DAGA FOUNDATION ,BETUL vs. CIT EXEMPTION BHOPAL, BHOPAL

PER BENCH:

These five appeals filed by the assessee are directed

against the impugned order dated 30.09.2024 & 29.03.2026

passed by the learned Commissioner of Income-tax (Exemption), Bhopal ["CIT(E)"], whereby the applications of the assessee for

renewal of registration/approval under section 12AA/12AB, 80G,

12A(1)(ac)(ii), 12A(1)(ac)(vi), & 80G(5)(ii) respectively dated 30-09-

2024 (under the general provisions of the Income Tax Act 1961)

& 29.03.2026 (under the new Provisions of Income Tax 1961)

were rejected.

registered under the Registrar of Trust SDM Betul vide

registration no.06/113(b-4) dated 06.08.2015 engaged in

running educational activities with the object of upliftment and

progress of women, poor, farmers, education and public welfare

of society at large and filed applications for renewal of

registration/approval u/s 12AA/12AB, 80G, 12A(1)(ac)(ii),

12A(1)(ac)(vi), & 80G(5)(ii) of the Act under the Provisions of the

Income Tax Act 1961. However, the applications u/s 12AA/12AB

& 80G relating to general provisions of the I.T. Act, 1961, the Ld.

CIT(E) rejected the same on the ground that the assessee has

failed to produce requisite documents/information/clarification

as sought vide letters issued by the Ld. CIT(E). Further the Ld.

CIT(E) noted that the assessee has not incurred charitable

activities as has been claimed in its submission and audit

reports. So far as the applications under the new provisions

under sections 12A(1)(ac)(ii), 12A(1)(ac)(vi), & 80G(5)(ii) of the

Act are concerned, the same were simply rejected on the ground

that since the appellate proceedings in the case of assessee trust

are pending with authority concerned as on date, the

applications under sections 12A(1)(ac)(ii), 12A(1)(ac)(vi), &

80G(5)(ii) of the Act relating to the new provisions of I.T. Act,

1961.

has filed the present appeals before this Tribunal. Before us, the

Ld. Counsel for the assessee submitted that Ld. CIT(E) was not

justified in holding that the assessee has not submitted any

clarification in response to the letters issued by the Ld. CIT(E)

because the assessee duly filed detailed written submissions.

Further the Ld. CIT(E) was also not justified in holding that the

assessee has not undertaken charitable activities as claimed in

the submissions and audit report. Ld. Counsel for the assessee

submitted that the assessee trust for formed with the objection of upliftment and progress of women, poor, farmers, education and

public welfare of the society at large. The trust with its aim of

empowerment of women and children is engaged in providing free

vocational and educational training to underprivileged and non-

resourceful students and individuals. The assessee trust also

provides financial and non-financial assistance to medical

institutions, school, child welfare, sportspersons, other societies

and entities working for underprivileged. Ld. Counsel for the

assessee also submitted that the assessee is not running any

such regular institute where affiliation is required. Educational

institutions are run by assessee are private coaching classes for

9th to 12th, totally free of cost, for poor students who can not

afford to pay for private coaching classes and schools and since

the assessee trust does not own any land its name, the registered

office of the trust is situated at 1, Daga House Kothi Bazar Betul

which is property belonging to the Daga Family and Daga family

does not charge any rent from the assessee trust for this

establishment. Further outlets and premises which are being

used as 120 free coaching classes and centres as also mentioned

in its audit reports are also available rent free to the assessee trust as the same are being provided by trusties, their friends

and relatives for the social cause without any cost of rent and

encumbrance. The details of the same were also submitted before

the Ld. CIT(E). However, on the query of the Ld. CIT(E) sought

through letter dated 10.09.2024 the assessee trust filed details of

active coaching centres run by the foundation in 7 pages

contending that the coaching centres are mostly run in the

premises of Government School and Colleges for the spread and

upliftment of education in and around the district, nearby

villages and rural areas. The list of such centres in 7 pages has

also been reproduced in the order of the Ld. CIT(E). However

without intimation to the assessee trust, the Ld. CIT(E) to verify

the authenticity of the list submitted by the assessee, issued a

letter dated 24.09.2024 to the District Education Officer (DEO),

Betul requesting therein to provide the confirmation in respect of

conducting free coaching in Government Schools located in the

jurisdiction of DEO, Betul on which the DEO, Betul simply

inform that the permission for free coaching in Government

Schools were not given and therefore, Ld. CIT(E) rejected the

applications under challenge. But, Ld. CIT(E) failed to supply the information given the DEO, Betul and also failed to provide cross

examination to the assessee in this respect which was not

justified. In support of the submission made before us, the Ld.

