SANT KIRPAL VIDYAK MISSION,,LUDHIANA vs. CIT (EXEMPTIONS), CHANDIGARH

To run educational institutions for providing education to children residing in rural areas.

To provide free educational to deserving and poor children. On perusal of the material available on record, it is also noticed that the society was registered with Registrar of Societies, Kapurthala, Punjab in the name of Smt. Maya Devi Sahadev Educational Society, G. T. Road, Vill. Mouli, Teh. Phagwara, Kapurthala, Punjab on 29th March, 2000. It A.Y.2022-23 3 is further noticed that the documents submitted pertains to "Smt. Maya Devi Sahadev Educational Society" having PAN No.AAATM9259M which lies with jurisdiction of ITO, Ward Jalandhar who is also having registration under section 12AB of the act with Unique Registration Number is AAATM9259ME20216 dated 24.09.2.021. Keeping in view of the above facts and circumstances of the case, it prima facie appears that you have obtained registration by submitting wrong documents. You are therefore requested to show cause as to why the registration granted to the your society u/s 12AAand u/s 12A(1)(ac)(i) of Act on 24.09.2021 should not be cancelled."

In response thereto, the assessee furnished following reply:- "WE ARE IN RECEIPT OF ABOVE REFERED NOTICE WHERE IN IT WAS POINTED OUT THAT WHILE APPLYING RENEWAL OF EXEMPTION ON 24.09.2021 WE HAVE UPLOADED THE REGISTRATION CUM TRUST DEED OF MAYA DEVI SAHDEV EDUCATIONAL SOCCIETY INSTEAD OF SANT KIRPAL VIDYAK MISSION. WE WERE ISSUED FORM 10 AC ON 24.09.2021 EXTENDING OUR REGISTRATION FROM AY 2022-23 TO 2026-27. BOTH THESE SOCIETIES ARE OUR CLIENT OUR COMPUTER OPERATOR HAS UPLOADED THE TRUST DEED OF MAYA DEVI SAHDEV EDUCATIONAL SOCIETY INSTEAD OF TRUST DEED OF SANT KIRPAL VIDYAK MISSION BUT APPLICATION WAS RIGHTLY FILLED BY US MENTIONING CORRECT PARTICULARS. WE ARE NOW FILING TRSUT DEED OF SANT KIRPAL VIDYAK MISSIONDATED 03.03.2021 i.e. BEFORE APPLYING RENEWAL OF EXTENSION."

Along with the reply, the assessee furnished its trust deed which was executed on 16.02.2021. Upon perusal of same, another notice was issued to the assessee on 02.01.2025, which has also been reproduced as under:- "As per the reply submitted by you trust has been formed on 16.02.2021. However, it is seen that the trust has got five years registration from CPC u/s 12A(1)(ac)(i). The same appears to be irregular as CPC can grant registration only in cases which had been registered u/s 12A before 01.04.2021. Therefore, you are requested to show cause by 13.01.2025 why your registration u/s 12A should not be revoked."

