Income Tax Appellate Tribunal - Jodhpur
Vijay Laxmi Foundation,Pali vs Cit (Exemption), Jaipur on 25 March, 2026
IN THE INCOME TAX APPELLATE TRIBUNAL
JODHPUR BENCH, JODHPUR
BEFORE DR. MITHA LAL MEENA, HON'BLE ACCOUNTANT MEMBER
AND SHRI SUDHIR PAREEK, HON'BLE JUDICIAL MEMBER
ITA Nos. 168 & 169/Jodh/2025
(Assessment Year - NA)
Vijay Laxmi Foundation CIT Exemption
Near Veterinary Hospital Jaipur - 302015
Narsinghpura, Sojat City,
Pali - 306104
PAN No. AADTV 5792 P
Assessee by Shri Amit Kothari, CA (Virtual)
Revenue by Shri O.P. Meena, CIT-DR (Virtual)
Date of Hearing 23.03.2026.
Date of Pronouncement 26.03.2026.
ORDER
DR. MITHA LAL MEENA, A.M.:
These appeals are filed by assessee against the separate order of Ld. Commissioner of Income Tax, Exemption Jaipur [hereinafter referred to as CIT(E)] even dated 23.12.2024 challenging therein rejection of the application for registration u/s 12AB and approval u/s 80G of the Act.
2. Having heard both the sides and perusal of record, we find that Ld. CIT(E) has rejected the appellants application for registration u/s 12AB on the ground of firstly absence of dissolution clause and secondly the benefit to interested person. The Ld. CIT(E) has stated that the appellant assessee has not furnished copy of land ownership document and that payment made to the 2 ITA Nos. 168 & 169/Jodh/2025 Asst. Year: NA Deepak Tak amounting to Rs. 7,01,000/- was for the purpose of another land acquisition at Sojat where Deepak Tak sold land on 08.06.2022 for Rs. 7,01,000/- to the trust at higher rate but the DLC of the land was Rs. 3,95,993/- which shows that assessee is making excess payment to the trustees. The CIT(E) further observed that in case of payment made to Kamini Ben Parihar of Rs. 8,05,000/-, no supporting documents has been submitted, no ledger account and no proof of any payments to Kamini Ben Parihar was furnished by the assessee. The CIT(E) has invoked Section 113(1)(c) and Section 13(3) of the Act and stated that the trust carries out the transaction directly and indirectly for the benefit of the specified persons and that Mr. Deepak Tak trustee/member of the trust is one of the person as specified in Section 13(3)(a). Thus, the Ld. CIT(E) has concluded that he is not satisfied with the reply and accordingly he rejected the application for registration u/s 12AB and consequential approval u/s 80G of the Act and also cancelled its earlier provisional registration.
3. The Ld. Counsel for the assessee objected to the decision of the Ld. PCIT as regards to the no dissolution clause of trust and that in absence of same, it is not clear what will happen to the assets and liabilities of the appellant. The AR has submitted before the Ld. PCIT that as per clause 18(i), it is specifically mentioned that no part of assets of the trust shall be utilized for the purposes 3 ITA Nos. 168 & 169/Jodh/2025 Asst. Year: NA other than the objectives of the trust. This clearly indicates that at the time of dissolution, its assets will be utilized only towards the objects of the trust. It was further submitted that the trust was committed to fulfilling its objects which include educational, medical and other charitable activities on a long term basis. The AR argued that the objections so raised by the Ld. CIT(E) are not justified. The AR has also referred to the recent decision in the case of Hon'ble Bombay High Court in the Writ Petition filed by the Chamber of Tax Consultants, Writ Petition No. L(No.) 7587 of 2026 in order dated 09.03.2026, the Hon'ble Court held that absence of dissolution clause cannot be a basis to deny registration to the charitable trust. The AR further placed reliance to the judgment delivered by Hon'ble Allahabad High Court in case of CIT Vs. Red Rose School (2007) 212 CTR 394 (All.), wherein it was held that at the stage of registration, the CIT(E) has to examine objects and genuineness of activities and not the hypothetical future contingencies. The AR pleaded that absence of dissolution clause in the deed was not a valid ground for not granting registration to the trust. The Ld. AR referred to page 8 of the impugned order where the reply of the appellant assessee was reproduced. The Ld. AR argued that no benefit has been given to the specified persons. In the detailed submissions made before the Ld. PCIT, it was stated that the payment made to Deepak Tak was reimbursement for the purpose of land acquisition and 4 ITA Nos. 168 & 169/Jodh/2025 Asst. Year: NA similarly, the payment to Kamini Ben Parihar was also for the purpose making payment of written expenses for fulfilling the objects of the trust. The AR further submitted that as regards payment to Mangi Lal Tak the amount was wrongly picked up from the Bank. In fact, the amount of Rs. 5,00,000/- was paid to Vijay Suri Education Trust not to Mangi Lal Tak towards the objects of the trust. In support the AR placed reliance on the following judgments:
