TaxTMI 
TaxTMI 
2026 (8) TMI 1255
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....ns), Mumbai (hereinafter referred to as "CIT(E)") has erred in passing the order u/s. 12AB of the Income Tax Act 1961, which is illegal and bad in law. 2. The CIT(E) has erred in rejecting the application made by the appellant for renewal of registration u/s. 12AB of the Act on the ground that various activities of the appellant are commercial in nature and are in violation of proviso to S. 2(15) of the Act. 3. The CIT(E) has erred in not appreciating that activities like conducting Yoga, meditation, spiritual course in ancient vedas, publication of devotional books, providing satvik food, maintaining gaushala, training and livelihood support for farmers, women and rural community, providing temporary accommodation to spiritual seekers etc. are neither commercial activities nor are hit by proviso to S. 2(15) of the Act. 4. The CIT(E) has erred in holding that the receipts from commercial activities are more than 20 percent of the total receipts in each of the three previous years. The CIT(E) has erred in holding that the appellant has underreported receipts from various activities and the same is specified violation as per explanation (g) to section 12AB(....
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....its activities. It is also registered under FCRA (registration renewed by the Ministry of Home Affairs vide approval dated 15.05.2025 with registration no. 083780436 with nature 'social') and under the Companies Act, 2013 for CSR activities with registration no. CSR00005241, issued by Ministry of Corporate Affairs. It is also registered under The Societies Registration Act, 1860 vide Registration No. F-2179 (BOM). ISKCON has been engaged in charitable activities across India for more than five decades through its centres which are now more than 270 in number. 3.1. Assessee carries on extensive charitable activities rooted in the traditional Indian model of social welfare deeply embedded in Indian civilizational ethos, integrates free food distribution, education, healthcare, environmental sustainability and value-based social upliftment into a unified and holistic framework of public service. These centres also provide satvik vegetarian food through "Govinda's," which is its prasadam-distribution facility and offer Dharamshala / pilgrim accommodation at key, cultural and important destinations. Further, several major centres maintain utility facilities within the premises, provi....
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....head "Income from incidental activities" shall not be considered as receipts from activities of a commercial nature, within the meaning of Proviso to Section 2(15); thereby rendering such activities as non-charitable. [emphasis supplied by us by bold] 3.4. In its submission dated 25.03.2026, assessee stated, inter alia, that all its activities are charitable and religious in nature, falling squarely within the statutory definition of "charitable purpose" as defined in section 2(15) and that none of its activities or projects fall within the ambit of "advancement of any other object of general public utility." On the specific income streams identified by the ld. CIT(E), assessee submitted that: (a) receipts under the head "Sponsorships" represent voluntary contributions from corporates and philanthropic entities towards large-scale charitable activities and are not made in consideration of any commercial service; (b) Broadcasting and Royalty income arises from dissemination of spiritual discourses and educational content, integral to the Society's charitable objectives; and (c) Farm, Agriculture and Other Income arises from farm operations ....
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....sed revenue-generating activity and held that assessee failed to furnish documentary evidence that such receipts are purely voluntary donations devoid of any commercial element. 4.3. On Broadcasting and Royalty income, ld. CIT(E) held that generation of income through digital platforms, licensing and royalty inherently involves systematic commercial exploitation of content and such activities are carried out in a structured and organised manner with revenue generation as an outcome. He further held that sale of goods, books, articles, food items, for consideration constitutes a trading activity irrespective of its religious or cultural context. Maintenance of separate books of account for these activities was treated as additional evidence of their revenue-generating commercial character. The claim of "cost recovery" was held to require documentary evidence demonstrating absence of profit motive despite all the details already placed on record. 4.4. On the question of farm and agricultural income, ld. CIT(E) held on similar grounds that sale of surplus produce and organised farm operations indicate systematic economic activity and that the scale and integration of such activi....
