TaxTMI 
TaxTMI 
2026 (6) TMI 411
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....u/s 80G of the Income Tax Act on account of nongenuineness of activities and benefit to interested persons. 2. At the outset, the ld. Counsel for the assessee has submitted that the appellant trust was incorporated in the year 2020 and started its activities in the financial year 2023-24. The Ld. Counsel submitted that at the stage of registration, the Ld. CIT(E) is not required to examine the genuineness of activities. The AR submitted that the detailed submissions were filed before the Ld. CIT(E) vide its letter dated 11.07.2024 elaborately mentioning the details of activities of the trust. The Ld. AR submitted that the appellant has filed the copy of the trust deed listing the objects of the trust such as education, medical relief, pr....
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....t failed to rebut the objections of the Ld. CIT(E) raised vide point no. 3 of its show cause notice dated 03.09.2024, where the relevant query of the show cause notice read as under: 1. As evident from the bank statement, on various dates various payments are made to persons covered u/s 13(3). 4. The Ld. CIT DR argued that the appellant trust has contravened provision of Section 13(3) of the Act and that it is functioning for profit earning purpose other than charitable purpose. He pleaded that the impugned order may be upheld. 5. Having heard both the sides and perusal of material on record, we find that the appellant trust although has furnished the details of the payment made to the person u/s 13(3) as salary payment for t....
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....itable activity. The Ld. CIT DR contended that the Ld. CIT(E) was justified in rejecting the claim of the registration u/s 12AB on the ground of non-genuineness of activities and consequential rejection of application for approval u/s 80G of the Act. 7. Admittedly, the trust was incorporated in the year 2020 and the activities were started in the financial year 2023-24 as explained by the Ld. AR for the appellant trust. The argument of the Ld. AR that activities are not required to be examined by the Ld. CIT(E) at the stage of granting registration is not relevant in the present case because the appellant trust has already carrying out its activities during the financial year 2023-24 and the application for registration in Form 10AB seek....
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....ing depreciation which is 25% of total receipts. The Ld. CIT(E) has observed that the applicant has received enormous markup on the 1st year of educational activities undertaken. Meaning thereby, that the appellant has been carrying on medical activities on commercial basis for earning business income and, therefore, Ld. CIT(E) has rightly observed that the trust is doing activities of profitable in nature the purpose other than the charitable purpose, and such medical education cannot be said by any stretch of imagination to be in the nature of activities for charitable purposes. 9. The Ld. CIT(E) has placed reliance on the judgment delivered by the Apex Court in the case of Baba Banda Singh Education Trust and M/s New Noble Education S....