Counsel for the assessee also submitted on 17.12.2025

application for admission of additional evidence under Rule 29 of

the Income Tax (Appellate Tribunal) Rules 1963 and the relevant

index of paper book filed before us is as under:

CIT(E) submitted that the assessee has failed to produce

requisite documents/information/clarification as sought vide

letters issued by the Ld. CIT(E). Further the assessee has not

incurred charitable activities as has been claimed in its

submission and audit reports. In support of his assertion, the Ld.

CIT-DR furnished a report dated 24.02.2026 sent by CIT(E),

Bhopal wherein Ld. CIT(E) submitted that the assessee changed

its earlier stance and stated that the coaching centres are mostly

run in the premises of Government Schools and Colleges and

DEO, Betul denied stating that permission for free coaching in

Government Schools were not given. Ld. CIT-DR submitted that

the assessee was conducting evening classes on the premises of a

Government Schools without obtaining the requisite approval or

permission from the competent authority. Such activities

undertaken without proper authorisation, were not in accordance

with the applicable legal requirements. The Ld. CIT-DR further

submitted that the affidavits furnished by the assessee were

identically worded and prepared in uniform format, thereby

raising doubts regarding evidentiary value and authenticity.

Accordingly, the Ld. CIT-DR contended that the submission and

supporting evidence furnished by the assessee required careful

scrutiny and independent verification.

from where the claimed activities are being carried out could not

be substantiated by the assessee trust. Ld. CIT(E) in respect of

corporate donation received during F.Y.2021-22 submitted that

the assessee failed to provide copy of donation letter or any other

documents which may establish the nature of such donation.

available on record. We find that CIT(E) rejected the applications

on the ground that the assessee did not carry out any genuine

educational activities. The Learned CIT(E) stated in the order that

enquiry was conducted from the District Education Officer Betul

and it was stated by him that no permission was granted by the

education department to the assessee to conduct the free

coaching centres at the Government Schools. On this basis it

was held that the activities of the assessee are not genuine. As

evident from the impugned order (page 9 & 10) a letter was sent by the office of the Learned CIT(E) to the District Education

Officer (DEO), Betul on 24.09.2024 making certain enquiries.

Thus evidently the Learned CIT(E) issued a letter from Bhopal on

24.09.2024 making certain enquiry, from DEO Betul, whose

reply was also received and the impugned order rejecting the

registrations was passed by the Learned CIT(E) on 30.09.2024.

We find that the Ld. Counsel for the assessee vehemently

contended that an enquiry was conducted and the outcome of

the said enquiry was never communicated to the assessee by the

Learned CIT(E) before taking an adverse view in the matter. The

assessee was never confronted with the enquiry report. Thus the

assessee trust was not afforded any opportunity much less

sufficient and proper opportunity of being heard to the assessee

with respect to an adverse enquiry report, which fact has

necessitated filing of the additional evidence.

additional evidence in the form of affidavits of beneficiaries

(students and their parents) and teachers associated with the

educational activities which conclusively establish that the

assessee trust had, in fact, been carrying out genuine educational and charitable activities. The said affidavits could

not be filed before the Ld. CIT(E) due to bona fide and

unavoidable circumstances, inter alia, the Ld. CIT(E) conducted

enquiries at his own level on 24.09.2024 and passed the order on

30.09.2024 relying upon material allegedly gathered behind the

back of the appellant. No show-cause notice or opportunity was

granted to the appellant to rebut or controvert the material

collected by the Ld. CIT(E). The adverse material and findings

were disclosed to the assessee trust for the first time only

through the impugned rejection order. Considering the

submission of the Ld. Counsel for the assessee, we are of the

view that since the assessee trust was never confronted with the

alleged adverse material nor put to notice regarding the

requirement of furnishing affidavits of beneficiaries and teachers,

the assessee trust was prevented by sufficient cause from

producing the said evidence at the stage of proceedings before

the Ld. CIT(E).

the additional evidence now sought to be filed goes to the root of

the matter, is crucial for a just adjudication of the issue.