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....med the second independent ground for rejection of the application for registration filed by the assessee. 4.8. Ld. CIT(E) accordingly concluded that the application for renewal of registration u/s. 12AB filed by the assessee is not allowable and thus rejected the same on two grounds: (a) the actual activities of the Trust "over the years" are not towards "charitable purpose" as per the proviso to section 2(15); and (b) there is a specified violation as per Explanation (g) to section 12AB(4) of the Act. 4.9. Aggrieved by the said order, assessee is in appeal before the Tribunal. 5. Ld. Counsel for the assessee CA Vijay Mehta along with CA Rakesh Joshi submitted that the impugned order is fundamentally erroneous both on law and on facts and must be set aside on multiple independent grounds, which are addressed in sequence hereunder. 6. The primary and threshold submission was that the ld. CIT(E) has committed a jurisdictional error by considering the impugned registration proceedings as assessment proceedings by examining application of income, quantum of receipts, activity wise profitability which are matters for the Assessing Officer at the stage of a....
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....ified in the proviso to section 2(15) of the Act. The jurisdiction to cancel the registration only arises if there is change in the nature of activities of the institution or the activities of the institution, are not genuine. The aforesaid Circular by placing reliance upon section 13(8) of the Act inter alia provides that the registration granted to the trust would continue even when the receipts on account of business is in excess of Rs. 25 lakhs. In such case, the Assessing Officer while framing the assessment for the subject assessment year would be entitled to deny the benefit of exemption to such a trust for that year." 6.4. On the above, even the judgment of Goa Industrial Development Corporation [2020] 421 ITR 676 (Bom) observed on similar lines in placitum 27 which is extracted below which in turn referred to its decision of Khar Gymkhana (supra): "We also add that Circular No. 21 of 2016 also, supports the contentions of Mr. Vaidya, inasmuch as it reiterates that the process of cancellation of registration has to be initiated strictly in accordance with the provisions under section 12AA(3) and after carefully examining the application of the said provisions. T....
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.... counselling, successfully implemented projects on rural development, raising awareness against fatal diseases, organic farming, skill development and women empowerment, working towards animal welfare like protecting and serving cows and providing them safe living condition." 7. It is also strongly submitted that ld. CIT(E) has committed a jurisdictional error by misclassifying ISKCON's activities under the residuary limb of section 2(15), i.e., "advancement of any other object of general public utility." Ld. Counsel submitted that ISKCON's activities squarely and independently fall under at least five specific named limbs of section 2(15), viz.: (a) relief of the poor, (b) education, (c) yoga, (d) medical relief, and (e) preservation of environment. 7.1. The proviso to section 2(15) is, in its terms, applicable only to the residual limb. If any of the specific named limbs is attracted, the proviso simply has no application. Ld. CIT(E) never considered this primary aspect but proceeded directly to examine the nature of three income streams without first recording a finding as to which limb of section 2(15) governs ISKCON. ....
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....le of housing and income by way of lease rent, tenancy deposits, etc. Based on that a show-cause notice was issued to the assessee and the assessee pointed out how its activities are in furtherance of the Maharashtra Housing and Area Development Act, 1976. It has no profit motive, far from indulging in any trade or commerce and as far as the activities alleged or the income generated, what has been pointed out is that MHADA gives houses to middle class families at affordable rents. The income is on account of sale of housing stock and which is erroneously termed, according to MHADA, as coming from a systematic commerce and business activities." 8. On the specific activities falling under each named limb of section 2(15), ld. Counsel provided the following comprehensive factual matrix with supporting financial data, which is presented activity-wise hereunder: a) Relief of the poor: ISKCON distributes approximately 1.50 lakh free meals across India every single day without any discrimination of caste, creed or religion, through its 270+ centres. Total direct expenditure on free meals during FY 2023-24 alone was Rs. 124.61 crore, without including indirect and administrati....
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.... activities as falling squarely within the statutory limb of "yoga" in section 2(15). It was pointed out that recently, on 21.06.2026, ISKCON actively participated in the International Day of Yoga event at Kolkata attended by the Hon'ble Prime Minister. d) Medical relief: ISKCON undertakes medical relief through de-addiction programmes, medical camps, ayurvedic clinics, children's health camps and counselling. It has entered into a MoU with the Department of Social Justice & Empowerment, Government of India under the Nasha Mukt Bharat Abhiyaan and a MoU with the Narcotics Control Bureau, Ministry of Home Affairs, dated 02.12.2024, "Mission Spandan", for combating substance abuse through awareness, education and spiritual empowerment. ISKCON holds a Guinness World Record for gathering 8,813 youths to take anti-addiction pledges in 24 hours at the UDGAAR 2025 mega youth festival. e) Preservation of environment: ISKCON operates more than 100 goshalas across the country for protection and rehabilitation of abandoned, aged and infirm cattle, incurring direct expenditure of Rs. 12.47 crore in FY 2023-24 on goshala maintenance alone. ISKCON Govardhan Eco Village ....
