & SHRI SUDHIR KUMAR

For Respondent: Shri K. Hauthang, CIT-DR

PER SHRI M. BALAGANESH, ACCOUNTANT MEMBER:

The appeals in ITA Nos.3645 & 3646/Del/2026 for AY 2025-26, arise out of 1. the ld. Commissioner of Income Tax (Exemptions), Chandigarh [hereinafter referred to as ‘ld. CIT(E)’, in short] dated 18.02.2026 for registration of u/s 12AA and 80G of the Income Tax Act, 1961. 2. We have heard the

The order continues below.

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