NEW LIFE FELLOWSHIP TRUST,HARYANA vs. CIT EXEMPTION, CHANDIGARH

ITA 2549/DEL/2026Status: DisposedITAT Delhi09 October 20266 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the impugned order was passed in violation of the principle of natural justice. The assessee had raised ground No. 10 specifically regarding this violation, and both parties had made submissions on the matter. The Tribunal noted that the assessee was previously registered under Section 12AB, making an effective opportunity of hearing crucial. In the larger interest of justice, the Tribunal set aside the impugned order and restored the matter to the file of the CIT(Exemptions). The CIT(Exemptions) was directed to decide the application afresh after providing the assessee with an effective opportunity to present its case and submit all necessary materials to fulfill the conditions and requirements of law for registration under Section 12AB. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, New Life Fellowship Trust, filed an appeal against the order dated 18.02.2026 passed by the CIT(Exemptions), Chandigarh. The CIT(Exemptions) rejected the Trust's application for registration under Section 12AB(1)(ac)(ii) of the Income-tax Act, 1961. The rejection was based on the finding that the Trust's actual activities were predominantly religious, while its stated objects were education and medical relief, indicating a mismatch. The CIT(Exemptions) observed that expenditures on education and medical relief were minimal, and the primary activities involved conducting Sunday church gatherings at rented premises, with no substantial independent charitable programs in education or medical relief evident. The Trust was previously registered under Section 12AB.

What were the issues?

1. Whether the order dated 18.02.2026 passed by the Ld. CIT (Exemptions), Chandigarh rejecting the application for registration u/s 12AB of the Income-tax Act, 1961 is illegal, arbitrary, unjustified and bad in law? 2. Whether the Ld. CIT (Exemptions) has erred in law and on facts in holding that the appellant has failed to establish the genuineness of its activities as required under section 12AB(1)(b) of the Act? 3. Whether the Ld. CIT (Exemptions) has grossly erred in concluding that there is a mismatch between the objects of the Trust and its activities? Assessee's Contentions: - The order was passed in violation of the principles of natural justice as conclusions were drawn beyond show-cause observations and without confronting the appellant with specific defects. - The CIT(E) wrongly superseded earlier registration without establishing violations. - An effective opportunity of hearing was not given, and the earlier registration was not considered. - Registration cannot be denied merely because the major portion of expenditure relates to religious activities, as the Act does not prescribe mandatory expenditure percentages for different objects at the registration stage. - At the registration stage, the scope of enquiry is limited to examining objects and prima facie satisfaction of genuineness, not the quantum of expenditure. - Religious activities do not disqualify a Trust from registration u/s 12AB. Revenue's Contentions: - There is no illegality in the impugned order. - However, to meet the ends of justice, the applicant should be granted one more effective opportunity by restoring the matter to the file of the Ld. CIT(E).

Which sections of the Income-tax Act were involved?

Section 12AB,Section 12AB(1)(ac)(ii),Section 12AB(1)(b),Section 11

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘C’, NEW DELHI

Hearing: 15.07.2026Pronounced: 09.10.2026

Per Raj Kumar Chauhan, Judicial Member:

The appeal of the assessee is directed against the order dated 18.02.2026 of ld. CIT(Exemptions), Chandigarh wherein the application for registration u/s 12AB(1)(ac)(ii) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) has been rejected on the ground that the actual activity of the applicant were predominantly religious whereas the main objects claimed are education and medical relief resulting into a clear mismatch between the objects and activities.

2.

Facts in brief are that the applicant manages New Life Church, Gurgaon and claims that its main objects include education and medical relief. The ld. CIT(E) while dismissing

2 New Life Fellowship Trust the applicatio

The order continues below.

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