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....rces 12 2017 UNWTO Eco-tourism as a catalyst for rural development 13 2017 UNESCO, Ministry of Water Resources & ASSOCHAM Best water NGO, water education 14 2019 Energy Globe Foundation Integrated water conservation and protection 15 2021 Maharashtra Energy Development Agency (MEDA) Ecological conservation 16 2024 Union Ministry of Jal Shakti, GoI Jal Prahari Samman, water conservation b) ISKCON also holds accreditations from UNEP, UNECOSOC and UNCCD, and has received the IGBC Green Village Platinum Rating (2017), GRIHA Performance Award 2020, UNWTO Award and WTM Responsible Tourism Award. At the 9th Dalmia Bharat CSRBOX CSR Impact Awards 2023, ISKCON was recognised for exceptional work in ecological conservation, organic farming, waste management and sustainable tribal development. c) Collaborations and MoUs, Government Recognition of Charitable Character MoU / Collaboration Details and Purpose MoU with DBSKKV (2021) Dr. Balasaheb Sawant Kokan Krishi Vidhyapeeth, agricultural reforms and farming practices in Palghar district, Maharashtra MoU with NSDC (April 2024) ....
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..... Working furnished by the assessee is as under for which references were made during the course of hearing before us to the relevant financial data reported in its audited financial statements placed on record: Activity Gross Receipts (Rs. Cr.) FY 2023-24 Direct Expenditure (Rs. Cr.) FY 2023-24 Net Surplus on Direct Cost Basis Remarks Govinda's Food Outlets 197.15 178.88 18.27 ~10.2% on direct cost only; nil or negative after common cost allocation Accommodation 54.74 53.54 1.20 ~2.2% on direct cost only Books 98.26 79.26 19.00 Direct cost basis; nil after common cost allocation Free Food (charitable, no receipts) Nil 124.61 N/A Pure charitable expenditure Education (charitable, no receipts) Nil 22.29 N/A Pure charitable expenditure Goshalas (charitable, no receipts) Nil 12.47 N/A Pure charitable expenditure 11. On the charge of "specified violation" under Explanation (g) to section 12AB(4), ld. Counsel submitted that assessee had furnished its audited financial statements for the preceding three years at the time of filing the application on 30.09.2025 itself, as ....
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.... accepted in past scrutiny assessments, the Revenue cannot take a contrary position without placing cogent material to justify the departure. 14. Per-contra, ld. DR supported the impugned order and made three submissions. First, that the ld. CIT(E) has rightly exercised jurisdiction u/s. 12AB and 80G(5) by examining not merely the stated objects of the assessee but the actual nature, genuineness and manner in which its activities are carried on. Second, that the assessee is engaged in numerous systematic and organised revenue-generating activities. Third, that the assessee's characterisation of these receipts as charitable or religious cannot be accepted merely on the basis of nomenclature. Ld. DR accordingly submitted that both the appeals be dismissed. 15. We have heard both the parties and perused the material on record. We have also given our thoughtful consideration to the submissions made as well as the judicial precedents referred before us. We have also gone through the paper books placed on record by the assessee. Before we delve on the issues raised in these appeals, we place on record our appreciation, both for the ld. Counsels for the assessee and the ld. DR f....
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....emphasis supplied by us by bold] 16.1. On a careful reading of the above provision, the following position emerges with unmistakable clarity. Section 2(15) classifies "charitable purpose" into seven categories. Six of them are specific named limbs, relief of the poor, education, yoga, medical relief, preservation of environment, and preservation of monuments. The seventh and last is the residual category, "advancement of any other object of general public utility." The proviso, in its terms, applies only and exclusively to this last, residual category. The proviso begins with the words "the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business." The proviso is inextricably linked to, and moves in tandem with, the residual limb. It cannot and does not travel to the first six specific named limbs. An institution whose dominant purpose falls under any one of the first six named limbs is, by the scheme of the statute itself, outside the scope of the proviso. 16.2. CBDT Circular No. 11/2008 dated 19.12.2008, issued in explanation of the proviso introdu....
