TaxTMI 
TaxTMI 
2026 (5) TMI 460
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....eing an old Society which was granted to it. As contemplated in the Scheme, assessee has to get renewed this registration which will be granted as a regular registration u/s 12A(1)(ac)(ii) of the Income Tax Act. Accordingly, assessee has filed an application in Form No. 10AB. The ld. CIT (E) has rejected this application of the assessee. It is also pertinent to note that assessee Trust was granted registration u/s 12A(1)(ac)(i) of the Income Tax Act on 24.09.2021 for assessment year 2022-23 to assessment year 2026-27. When this registration was going to expire, assessee has filed a fresh application for grant of renewal u/s 12A(1)(ac)(ii). As observed earlier, assessee Society came into existence on 11.05.2005 and started running a school from 2006. 4. Before we embark upon an enquiry on the facts and circumstances for denial of registration u/s 12A(1)(ac)(ii) in the case of the appellant, we deem it appropriate to take note of the relevant provisions contemplating the procedure required to be followed for grant of registration as well as cancellation of registration. 5. We have duly considered the rival contentions and gone through the record carefully. Section 12A(1)(ac) an....
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....ability of sub-clause (iv) or subclause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of Section 10, or Section 11 or Section 12, for any previous year ending on or before the date of such application, at any time after the commencement of such activities and such trust or institution is registered under Section 12AB;] x x x 12AB. [Procedure for fresh registration. 12AB. (1) The Principal Commissioner or Commissioner, on receipt of an application made under clause (ac) of subsection (1) of section 12A, shall,- (a) where the application is made under sub-clause (i) of the said clause, pass an order in writing registering the trust or institution for a period of five years; (b)where the application is made under sub-clause (ii) or sub-clause (iii) or sub-clause (iv) or sub-clause (v) or item (B) of sub-clause (vi) of the said clause,- (i) call for such documents or information from the trust or institution or make such inquiries as he thinks necessary in order to satisfy himself about- (A) the genuineness of activities of the trust or institution; and (B) the compliance of such requirements ....
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.... the said period. Registration u/s 12AB has been contemplated under the new Scheme w.e.f. 01.04.2021. Similarly, a new Trust which has come into existence after 01.04.2021 and has applied for registration, which was granted provisionally registration, would require to apply for a regular registration which will be granted u/s 12A(1)(ac)(iii) for a period of five years. There is no dispute in the present case that assessees have applied for grant of regular registration u/s 12A(1)(ac)(ii) of the Act. 7. Section 12AB of the Act further provides the procedure for grant of the fresh registration. A perusal of the above provision would indicate that if an application is being made under sub-clause (1) of Section 12A(1)(ac), then ld. Pr. Commissioner or the Commissioner would pass an order in writing registering the Trust or Institution for a period of five years but where application is being made for grant of registration u/s 12A(1)(ac) sub-clause (ii) to (vi), then ld. Commissioner would call for such documents or information from the Trust or Institution or make such enquiry as he thinks necessary in order to satisfy himself about ; a) The genuineness of activities of the....
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....able opportunity of being heard, for such previous year and all subsequent previous years, if he is satisfied that one or more specified violations have taken place; (iii) pass an order in writing, refusing to cancel the registration of such trust or institution, if he is not satisfied about the occurrence of one or more specified violations; (iv) forward a copy of the order under clause (ii) or clause (iii), as the case may be, to the Assessing Officer and such trust or institution. Explanation.-For the purposes of this sub-section, the following shall mean "specified violation",- (a) where any income derived from property held under trust, wholly or in part for charitable or religious purposes, has been applied, other than for the objects of the trust or institution; or (b) the trust or institution has income from profits and gains of business which is not incidental to the attainment of its objectives or separate books of account are not maintained by such trust or institution in respect of the business which is incidental to the attainment of its objectives; or (c) the trust or institution has applied any part of its income ....
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.... religious in nature and such income has been applied other than for the objects of the Trust, meaning thereby, if income is not being applied for the objects of the Trust, then it would be construed a 'specified violation' on whose fulfilment, registration can be cancelled. The second condition is, the Trust or Institution has income from profits and gains of a business which is not incidental to attainment of its objects but separate books are not being maintained. For example, Hon'ble Gujrat High Court in the case of Sabarmati Gaushala has held that object of the Society was to develop the breed but any income earned by the Society from sale of semen was only incidental qua the main object of developing the breeds of the milking cows. If there is no incidental income, then assessee is required to maintain separate books of account and if assessee failed in maintaining such books then this would be a 'specified violation'. 8.2 The next 'specified violation' under clause (c) is that if any part of income is applied from the property, held under a Trust for profit on religious purpose which does not exist for the benefit of public at large, then such a situation would be a '....
