Inani Charitable Foundation Vs Commissioner of Income Tax (Exemption), Jaipur (ITAT, Jodhpur Bench)
Halwa, Kadha or Tea Need Not Be a Full Meal to Constitute Charity: Jodhpur ITAT Directs Grant of Section 12AB Registration and 80G Approval
Summary: The Jodhpur Bench of the ITAT allowed two connected appeals of Inani Charitable Foundation against orders dated 15.09.2025 of the Commissioner of Income Tax (Exemption), Jaipur, rejecting its applications for regular registration under section 12AB and approval under section 80G(5) of the Income-tax Act, 1961, and cancelling the provisional registration and approval granted on 12.08.2024. The assessee had filed Form No. 10AB applications on 29.01.2025 and 30.01.2025 respectively. The CIT(E) doubted the genuineness of its charitable activities principally because of the nature and quantity of grocery purchases, absence of separate labour and cooking expenditure, photographs relating to food distribution, and a discrepancy between a bill for 48 sweaters and the claim that more than 100 sweaters had been distributed.
The assessee contended that its community food drives and health and wellness programmes involved distribution of nutritious food, halwa, herbal kadha, tea, immunity-boosting drinks and sweets to poor and needy persons and were never represented as conventional full-course meal programmes. It submitted that photographs constituted contemporaneous evidence and that absence of its banner in some photographs was merely a documentation deficiency which could not override books of account, GST invoices and banking transactions. As regards purchases including 260 kg of mirchi and 70 kg of tea, the assessee argued that these were recurring kitchen consumables used for different outreach programmes over the year and that the CIT(E)’s quantitative conclusions were unsupported by technical or expert material. The invoices had been issued by identified registered third-party dealers and had not been shown to be forged or bogus. The absence of separate halwai or labour expenditure was explained by voluntary participation of trustees, volunteers and members of the collaborating organisation. In relation to sweater distribution, the assessee explained that it had purchased 48 sweaters while the remaining sweaters distributed at the joint event were contributed by Beyours International Charitable Organisation. The assessee also submitted that no person specified under section 13(3) had been identified as having received any personal benefit from trust funds.
The Tribunal held that the inquiry under section 12AB at the registration stage concerns whether the objects are charitable, activities are genuine and requirements of other laws material to achievement of the objects have been complied with; registration proceedings are distinct from assessment proceedings and do not require detailed examination of the necessity, reasonableness or allowability of every item of expenditure as in a regular assessment. The CIT(E) had not doubted the charitable objects or found any clause contrary to section 2(15), and had not established violation of any other material law. The assessee had produced books of account, expenditure ledgers, third-party GST invoices and photographs, while no inquiry had established that suppliers were non-existent, invoices forged, or payments returned to the assessee or its trustees.
The ITAT held that distribution of halwa, kadha, tea or other consumable items to poor and needy persons was capable of constituting relief to the poor and there was no statutory requirement that such assistance must consist of a full-course meal. Absence of the assessee’s banner in some photographs could indicate imperfect documentation but could not by itself establish fictitious activity. Similarly, without technical, expert or independent material, doubts concerning quantities of groceries could not establish that the institution and all its activities were non-genuine in the absence of evidence of sham transactions, bogus invoices or diversion of funds. The explanation regarding voluntary labour had not been disproved. As regards sweaters, the evidenced purchase of 48 sweaters could not be erased merely because more than 100 were distributed at a joint event; at the highest, the difference represented a deficiency in documenting the collaborator’s contribution. The allegation of personal use was also unsupported because no trustee, founder, member or other person specified under section 13(3), or any particular withdrawal, payment, asset or transaction conferring such benefit, had been identified.
The Tribunal further clarified that registration under section 12AB does not automatically result in allowance of exemption under sections 11 and 12 for every assessment year; the Assessing Officer remains competent to examine actual application of income, genuineness and allowability of expenditure and compliance with sections 11 to 13 during assessment proceedings. On the overall material, the Tribunal found that the discrepancies relied upon by the CIT(E) were insufficient to sustain a finding of non-genuineness and rested on suspicion and subjective assessment rather than positive evidence. Although the Departmental Representative did not object to remand, the Tribunal held that remand would serve no useful purpose because the relevant material was already before the CIT(E), the charitable nature of the objects was undisputed and no further statutory requirement remained identified for examination. It therefore set aside the order and directed the CIT(E) to grant regular registration under section 12AB for the period permissible under law, with effect from the assessment year for which the Form No. 10AB application dated 29.01.2025 was made, and also set aside cancellation of provisional registration.