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.... achieving its objects; (ii) after satisfying himself about the objects of the trust or institution and the genuineness of its activities under item (A) and compliance of the requirements under item (B), of sub-clause (i),- (A) pass an order in writing registering the trust or institution for a period of five years; or (B) if he is not so satisfied, pass an order in writing,-- (I) in a case referred to in sub-clause (ii) or sub-clause (iii) or sub-clause (v) of clause (ac) of sub-section (1) of section 12A rejecting such application and also cancelling its registration; (II) in a case referred to in sub-clause (iv) or in item (B) of sub-clause (vi) of sub-section (1) of section 12A, rejecting such application, after affording a reasonable opportunity of being heard; (c) where the application is made under item (A) of sub-clause (vi) of the said clause or the application is made under sub-clause (vi) of the said clause, as it stood immediately before its amendment vide the Finance Act, 2023, pass an order in writing provisionally registering the trust or institution for a period of three years from the assessment year from which ....
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....t receipts? None of these are "objects" questions. None are "genuineness" questions. They are assessment questions, squarely within the domain of the ld. Assessing Officer, to be examined when the trust or institution claims exemption under section 11 on its income for each year. 17.3. The Act has a carefully calibrated two-stage statutory architecture for charitable institutions. At the first stage, viz., registration under section 12AB, ld. CIT(E) performs a threshold gatekeeping function. The question is whether this institution is, in principle, a charitable one and whether it is genuinely doing charitable work. These are binary questions directed at eligibility. At the second stage, viz., assessment under section 11, ld. Assessing Officer performs a year-on-year monitoring and compliance function. Has the income been applied for charitable purposes? Has any accumulation exceeded the permissible limit? Have the conditions for exemption been satisfied in that particular financial year? These are quantitative and compliance questions directed at annual entitlement. 17.4. The two stages operate at fundamentally different levels of this statutory scheme. Registration is about....
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....ation of accounting methodology and financial statement presentation is an exercise that falls squarely within the competence of the ld. Assessing Officer at the time of assessment, not the ld. CIT(E) at the time of registration. (v) Whether income has been applied towards charitable objects. The entire thrust of the analysis in the impugned order is directed at establishing that the receipts from the three income streams are retained as "commercial surplus" rather than applied for charitable purposes. Monitoring of application of income is the function of the ld. Assessing Officer under section 11 at the assessment stage. It has no place in a registration proceeding under section 12AB. 17.6. The correct statutory test at the registration stage is: does ISKCON's work consist of genuine charitable activities? The answer, on the undisputed facts that the ld. CIT(E) has either accepted or not disputed in the impugned order, is unambiguous. ISKCON has been registered as a charitable institution since the 1970s. It operates through 270+ centres across India. It distributes 1.50 lakh free meals daily without any discrimination of caste, creed or religion. It runs Ministry....
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....on the charges levied by a charitable institution for its services, any cap on its receipts or any particular model of service delivery as a condition for registration under section 12AB. The decisive considerations at the registration stage are whether the institution is genuinely engaged in the relevant charitable activity, whether its activities are carried out in furtherance of its objects and whether its income and resources remain devoted to such charitable objects. Ld. CIT(E), while examining an application for renewal of registration, cannot step into the position of the ld. Assessing Officer and pronounce upon the conditions of exemption under section 11 in advance of the assessment. 17.10. There is a further and pointed indication of how far the ld. CIT(E) has strayed from the statutory boundary. The impugned order in para 8 describes ISKCON's activities as not being towards "charitable purposes" when viewed "over the years." A registration proceeding is not a proceeding "over the years." The ld. Assessing Officer examines activities "for the year"; that is the ld. Assessing Officer's jurisdiction. Ld. CIT(E) examines activities as they currently stand; that is....