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....26 / 1085316967 (1), we respectfully submit that a detailed reply along with the requisite documents was already filed on 16.02.2026. However, in continuation of the said submission, the assessee hereby wishes to further clarify and elaborate upon the information sought in the notice to ensure complete and proper compliance. Site (Sector 66 beta Block) Mohali - 6,57,73,894 The site was allotted through auction process by the Estate Officer, GMADA Mohali. Further to the earlier submission in respect of Site, the assessee respectfully submits an additional factual clarification for your kind consideration. Subsequent to the acquisition of the said site, a liquor shop was opened in the immediate vicinity of the property. The Society, being an educational institution committed to maintaining a safe, disciplined and morally appropriate environment for students, made sincere and bona fide efforts to have the said liquor shop relocated/closed by approaching the concerned authorities. However, despite best efforts, the same could not be achieved. The photograph of liquor shop is attached alongwith this reply. Considering that the existence of a liquor shop adjace....
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....unds, including accumulation from prior years. No loans or borrowings were availed for these transactions. The educational site was acquired with the primary objective of expanding the Society's educational infrastructure, in furtherance of its main educational objects. However, due to insufficiency of funds at the relevant time, the Society requested M/s Human Enterprise to cancel the said agreement to sell, and the funds received from this cancellation were subsequently utilized for the acquisition of educational Site 2, 3282. This step was undertaken to ensure that the Society could at least acquire one piece of site to commence the construction of educational site at the earliest. Eco-City school site measuring 4.02 acre. The Society participated in the auction conducted by GMADA for the said school site at Mullanpur, Eco-city, New Chandigarh. The Society participated with the objective of acquiring school site for running senior secondary school. As per the latest GMADA guidelines, the schools can only operate through the designated sites allotted/auctioned by GMADA. Therefore, the society does not have had any option except to purchase the desig....
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.... We have been apprised about Rule 17A sub-rule (e) which contemplates as under : "Where the Trust or Institution has been in existence during any year or years prior to the financial year in which the application for registration is made, self-certified copies of the Annual Accounts of the Trust or Institution relating to such prior year or years (not being more than three years immediately preceding in the year in which the said application is made for which such accounts have been made up." 10.2 A perusal of this Rule would indicate that ld. CIT (E) would look into accounts of three years immediately preceding to the filing of the application. The ld. counsel for the assessee submitted that a scrutiny assessment has undergone for assessment year 2023-24 and all these aspects have been examined by the AO. In other words, the AO has duly confronted the assessee to explain its stand for the investment made in various lands. Copy of this order dated 05.12.2025 is available on page No. 88 to 99 of the Paper Book. The ld. counsel for the assessee specifically took us through paragraph 9, internal page 3 of the assessment order till page 8 of the assessment order. A perusal ....
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....ed doubts about the decision of the assessee which was conducive in achievement of its objectives. 12. The next reason assigned by the ld. CIT(E) is regarding educational site No. 2 and educational site No. 3. The assessee first thought of purchasing both but later on cancelled one and purchased site No.2. But ld. CIT (E) has unnecessarily made reference to it on which site No. 3 was agreed to be purchased and cancelled without construing these transactions in right perspective. The ld. CIT (E) has just raised suspicion and left those suspicions without conclusion, rather drew adverse inference without any basis. The assessee has duly explained all these five transactions that under what circumstances, it has to change decision for acquiring a fresh site. Money received has duly been invested in the fresh site. In the scrutiny assessment for assessment year 2023-24, the AO has duly considered these transactions and did not find any irregularity in it. He accepted them. How the ld. CIT (E) could reappreciate those transactions in a summary manner and raise suspicions about the activities of the assessee which is not discernable. 12.1 It is observed that Section 2(15) of the In....
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....een fixed on 04/02/2026 at 11:00 AM in my office. You are not required to attend personally. Filing of the reply/ documents on the portal or the mail would suffice. Please refer to your application filed in Form 10AB for registration u/s 12AB in this office. 1. After perusal of the audited financial statements for the relevant assessment years, it is observed that the applicant has been engaged in purchase and sale of land from Assessment Year 2023-24 onwards. The details are tabulated as under:In this regard, the applicant is required to furnish the following details and documentary evidence: AY 2023-24 AY 2024-25 Existing Land Site IT City Mohali 6,57,73,894 Plot Aerocity 10,61,65,313 Addition Site 2 Event 3282- 13,56,53,074 Site 2 Event 3282 10,58,46,926 Site 2 Event 3282- 9,70,00,000 Site 3 9,72,20,813 Event- Salı Plot Aerocity Advance against Site 2 Event 3282 10,58,46,926 Site 2 Event 3282- 13,56,53,074 Note: If digitally signed, the date of digital signature may be taken as date of document. ROOM NO:1,5th floor, C R BUILDING, HIMALAYA MARG, SECTOR 17 - E, CHANDIGARH, CHANDIGARH, Chandigarh (UT), 160017 Email: CHANDIGARH.CIT.EXMP....