TIF FOUNDATION,CHANDIGARH vs. CIT EXEMPTIONS, CHANDIGARH

1

IN THE INCOME TAX APPELLATE TRIBUNAL
‘B’ BENCH, CHANDIGARH

HYBRID HEARING

BEFORE HON’BLE SHRI RAJPAL YADAV, VIDE PRESIDENT
AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

अपीलाथŎकीओरसे/ Appellant by : Shri Nikhil Goyal Advocate a/w Shri
Ashok Goyal (CA) -Ld. AR
ŮȑथŎकीओरसे/Respondent by :
Smt. Kusum Bansal (CIT) – Ld. DR

सुनवाईकीतारीख/Date of Hearing
:
17-07-2025
घोषणाकीतारीख /Date of Pronouncement
:
16-09-2025

आदेश / O R D E R

Manoj Kumar Aggarwal (Accountant Member)

object of the assessee-trust. The grant of awards to renowned and privileged personalities would not be considered as charitable activity by any stretch of imagination. Any activity could be considered as charitable only if it belongs to the general public rather than being confined to a group of privileged people.
2.3 Another observation was that another entity M/s Ideaz factory and Capgro Pvt. Ltd. pertained to the same person who was the author of the trust i.e.,Shri Nitin Narang. The transaction history and bank account behaviour typically reflected series of suspicious patterns and activities.
There was credit of Rs.5 Lacs on 03-09-2024 from this entity and on the same day, this amount was transferred as prize and award distribution.
Again on 09-10-2024, there was a credit of Rs. 1 Crore and on the same date, this amount was used for prize and award distribution. The assessee also obtained unsecured loan of Rs.51 Lacs from Capgro
Private Limited which was used for prize distribution to Shri Gukesh, a chess player. Shri Nitin Narang was the president of All India Chess
Federation. It would appear that the trust was being used for activities which was unrelated to the objects of trust and for cementing the position in the trustee in the Chess Federation and had nothing to do with the charity.
2.4 The assessee furnished its reply on 23-01-2025. Upon perusal of the same, it was concluded by Ld. CIT(E) that the main objective of the assessee-trust was to provide food, medical assistance. education etc.
to the needy. It was nowhere mentioned that the trust was formed to distribute prize and awards to the players to motivate others from the 4

society to join them. The grant of award to the renowned and privileged personalities could not be considered as charitable activity by any stretch of imagination. Any activity could be considered as charitable only if it belonged to the general public rather than being confined to a group of privileged people only. The assessee spent only Rs.2.79 Lacs for food expenses which was the main object as against Rs.57.25 Lacs as spent on prize and award distribution which was not even the object of the assesses-trust. The assessee incurred more than 95% of the total amount on those activities which was not even the object of the assessee-trust. Further, taking of loan of Rs.51 Lacs from related entity for distribution as prize could not be considered as charitable activity.
The Ideaz Factory and Capgro Pvt. Ltd and assessee-trust share the same Director. The circular movement of funds in the bank account raises suspicion of round tripping. For example, unsecured loan of Rs.51
Lacs was provided by Capgro which was given as award to D Gukesh.
Few days later, Rs.51 Lacs was received from JMS Infra Realty which was debited to Capgro the very next day. Therefore, the claim of the applicant of being involved in charitable activities comes under cloud. On these facts, the impugned application was rejected on the ground that the activities of the assessee-trust were not aligned to the professed objects of the assessee. Aggrieved, the assessee is in further appeal before us. Having considered rival submissions and upon perusal of case records including written submissions of Ld. AR, our adjudication would be as under.
Our findings and Adjudication

It could clearly be seen that the primary objects of assessee-trust is tp provide foods, health, education, energy conservation etc. The distribution of prize money in sports is not even specified objects of assessee-trust. The main thrust of arguments of Ld. AR is that the activity of sports promotion would fall under object No.5. The said plea could not be accepted since sports promotion is clearly not a specific object of the assessee-trust and its substantial resources have been expanded towards this activity. Notably, the undisputed fact that remains is that the assessee has spent meagre amount of Rs.2.79 Lacs on food expenses which is the main object of the assessee-trust. A substantial amount (95%) is spent on activities which is not even specific object of the assessee-trust. It could further be seen that the 6

activity of prize distribution is funded out of unsecured loans as taken from related entities which do not constitute any charitable activity.
Even if the transactions are presumed to be genuine, such kind of transactions are clearly not a feature of a charitable entity which has just started its operations. The argument of Ld. AR is too stretched to be accepted. If the substantial object of the assessee-trust was to promote the sports, the said object could have been stated in specific terms in the trust deed. The pattern of assessee’s activities, as observed by Ld. CIT(E), clearly supports the fact that little efforts have been made by the assessee towards attainment of its prime objects.
4. After going through the findings of Ld. CIT(E), we would concur that though the main objective of the assessee-trust was to provide food, medical assistance. education etc. to the needy, however, no substantial efforts were made by the assessee in this direction. The grant of award to the renowned and privileged personalities out of unsecured loans from related entities could not be considered as charitable activity by any stretch of imagination. Any activity could be considered as charitable only if it belonged to the general public rather than being confined to a group of privileged people only. The bank statement of the assessee supports the fact of circular movement of funds between related entities.
Accordingly, the conclusion that the activities of the assessee-trust were not aligned to the professed objects of the assessee, could not be faulted with. Therefore, we find no reason to interfere in the adjudication of Ld.
CIT(E). In the result, the appeal stands dismissed.
5. 7

In this appeal, the assessee is aggrieved by rejection of approval u/s 80G. The same is merely consequential in nature. The approval was denied in the absence of registration u/s 12AB. Since, we have confirmed rejection of registration u/s 12AB, the impugned approval has rightly been declined by Ld. CIT(E). This appeal also stands dismissed.
6. Both the appeals stand dismissed.
Order pronounced on 16-09-2025. (RAJPAL YADAV) (MANOJ KUMAR AGGARWAL)
VICE PRESIDENT ACCOUNTANT MEMBER

Dated: 16-09-2025

आदेश की Ůितिलिप अŤेिषत /Copy of the Order forwarded to :
1. अपीलाथŎ/Appellant
2. ŮȑथŎ/Respondent
3. आयकरआयुƅ/CIT
4. िवभागीयŮितिनिध/DR
5. गाडŊफाईल/GF