INCOME TAX OFFICER(E) WARD- 2(4), NEW DELHI, CIVIC CENTRE NEW DELHI vs. PRAKASH SEWA TRUST, PASCHIM VIHAR

ITA 4305/DEL/2024Status: DisposedITAT Delhi07 January 2026AY 2016-1716 pages
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What did the Tribunal hold?

The Tribunal held that a trust registered under Section 12A is eligible for exemption under Section 11 if conditions are met, and a temporary break in charitable activities does not automatically disqualify it. Donations to other charitable trusts can be considered application of income.

What were the facts?

The assessee, a charitable trust registered under Section 12A, declared Nil income. The AO denied exemption under Sections 11 & 12, holding that the trust's gross receipts from land sale were taxable as AOP because it had not expended funds on charitable activities and had donated the entire sale proceeds to other trusts.

What were the issues?

Whether exemption under Section 11 can be denied to a Section 12A registered trust for not carrying out charitable activities and donating sale proceeds. Whether inter-charity donations are valid application of income.

Which sections of the Income-tax Act were involved?

Section 11,Section 12,Section 12A,Section 143(3)

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Income Tax Appellate Tribunal, DELHI BENCH ‘F’: NEW DELHI

Before: SHRI YOGESH KUMAR U.S. & SHRI MANISH AGARWAL

For Appellant: Dr. Kapil Goel, Adv
For Respondent: Shri Rajesh Kumar
Hearing: 30/10/2025Pronounced: 07/01/2026

PER MANISH AGARWAL, AM: This appeal is filed by Revenue against the order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [‘Ld. CIT(A)' in short] dated 25.07.2024 in Appeal No.40/10204/2018-19 for Assessment Year 2016-17 arising out of the order passed by AO u/s 143(3) of the Act ('the Act' for short) dated 30.12.2018. 2. Briefly stated the facts are that assessee is a charitable trust registered u/s 12A of the Act and filed its return of income on 13.10.2018 declaring Nil income. The case was selected for scrutiny under CASS and after considering the submissions made by assessee, the AO held that the assessee is not eligible for claiming exempti

The order continues below.

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