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....ncial tabulation for each activity has been set out in paragraphs above, which also incorporates the full listing of recognitions and awards, collaborations and MoUs entered into with Government of India ministries, and world records achieved by ISKCON. Rather than repeating those details here, we in reference to the above paragraphs record the following findings on each limb summarily. It is imperative that before we take up each of the primary limb of activities, for the sake of convenience, the entire expenditure incurred by the assessee trust for last 3 years is taken note of, giving holistic view of the gamut of charitable activities undertaken by it and the funds deployed thereon which is summarized as under: Rs. In Crores STATEMENT SHOWING HEADWISE EXPENDITURE AS A % OF TOTAL EXPENDITURE FOR FY 2022-23 TO FY 2024-25 Expenditure FY 2022-23 % FY 2023-24 % FY 2024-25 % Total For 3 years % Direct Expenses on the Objects of the Trust Propagation of Yoga 227.91 49.43 273.01 50.69 376.50 53.24 877.42 51.40 Religious Objects 24.02 5.....
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....bsp; Total Rs. 1,246,063,635 b) Education: ISKCON operates three board-affiliated schools with combined enrolment of 1,550+ students and is establishing a university on 75 acres at Vrindavan. More than 30 lakh students from 6,700+ schools have participated in ISKCON's educational programmes. Book distribution is at no-profit-no-loss. Total education expenditure in FY 2023-24 was Rs. 22.29 crore. These activities squarely fall under "education." c) Yoga: The ISKCON Govardhan School of Yoga is formally accredited by the Ministry of AYUSH through the Yoga Certification Board (YCB). More than 4,000 yoga teachers and 35,000 students have been trained. The ld. CIT(E) has not referred to this governmental accreditation anywhere in the impugned order. ISKCON's yoga activities squarely fall under the specific named limb of "yoga." d) Medical relief: ISKCON's formal MoUs with the Ministry of Home Affairs (Narcotics Control Bureau, Mission Spandan, 02.12.2024) and with the Department of Social Justice & Empowerment (NMBA) for de-addiction work are direct governmental partnerships for medical and social welfare. These activities fall under "medical ....
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.... organised manner, does not lead to the inference that it has embarked upon a commercial venture. 18.5. We further note that neither the ld. Assessing Officer nor the ld. CIT(E) has recorded any finding that ISKCON has abandoned its charitable objects, diverted its funds for private gain, or undertaken any activity alien to the purposes for which it was constituted. The entire foundation of the impugned order rests upon the characterisation of three income streams, without any deliberation on ISKCON's objects, which are admitted to be charitable, or the application of income, which is directed towards charitable purposes. The magnitude of receipts and the organised manner of the activity cannot alter the intrinsic character of an institution whose objects are charitable and whose income is applied towards charitable purposes. This is not a case of a charitable entity masking commercial activity behind a charitable facade; it is a case of a manifestly charitable entity generating resources through ancillary activities in the course of discharging its charitable mission. 18.6. There is also a fundamental distinction between an activity undertaken for earning profit and an a....
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.... utility" as is included in the fourth limb of the current definition of "charitable purpose". Such a claim, when made in respect of an activity carried out on commercial lines, is contrary to the intention of the provision." 18.8.1. It also referred to the Speech of the Hon'ble Minister of Finance, relevant extract are as under: "180. 'Charitable purpose' includes relief of the poor, education, medical relief and any other object of general public utility. These activities are tax exempt, as they should be. However, some entities carrying on regular trade, commerce or business or providing services in relation to any trade commerce or business and earning income have sought to claim that their purpose would also fall under 'charitable purpose'. Obviously, this way not the intention of Parliament and, hence, I propose to amend the law to exclude the aforesaid cases. Genuine charitable organizations will not in any way be affected." [emphasis supplied by us by bold] 18.8.2. Also, reference is made to the reply of Hon'ble Finance Minister to the Debate in the Lok Sabha on the Finance Bill, 2008, wherefrom relevant portion is extracted f....
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....dering of any service in relation to any trade, commerce or business, then it would not be entitled to claim its object to be a 'charitable purpose'. On the flip side, where an institution is not driven primarily by a desire or motive to earn profits, but to do charity through the advancement of an object of general public utility, it cannot but be regarded as an institution established for charitable purposes." [emphasis supplied by us by bold] 18.8. Keeping the above detailed exposition on the issue in juxtaposition, we find that rejection of ISKCON's application for renewal of registration u/s. 12AB on the ground of violation of the proviso to section 2(15) is not sustainable. 19. Without prejudice to and in addition to the foregoing, and to address ld. CIT(E)'s specific observations on each of the three challenged income streams, details of receipts for the relevant years are tabulated below. For each of the three streams considered by the ld. CIT(E), we note the following: Particulars 2022-23 2023-24 2024-25 Total donations 700,97,11,477 856,25,04,139 1030,64,00,285 Total receipts 11,47,51,33,035 14,32,19,67,964 ....