1. Ananda Social & Educational Trust Vs. CIT (2020) 426 ITR 340 (SC)
2. CIT Vs. Surya Educational & Charitable Trust (2013) 203 Taxman 53 (P&H)
3. DIT(E) Vs. Garden City Educational Trust (2010) 191 Taxman 238 (Kar.)/330 ITR 480 (Kar)
4. The Ld. DR placed reliance on the impugned order, but he did not controvert the contention of the assessee.
5. From the record, it is evident that as per Clause 18(i) of the Trust Deed, no part of the assets of the trust shall be utilized for the purpose other than the activities of the trust which itself indicates that at the time of dissolution of the trust, its assets would be utilized only towards the objects mentioned in the Trust Deed including educational, medical and other charitable activities for the public interest at large on a long term basis.5
ITA Nos. 168 & 169/Jodh/2025 Asst. Year: NA
6. In the case of the Chamber of Tax Consultants (supra), the Hon'ble Bombay High Court has recently held that absence of dissolution clause is not a valid ground for rejection of registration by observing vide Para 45 as under:
"In summary, we hold that a public charitable trust is deemed irrevocable by operation of law unless the instrument of trust expressly provides a power of revocation. The absence of an explicit irrevocability clause is not a ground for rejecting an application for registration or renewal under section 12AB of the Act. Even if the Deed provides for any revocability clause, due to operation of sections 22(3A) and 22(3B) of the MPT Act, such trusts which are registered under the MPT Act, would be irrevocable insofar as the Income-tax Act is concerned but we leave this issue open to be decided in an appropriate case. The action of Respondent No. 1 is therefore, contrary to the plain language of the statute, binding judicial precedents of this Court, and is manifestly arbitrary. Such action, as rightly pointed out by the Petitioners, have shaken the entire ecosystem of functioning of the charitable trusts. It cannot be forgotten that the trusts are contributing to nation building by doing charitable activities and that too voluntarily and, thus, must be treated with a fair and reasonable approach by the revenue."
7. Following Bombay High Court judgment in the case of Chamber of Tax Consultants (supra), we hold that objection of the Ld. PCIT is hyper-technical, unsustainable, and contrary to settled law. Therefore, in our view absence of 6 ITA Nos. 168 & 169/Jodh/2025 Asst. Year: NA explicit irrevocability clause would not be a valid ground for rejecting an application of the assessee for registration or renewal u/s 12AB of the Act.
8. We find that the payments were made to Deepak Tak and Kamini Ben Parihar for the purpose of fulfilling the object of the trust either for the purchase of the land or to meet out the written expenses. It is noted that the Ld. PCIT (Exemption) has made factually wrong observation regarding the payment to Mangi Lal Tak, by picking up an entry from the bank account as against the said amount of Rs. 5,00,000/- was paid to Vijay Suri Education Trust and not to Mangi Lal Tak. In our view, all these payments were made for the purpose for fulfilling the objects of the trust and the expenditure has been incurred to meet the objects of the charitable purpose of the trust. In view of that matter, it cannot be said that benefit has been given to a specified person in violation of Section 13(3) of the Act.
9. In the present case, the objects of the trust are genuinely charitable in nature and the activities which the trust proposed to carry on were genuine in the sense that they are invested in the land with the intention to carry out the objects of the trust. The Ld. PCIT ought to have record a finding of fact that activities were actually carried out by the trust in accordance with the object of 7 ITA Nos. 168 & 169/Jodh/2025 Asst. Year: NA the trust instead of making vague allegations based on factually incorrect observations.
10. In the case of Ananda Social & Educational Trust Vs. CIT (supra) on similar facts, the Hon'ble Apex Court has observed as under:
"Since s. 12AA pertains to the registration of the trust and not to assess of what a trust has actually done, we are of the view that the term 'activities' in the provision includes 'proposed activities'. That is to say, a CIT is bound to consider whether the objects of the trust are genuinely charitable in nature and whether the activities which the trust proposed to carry on are genuine in the sense that they are in line with the objects of the trust. In contrast, the position would be different where the CIT proposes to cancel the registration of a trust under sub-s. (3) of s. 12AA of the Act. There the CIT would be bound to record the finding that an activity or activities actually carried on by the trust are not genuine being not in accordance with the objects of the trust. Similarly, the situation would be different where the trust has before applying for registration found to have undertaken activities contrary to the objects of the trust."
11. Following the Hon'ble Supreme Court judgment in the case of Ananda Social and Educational Trust Vs. CIT (supra), the Chamber of Tax Consultants (Bombay High Court) (supra), we hold that the decision of the Ld. PCIT is perverse to the facts on record in rejecting the application of the assessee for granting registration u/s 12AB of the Income Tax Act, 1961. Accordingly, we 8 ITA Nos. 168 & 169/Jodh/2025 Asst. Year: NA direct the Ld. PCIT to grant registration to the applicant u/s 12AB of the Act after renewal of provisional registration.
ITA No. 169/Jodh/2025
12. Since the assessee gets relief in ITA No. 168/Jodh/2025 where we have directed the Ld. PCIT to grant registration u/s 12AB of the Income Tax Act to the applicant assessee. Consequent to granting registration u/s 12AB, the Ld. PCIT may also grant approval u/s 80G of the Income Tax Act to the applicant trust.
13. In the backdrop of aforesaid discussion, both the appeals of the assessee are allowed.
Order pronounced in the open court on 26/03/2026.
Sd/- Sd/-
(SUDHIR PAREEK) (DR. MITHA LAL MEENA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated : 26/03/2026.
Nimisha Sr. PS
True Copy
Copies to :
(1) The appellant.
(2) The respondent.
(3) CIT
9
ITA Nos. 168 & 169/Jodh/2025
Asst. Year: NA
(4) CIT(A)
(5) Departmental Representative
(6) Guard File
BY ORDER,