Accordingly we admit the additional evidence filed by the

assessee trust. So far as the issue relating to alleged receipt of

CSR donations is concerned, we find that the Ld. CIT(E) noted

that the assessee has received CSR donation without having CSR

registration and also that the assessee has not submitted details

as called for vide notice dated 10.09.2024. The Ld. CIT(E) has

observed that the assessee trust allegedly received CSR

donations from group companies without having CSR

registration. However, Ld. Counsel for the assessee claimed that

these observations are factually incorrect and have been again

made without granting any opportunity to the assessee trust to

explain or rebut the same. Firstly the assessee has duly

complied with the notice dated 10.09.2024 vide its submission E-

filed on 17.09.2024, wherein it was categorically stated that the

assessee trust has not received any CSR donations. Still it has

been held by the Learned CIT(E) that the assessee has received

CSR donation without having CSR registration in violation of the

provisions of Companies Act. However, no showcause notice was

issued on this issue during the proceedings. To demonstrate the

fact that the donor companies were loss-making and were not liable to incur CSR expenditure, the assessee trust sought to file

by way of additional evidence the audited financial statements

and income tax returns of the donors i.e. Inmix Trade Private

Limited, and Artefact Properties Private Limited. Thus Ld.

Counsel for the assessee contended that the assessee trust was

prevented by sufficient and bona fide cause from filing the said

documents before the Ld. CIT(E) since no opportunity was

granted to rebut the observation that the donations made by the

corporates was not in the nature of the CSR and also that such

corporates were not required to make any CSR donation and the

adverse inference was drawn for the first time in the impugned

order. The assessee trust could not file the aforesaid documents

and affidavits before the Ld. CIT(E) due to circumstances beyond

its control, namely, the enquiries were conducted by the Ld.

CIT(E) and the enquiry results were never confronted with the

assessee trust. The issues were decided without putting the

assessee trust to notice regarding the specific adverse inferences

proposed to be drawn. Thus, the assessee trust was genuinely

and bona fide prevented by sufficient cause from adducing the

evidence at the earlier stage of the proceedings.

filed through the Ld. CIT-DR, the Ld. CIT(E) fairly in agreement

that these documents may be admitted for the sake of natural

justice. Thus, considering the submissions of both the parties,

we are of the view that for admission of additional evidence Rule

29 of the Income-Tax (Appellate Tribunal) Rules, 1963 empowers

this Tribunal to admit additional evidence where the party was

prevented by sufficient cause from producing the same before the

lower authority or where such evidence is necessary for a just

decision of the case. We find that in the present case, the

additional evidence sought to be filed is essential for a just and

proper adjudication of the appeal and for rendering substantive

justice. The admission of additional evidence shall not cause any

prejudice to the Revenue, as the Department shall be at liberty to

verify the same and the assessee trust also undertook to fully

cooperate in any remand or verification proceedings. In view of

the aforesaid facts and circumstances, we admit the additional

evidence filed along with this application under Rule 29 of the

ITAT Rules in the interest of justice.

present case, we observe that the assessee has pointed out

peculiar facts and circumstances through the additional

evidences narrated above which require the consideration at the

level of the Ld. CIT(E) afresh for proper and just appreciation of

facts. Therefore, we are of the view that in the interest of

substantial justice, we deem it appropriate to set aside the

impugned order and restore the matter to the file of Ld.

CIT(E) for de novo consideration of the assessee application

for renewal of registration u/s 80G(5)(ii) & 12AB of the Act.

basis of the entire material available on record and additional

evidence submitted before the ITAT, judicial pronouncements

and the facts submitted by the assessee during the proceedings

before to the Ld. CIT(E) and before us and pass a fresh speaking

order in accordance with law, after providing reasonable

opportunity of being heard to the assessee.

12AA/12AB & 80G to the file of Ld. CIT(E) for fresh adjudication,

the issued raised in appeals relating to 12A(1)(ac)(ii),

12A(1)(ac)(vi), & 80G(5)(ii) are also restored back to the file of the

Ld. CIT(E) for fresh adjudication because the same are

consequential in nature in view of the restoration of issues raised

in the appeals relating to u/s 12AA/12AB & 80G.

statistical purposes.

Order pronounced in the open court on 30 /10/2026.

Sd/- Sd/-

(PARESH M. JOSHI) (ARVIND SONI) JUDICIAL MEMBER ACCOUNTANT MEMBER

Patel/Sr. PS Indore िदनांक /Dated : 30/10/2026

Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative Akhilesh Kumar (6) Guard File Digitally signed by Akhilesh Kumar Date: 2026.11.02 17:48:25 +05'30' By order UE COPYSr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore

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