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....2022-23 Animesh Pathak Free Food Distribution at Rathyatra Festival 500,000 2022-23 State Bank of India Free Food Distribution at Rathyatra Festival 300,000 2022-23 Emami Ltd Free Food Distribution at Rathyatra Festival 500,000 2022-23 J G Hosiery Pvt Ltd Free Food Distribution at Rathyatra Festival 300,000 19.2. Broadcasting and Royalty: As per the table above, total broadcasting and royalty receipts for the last three years amount to Rs. 40,03,415/-, which is negligible (approximately 0.009% of the total gross receipts). These receipts arise from limited permissions granted to television and DTH service providers to broadcast live feeds activities of our institution. Dissemination of teachings of Bhagavad Gita and Srimad Bhagavatam through audio-visual and digital media is not commercial exploitation of content. Bhagavad Gita, which expounds the universal philosophy of selfless action, renunciation of attachment, ethical duty and spiritual self-realisation through its eighteen chapters, is universally acknowledged as one of the greatest philosophical and ethical treatises available to mankind. Its teachings, including the principle ....
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....er Income 456,292 22,611,000 277,932 Spiritual Tour Other Income 114,023,006 24,447,578 17,578,961 Museum and show Other Income 26,850,714 27,638,772 22,815,245 Puja Bhoga Thali Other Income 12,000,884 7,204,392 2,987,084 Sale of Shares & Securiries Other Income 10,542,400 - - Parking Fee Other Income 9,373,408 1,696,550 1,503,900 Yoga Other Income 10,863,652 76,853,399 4,640,551 Auditorium & Exhibition Other Income 6,964,442 9,599,759 197,724 Educational Seminar Other Income 642,729 2,714,047 19,271,576 Insurance Claim Other Income 19,330,006 Land Compensation Other Income 4,314,280 9,969,040 Income from Food Items Other Income 22,175,352 14,656,414 - Interest on Income tax refund and other interest Other Income 5,883,555 14,610,011 15,397,914 Youtube Income Other Income 2,388,307 - - Shoe Stand and Mobile safe deposits 1,681,662 7,185,290 - Sale of Scrap Other Income 2,063,497 736,534 1,215,633 Recovery of Expenses (Foo....
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....o loss or at a loss. The factual data in this regard is extracted below: Details of rates of 'thali' at Govinda's Prasadam facility at various centres Sr. No. Center location Type of thali Rs. 1. Bhubaneshwar Limited Thali 150 2. Bhubaneshwar Limited Thali 200 3. Bhubaneshwar Limited Thali 170 4. Jaipur Limited Thali 200 5. Jaipur Limited Thali 250 6. Mayapur Limited Thali 350 7. Mayapur Limited Thali 90 8. Mayapur Limited Thali 70 9. Mayapur Limited Thali 60 10. Mayapur Limited Thali - Breakfast 50 11. Mira Road Mini Meal 150 12. Mira Road Limited Thali 225 13. Mira Road Limited Thali 350 14. Mira Road Unlimited Buffet Thali 350 15. Mumbai Juhu Limited Thali 120 16. Mumbai Juhu Unlimited Thali 650 17. Chennai Limited Thali 390 18. Chennai Limited Thali 300 19. Hyderabad Limited Thali 300 20. Hyderabad Mini Thali 100 21. Hyderabad Thali 250 22. Pune Nvcc Limited Thali 110 23. Ra....
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....7 5 Collection from Pilgrims for Dharamshala 547,463,861 Less: Direct expenses before allocation of common cost (535,410,364) 12,053,497 6 School activity Income 135,070,504 7 Ayurvedic Clinic 28,819,904 Less: Direct expenses before allocation of common cost (28,238,869) 581,035 Total (Rs.) 327,490,323 19.4.3. The accommodation maintained at more than 35 centres is invariably situated in the premises of the centres, with visitors having access to yoga programmes, educational programmes and other cultural events organised by the centre, making the accommodation an integral facilitator of ISKCON's charitable programmes and not a commercial hotel service. Details of more than 35 centres where accommodation is maintained as against only one of Juhu, Mumbai on which reliance is placed by the ld. CIT(E) is tabulated below: International Society For Krishna Consciousness Rent Charges for Guest Houses at various Centre across India Guest House Room tariff - Mayapur Room Category Building Name Capacity Base Rate (Rs.) per room....
