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Facts
The assessee, Rainbow Social & Educational Trust, applied for registration under Section 12A(1)(ac)(iii) of the Income-tax Act, 1961, citing relief to the poor and education as its main objects. The CIT(E) denied registration, holding that the trust failed to prove its primary school was approved by the Directorate of Education, Delhi, and thus was not an eligible educational institution.
Held
The Tribunal held that affiliation with a board like CBSE or the Directorate of Education is not a mandatory requirement for an institution to be considered an 'educational institution' under Section 10(23C)(vi) of the Act. The decision relied on the Delhi High Court's ruling in the case of Delhi Music Society.
Key Issues
Whether affiliation from a statutory board is a mandatory requirement for an institution to be considered an educational institution for the purpose of registration under the Income Tax Act.
Sections Cited
12A(1)(ac), 10(23C)(vi)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘A’: NEW DELHI
(Assessment Year: 2024-25) Rainbow Social & Educational Trust, vs. CIT (Exemption), E – 105, Shaheen Bagh, Jamia Nagar, Delhi. New Friends Colony, New Delhi – 110 025. (PAN : AAETR6037J) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Ruchesh Sinha, Advocate Ms. Monalisa Maity, Advocate REVENUE BY : Shri Jitender Singh, CIT DR Date of Hearing : 03.09.2025 Date of Order : 26.11.2025 O R D E R
PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER :
The assessee has filed appeal against the order of the Learned Commissioner of Income Tax (Exemption), Delhi [“Ld. CIT(E)”, for short] dated 06.12.2024 for the AY 2024-25.
At the time of hearing, ld. AR of the assessee brought to our notice the relevant facts, the applicant/assessee, M/s. Rainbow Social & Educational Trust is incorporated on 08.03.2022 and the assessee has obtained provisional registration vide CPC order dated 12.05.2022. Further the assessee filed an 26.06.2024 in Form 10AB for regular registration u/s 12A(1)(ac) (iii) of the Income-tax act, 1961 (for short ‘the Act’) and the main objects of the applicant society are relief to the poor, education and also submitted copy of Trust Deed in this regard. During the proceedings, the assessee was issued questionnaire dated 05.07.2024 with a request to furnish certain details/documents/clarifications in support of its claim of registration. In response, the assessee filed the details. Further the assessee was asked for pending details as well as additional details, which the assessee filed. He submitted that the ld. CIT (E) observed that the assessee has filed part details. Ld. CIT (E) further observed that assessee is running a primary school for students upto VIth class in the name of Bright Pathways Global School at E- 105, Shaheen Bagh, New Delhi. He submitted that ld. CIT (E) further observed that benefits are available u/s 12A or 10(23C) of the Act for educational institutions which are approved by the State Government Board of Central Government Board and the assessee trust has failed to prove the approval letter for running a primary school from Directorate of Education, Delhi. Accordingly, ld. CIT (E) held that the assessee trust is not eligible for registration u/s 12A under the category of Education.
Further, ld. AR submitted that against the order of the ld. CIT (E), assessee is in appeal before the ITAT solely on the issue that there is no mandatory requirement to have affiliation of the school from CBSE or Directorate of Education. In this regard, ld. AR submitted that assessee is running a primary school and the assessee was not entitled to be characterised as an educational institution. In this regard, he relied on the decision of Hon’ble jurisdictional High Court in the case of Delhi Music Society vs. Director General of Income- tax (2013) 357 ITR 265 (Delhi).
On the other hand, ld. DR of the Revenue relied on the findings of the ld. CIT(E).
Considered the rival submissions and material placed on record. We observe that this issue is squarely covered by the decision of Hon’ble Delhi High Court in the case of Delhi Music Society (supra) wherein the Hon’ble High Court held as under :- “Section 10(23C) of the Income-tax Act, 1961 - Educational institutions - Assessment year 2010-2011 - Petitioner-society was engaged in teaching all forms of music and dance with no profit motive - As its gross receipts exceeded Rs. 1 crore, it moved an application under section 10(23C){vi) before prescribed authority for grant of approval as an educational institution - Whether since assessee was being run like a school or educational institution in a systematic manner with regular classes, vacations, attendance requirements, enforcement of discipline and so on, it was to be held that it was imparting 'education' - Held, yes - Whether fact that petitioner-society was not recognized by any university or Board or fact that it was not awarding its own degrees or certificates was of no relevance for deciding an application under section 10(23C)(vi) - Held, yes - Whether, therefore, petitioner met requirements of being an 'educational institution' within meaning of section 10(23C)(vi) and could not be denied approval under said section - Held, yes” “….
For the above reasons, we are satisfied that the petitioner meets the requirements of an educational institution within the meaning of Section 10(23)(c)(vi) of the Act. The prescribed authority, in our view, has not taken into consideration the relevant factors in coming to the conclusion that the petitioner is not entitled to the approval as "educational institution". His understanding of Supreme Court in the case of Sole Trustee, Loka Shikshana Trust (supra) seems to us to be flawed. It also appears to us that the prescribed authority has not examined and appreciated properly the nature of activities of the petitioner-school and the rules and regulations governing those activities.
We accordingly, quash the order dated 27th September, 2010 passed by the prescribed authority. The prescribed authority will now deal with the assessee's application for approval afresh in accordance with law in the light of the observations made by us above. The writ petition is accordingly allowed with no order as to costs.”
Respectfully following the same, we quash the impugned order and the direct the ld. CIT (E) to deal with the assessee’s application for approval fresh in accordance with law in the light of the observations made in the aforesaid judgment of Hon’ble jurisdictional High Court.
In the result, the appeal filed by the assessee is allowed as indicated above. Order pronounced in the open court on this 26th day November, 2025.