2025 (11) TMI 805

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....ppeal before us. First, we take up assessee's registration application u/s 12A(1)(ac)(iii) which is subject matter of ITA No.635/Chandi/2025. ITA No.635/Chandi/2025 2.1 The assessee filed Form No.10AB and sought registration u/s 12A(1)(ac)(iii). The assessee was holding provisional registration for AYs 2024-25 to 2026-27. Upon receipt of assessee's application, a detailed notice was issued by Ld. CIT(E) to the assessee on 10-01-2025 calling for various documents / information. The assessee furnished reply on 14-01-2025. It transpired that the assessee-trust was formed on 04-12-2023 and it was holding provisional registration for AYs 2024-25 to 2026-27. It commenced its activities on 14-06-2024. The assessee expanded certain amount on ....

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....e 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....

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....ided 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 3. At the outset, it would be imperative to note down the main objects of the ass....

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....ould 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 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 enti....