The assessee in response to the aforesaid notice furnished the following reply:- "WE ARE IN RECEIPT OF YOUR ABOVE REFERED NOTICE WHERE IN YOUR HONOUR HAD STATED THAT WE IN REPLY DATED 16.09.2024 STATED THAT TRUST IS FORMED ON 16.02.2021 BUT AS A.Y.2022-23 4 PER YOUR RECORD WE HAVE GOT EXEMPTION UNDER SEC12A(1)(ac)(1) FOR THE LAST FIVE YEARS. WHICH AS PER YOUR VERSION IS IRREGULAR. WE WANT TO SUBMIT THAT OUR TRUST WAS FORMED 06.02.1992.WE GOT SEC 12A EXEMPTIOON ON DEC 2003 W.E.F 01.04.1996 VIDE LETTER NO CIT/LDH/TECH/12-A/27/2003-2004/3887 ISSUED BY CIT LUDHIANA. THIS DEED AND EXEMPTION CERTIFICATE IS ON RECORD WITH YOU.WE ARE ENCLOSING COPY OF EXEMPTION CERTIFICATE ISSUED BY CIT LUDHIANA IN DEC 2003. WE HAVE AMENDED TRUST DEED FROM TIME TO TIME ALL COPY OF AMENDED DEEDS ARE WITH YOUR DEPARTMENT. WE ARE ENCLOSING AMENDED TRUST DEED OF 16.05.2007. ALONG WITH CERTIFICATE OF REGISTRATION OF TRUST. WE HAVE NOT GOT WRONG REGISTRATION OF EXEMPTION AS STATED BY YOU. WE HAVE ENCLOSED AMENDED TRUST DEED OF 03.02.2021 ALONG WITH THE LETTER REFERED ABOVE OUR TRUST IS ESTABLISHED SINCE 06.02.1992 AND RUNNING SCHOOLS SINCE THEN. SO IT IS WRONG TO SAY THAT TRUST IS FORMED ON 16.02.2021."

The reply of the assessee has been perused. It is worth mentioning that the sole reason for which the assessee was issued original show cause notice was that the assessee did not upload the correct documents to obtain registration from CPC under section 12(A)(1)(ac)(i) of the Income-Tax Act. One of the basic documents to obtain the aforesaid registration was the registration under section 12A of the Income Tax Act (under old regime) which the assessee failed to provide despite being given adequate opportunity. On top of it, the assessee in its reply dated 09.01.2025 stated that the said documents [registration certificate under section 12A] was on record with the department. The assessee stated that it is enclosing copy of exemption certificate issued by CIT Ludhiana but failed to enclose it. The assessee conveniently overlooked the fact that the documents it submitted to obtain registration from CPC under section 12(A)(1 )(ac)(i) pertained to Maya Devi Sahdev Educational Society, Phagwara.

In view of the discussion above, it is evident that the assessee trust obtained registration from CPC by submitting wrong documents and then despite opportunities failed to produce them during the cancellation proceedings. Therefore, the registration granted to the assessee trust u/s A.Y.2022-23 5 u/s 12(1)(ac)(i) of the Act, 1961 is hereby cancelled by invoking the provisions of 12AB(4)(ii) of the Act. Consequently, the assessee trust would not be entitled to claim any Exemption u/s 11 & 12 of the Act.”

The brief facts of the case are that assessee Trust was registered with the Registrar of Firms & Societies, Punjab vide Registration No.656-1993-94, which means, it came into existence in 1993-94. It emerges out that assessee Trust is running following educational institutions, as observed from the order of the ITAT passed in ITA 561/CHD/2022 in the case of the assessee for assessment year 2017-18 :

The ld. counsel for the assessee while impugning order of ld. CIT(E) submitted that assessee was granted registration u/s 12AA of the Income Tax Act in December,2003. Hence, it is an old Trust which was enjoying registration. The copy of the Registration Certificate has been placed at page 19 of the Paper Book. We deem it appropriate to take note of this Registration Certificate also, which reads as under :

