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Facts
The assessee, Arya Samaj, filed an application for registration under section 12AA of the Income Tax Act. The CIT(E) rejected the application, stating that the society's activities, such as running a school, were not in accordance with its stated aims and objectives, and also noted that propagating teachings of Swami Dayanand Saraswati was not considered a charitable activity.
Held
The Tribunal held that since an amendment to the Memorandum and bye-laws of the society is pending before the Competent Authority, the matter should be restored to the CIT(E) for fresh consideration after taking into account the amended documents.
Key Issues
Whether the CIT(E) erred in rejecting the registration application for a society running a school, and whether propagating religious teachings constitutes a charitable activity.
Sections Cited
12AA, 12A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘A’, NEW DELHI
Before: SHRI MAHAVIR SINGH, HON’BLE & MRS. RENU JAUHRI, HON’BLE
The above captioned appeal is preferred by the assessee against the order dated 21.03.2024, passed by Ld. CIT(Exemption), Chandigarh [for short, Ld. CIT(E)] u/s 12AA of the Income Tax Act, 1961 (hereinafter referred to as, “Act”) in Application No. CIT EXEMPTIONS CHANDIGARH/2023-24/12AA/11183.
The assessee has raised grounds of Appeal which are reproduced as below: “ 1. That the Order of the Honorable CIT(E) is bad in law and against the facts placed on the file.
1 | P a g e Arya Smaj Hisar 2. That the Honorable CIT(E) erred on holding that the society is not doing any charitable activity although evidence of running both the schools and running of Arya samaj, Hisar were submitted and placed on the file.
3. That the Honorable CIT(E) erred in rejecting the application U/s 12AA of the Income Tax Act, 1961 on the ground that propagating the teachings of Swami Dayanand Saraswati is not a Charitable Activity.
4. That the Honorable CIT(E) erred in holding the society as uncharitable on the ground that the society is earning huge profit ignoring the fact that the society being law abiding, assessee has paid full tax on the profit earned during the AY 2021-22 & AY 2022-23.
5. The assessee craves to add, alter, amend any of the grounds before the appeal is heard or finally disposed off.”
Brief facts are that the assessee had filed application in Form 10AB on 26.09.2023, seeking registration under sub-clause (iii) of clause (ac) of sub- section(1) of section 12A of the Act before Ld. CIT(E). However, Ld. CIT(E) noted that that the assessee is running a school for last several years but none of the aims and objectives mentioned the running of school as an activity of the society. Accordingly, Ld. CIT(E) vide order dated 21.03.2024 rejected the application on the ground that the activities carried out by the applicant were not in accordance with its objects. Aggrieved, the assessee has preferred an appeal before the Tribunal.
Before us, Ld. AR has submitted that an application has been filed for the requisite amendment in the Memorandum and bye-laws before the Competent
2 | P a g e Arya Smaj Hisar Authority on 02.11.2025 which is still pending. A copy of the same has been placed before us.
After hearing both the parties, we deem it appropriate to restore the matter to Ld. CIT(E) for fresh consideration after taking into account the amended memorandum and by-laws and decide the application on merits. Needless to add, the assessee should be given a reasonable opportunity of being heard.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the Open Court on 14 -01-2026.