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.... 1,600.00 Economy AC (Double) Life Patron Card Holder 990.00 Stage NAB AC Double Room For All General Public 900.00 Stage NAB AC Double Room Life Patron Card Holder 700.00 Guest House Room tariff - New Delhi South Room Type Base Rate (Rs.) per room per day Super Delux For All General Public 4,761.90 Super Delux Life Patron Card Holder 3,333.33 Delux For All General Public 3,333.33 Delux Life Patron Card Holder 2,380.95 Standard ( 3Bed) For All General Public 3,200.00 Standard ( 3Bed) Life Patron Card Holder 1,600.00 Standard ( 2Bed) For All General Public 2,133.33 Standard ( 2Bed) Life Patron Card Holder 1,280.00 Guest House Room tariff - NVCC Pune Room Type Base Rate (Rs.) per room per day AC For All General Public 1,971.43 Non AC For All General Public 1,333.33 AC Life Patron Card Holder 1,000.00 Non AC Life Patron Card Holder &n....
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....l receipts in the range of 43-47% of total receipts, are premised on a classification of all three income streams as "commercial" which classification is, for reasons set out above, fundamentally unsustainable. The actual computation of the 20% threshold, if carried out after (a) correctly classifying activities under the specific named limbs of section 2(15), (b) excluding activities that fall under those limbs from the denominator of the proviso test, and (c) applying the correct legal test from AUDA (supra) to the remaining activities, would yield a very different result from what the ld. CIT(E) has arrived at. 20.3. We accordingly hold that even on the alternative ground, i.e., assuming the proviso was applicable, ld. CIT(E)'s finding that commercial receipts exceed 20% of total receipts is not based on a correct application of the law to the facts available on record. 21. We now address the charge of "specified violation" under Explanation (g) to section 12AB(4). It is noted that Explanation (g) covers 'furnishing of incorrect information or documents' in the application for registration. 21.1. The factual position as emanating from the records is that assessee fi....
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....ely" understated the receipts. Drawing an inference of deliberate wrongdoing is a serious matter that requires cogent material, not merely an accounting difference. Ld. CIT(E) has not placed any material on record to support a finding of deliberate misrepresentation. Assessee had furnished all its details in the paper books on record. The charge of "specified violation" and the adverse inference of deliberate understatement are therefore not sustainable. 22. On the question of violation of the principles of natural justice, we note with concern the sequence of events as recorded in the impugned order itself. Para 3 of the impugned order, after referring to the assessee's reply dated 10.11.2025, records: "These activities are prima facie commercial in nature and being carried on for a consideration. The aggregate of receipts from such commercial activities exceeds twenty percent of total receipts; thereby attracting the applicability of proviso to section 2(15)." This conclusion, including the specific finding on the 20% threshold, was recorded before the show cause notice dated 21.03.2026 was even issued. The show cause notice was therefore issued not for the purpose of cond....
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....allenged income streams by the ld. CIT(E) have been accepted in past scrutiny assessments. No cogent material has been placed on record by the Revenue to justify departure from this consistent position. The ratio of Radhasoami Satsang (supra) applies. 23.1. Accordingly, in view of the above stated conclusions, impugned order dated 30.03.2026 passed by ld. CIT(E) rejecting assessee's application for renewal of registration u/s. 12AB is set aside. Ld. CIT(E) is directed to grant registration to the assessee u/s. 12AB as prayed. Grounds raised by the assessee in this regard are allowed. 24. The second appeal is towards rejection of application seeking renewal under section 80G(5)(ii) which is consequent to rejection of application for renewal of application for registration under section 12AB which has been adjudicated upon by us in the above paragraphs. Since, order of ld. CIT(E) in this regard has been set aside and he directed to grant the registration in terms of our stated observations and findings, the application seeking renewal under section 80G(5)(ii) is also directed to be allowed. Ld. CIT(E) is accordingly directed to grant renewal of approval under section 80G as....