With effect from 01.04.2021, the Scheme of Registration for Charitable Institution has been changed. It has been provided u/s 12A(1)(ac)(i) that the Trust and Institutions which were enjoying registration immediately before Taxation And Other Law (Relaxation & Amendment of Certain Provisions) Act 2020 (38 of 2020) is introduced. Such Institutions have to apply for registration within three months from the 1st day of April,2021. Similarly, sub-clause (iii) of A.Y.2022-23 7 this Section further provides that Trusts and Institutions which were not enjoying registration prior to bringing new provision on the Statute, were required to apply for a provisional registration u/s 12AB atleast six months prior to expiry of period of provisional registration or within six months of commencement of its activities, whichever is earlier. In other words, the old Trusts were required to file application for grant of registration straight away and the new Trusts would be granted a provisional registration. The ld. counsel for the assessee has emphasized that since assessee was an old Trust, therefore, it has applied u/s 12A(1)(ac)and it was given registration vide order dated 24.09.2021. This registration was valid from assessment year 2022-23 to assessment year 2026-27. This registration has been cancelled by the ld. CIT (E) on the ground that assessee has uploaded Trust Deed of Smt. Maya Devi Sahdev Educational Society, Phagwara alongwith Form No. 10AC. She was of the view that assessee has obtained registration by withholding complete facts and therefore, this registration deserves to be cancelled. He pointed out that firstly Show Cause Notice has been given as if registration of Smt. Maya Devi Sahdev A.Y.2022-23 8 Educational Society is to be cancelled. He drew our attention towards copy of the Show Cause Notice available on Paper Book page No. 5 and 6. He further pointed out that Smt. Maya Devi Sahdev Educational Society is a separate entity which was registered with the Registrar, Firms & Societies in 2000 under Registration No. KPT/ASR/20 of 2000. It was also enjoying registration u/s 12AA(1)(ac)(i) of the Income Tax Act vide order dated 20.06.2002. Copy of this Registration Certificate has been placed on page No. 2 of the Paper Book. He also submitted that this Society has also applied for registration and it has also been granted registration alongwith the assessee Trust in Form 10AC after change in the law w.e.f. 01.04.2021. The Income Tax litigation of both the assessees was being handled by the same office of the professional. There might have some overlapping in the submission of the details but that does not mean any authority has factually recorded a finding that assessee Trust does not exist or it is bogus.

The ld. CIT DR, on the other hand took us through paragraph Nos. 3, 6 and 7 of the impugned order. She emphasized that assessee itself has admitted that at the time of renewal of exemption, Trust Deed of Smt. Maya Devi Sahdev Educational Society was uploaded. It is an admitted fact that such registration was taken by withholding all the material facts.

We have duly considered the rival contentions and gone through the record carefully. A perusal of the record would indicate that assessee is an old Trust. It has been running educational institution. Its assessments have been framed under scrutiny assessments and appeal in assessment year A.Y.2022-23 10 2017-18 travelled upto the Tribunal. It has been enjoying registration u/s 12A as discernable from the certificate extracted supra. The only allegation against the assessee by the ld. CIT (E) is that when the scheme of Registration has been changed w.e.f. 01.04.2021, then assessee has uploaded a Trust Deed of some other Trust. In our opinion, the registration has been bestowed upon the assessee by the CPC Bangalore while processing the documents but once this fact has come to the notice of the ld. CIT (E), then instead of treating such aspect as a gospel truth, ought to have fairly examined these aspects. She ought to have determined whether certificate issued to the assessee in December, 2003 was existing or not when new law has been introduced w.e.f. 01.04.2021. She has not recorded any finding in that area. Even if for the sake of argument, it is assumed that some mistake happened at the end of the professional, then would it be of that nature that registration is to be cancelled. Once all these factors are brought to the notice of ld. CIT (E), she should have dropped the proceedings instead of cancelling the registration. She has not recorded any finding anywhere that some fraud has been committed by the assessee by A.Y.2022-23 11 withholding information. The assessee has pointed out that Registration Certificate is on the record or it should have been called for by the ld. CIT (E) from the concerned officer and satisfy herself before passing any order against the assessee. If complete record was not possessed by the concerned authority, then atleast Department must have been maintaining a Register wherein certificates of registration are being noted. It might have been verified from there. But, instead of carrying out any exercise, the ld. CIT (E) has just taken one circumstance and assumed everything is not existing. To our mind, the impugned order is being passed without application of any mind and not sustainable in the eyes of law. Therefore, we quash the impugned order and restore the registration granted to the assessee vide order dated 24.09.2021 which is valid from assessment year 2022-23 to assessment year 2026-27.

In the result, appeal of the assessee is allowed. Order pronounced on 04.02.2026.