In the connected appeal, the Tribunal noted that the CIT(E)’s rejection of section 80G approval rested principally upon rejection of section 12AB registration and the finding of non-genuine activities. Since both foundations had ceased to survive and no independent violation of section 80G(5) conditions had been identified, the consequential rejection could not stand. The CIT(E) was accordingly directed to grant approval under section 80G(5) for the period permissible under law with effect from the assessment year for which the Form No. 10AB application dated 30.01.2025 was made, and cancellation of provisional approval dated 12.08.2024 was also set aside. Both appeals were allowed.
Alternative SEO Titles
- ITAT Jodhpur Directs Grant of Section 12AB Registration to Charitable Foundation
- Documentation Gaps Cannot Establish Non-Genuine Charitable Activities: ITAT Jodhpur
- ITAT Jodhpur Sets Aside Section 12AB and 80G Rejections
- Food and Sweater Distribution Doubts Cannot Deny Trust Registration: ITAT
- ITAT Directs Section 12AB Registration and 80G Approval Without Remand
FULL TEXT OF THE ORDER OF ITAT JODHPUR
1. These two appeals preferred by the assessee arise from two separate orders passed by the learned Commissioner of Income Tax (Exemption), Jaipur [“CIT(E)”], both dated 15.09.2025, concerning the assessee’s application for regular registration under section 12AB and its application for approval under section 80G(5) of the Income-tax Act, 1961 (“the Act”). Since both appeals concern the same assessee, arise from connected proceedings and involve common facts, they were heard together on 06.08.2026 and are being disposed of by this common order.
2. In ITA No. 889/Jodh/2025, the assessee has challenged the order dated 15.09.2025 passed by the learned CIT(E) in Form No. 10AD, whereby the assessee’s application for regular registration under section 12AB was rejected and its provisional registration dated 12.08.2024 was also cancelled. In ITA No. 890/Jodh/2025, the assessee has challenged the order dated 15.09.2025 passed by the learned CIT(E) in Form No. 10AD, whereby its application for regular approval under section 80G(5) was rejected and the provisional approval dated 12.08.2024 was also cancelled.
3. Facts in brief
3.1. The assessee is a charitable foundation which was granted provisional registration under section 12A(1)(ac)(vi) and provisional approval under section 80G(5) on 12.08.2024. It subsequently filed applications in Form No. 10AB on 29.01.2025 for regular registration under section 12AB and on 30.01.2025 for approval under section 80G.
3.2. During the registration proceedings, the learned CIT(E) issued notices dated 15.04.2025, 14.05.2025 and 25.07.2025. After considering the replies and material furnished, the learned CIT(E) doubted the genuineness of the assessee’s food-distribution activities, principally on account of the nature and quantity of grocery items purchased, absence of expenditure on labour and cooking, and the photographs furnished by the assessee. The learned CIT(E) also noticed that the assessee had produced a bill for purchase of 48 sweaters, whereas it had claimed distribution of more than 100 sweaters.
3.3. The learned CIT(E), therefore, concluded that the assessee had failed to establish the genuineness of its activities. By order dated 15.09.2025 passed in Form No. 10AD under section 12AB(1)(b)(ii)(B), he rejected the application for regular registration and also cancelled the provisional registration dated 12.08.2024.
3.4. Since the application for registration under section 12AB had been rejected, the learned CIT(E), by a separate order dated 15.09.2025 passed in Form No. 10AD, also rejected the assessee’s application for approval under section 80G and cancelled its provisional approval dated 12.08.2024.
4. Aggrieved by both orders, the assessee is in appeal before us.
5. Before us, the learned Authorised Representative (AR) reiterated the facts. It was submitted that the assessee had undertaken community food drives and health and wellness outreach programmes involving the preparation and distribution of nutritious food, herbal kadha and immunity-boosting drinks and sweets to poor and needy persons. The activity had never been represented as distribution of a conventional full-course meal. The mere fact that halwa, kadha or tea was distributed could not, by itself, render the charitable activity non-genuine.
6. The learned AR submitted that the photographs furnished before the learned CIT(E) constituted contemporaneous evidence of the activities actually undertaken. The absence of a banner bearing the name of the assessee in some of the photographs was merely a deficiency in documentation and could not override the books of account, GST invoices and banking transactions.
7. The learned AR further submitted that the conclusion of the learned CIT(E) regarding the improbability of consumption of 260 kg of mirchi, 70 kg of tea and other grocery items was based upon surmise and was unsupported by any technical or expert material. The precise quantitative basis subsequently adopted in the impugned order was also not confronted to the assessee. It was explained that spices and other grocery items were recurring kitchen consumables intended for different outreach programmes conducted during the year and were not necessarily purchased or consumed for one particular event.
8. It was also submitted that the invoices were issued by registered third-party dealers, including J.K. Enterprises and Damodar Lal and Company, and contained their respective GST particulars. The learned CIT(E) had not brought any material on record establishing that the invoices were forged or bogus.
9. Regarding the absence of expenditure on a halwai or labour, the learned AR submitted that the activities were organised through the voluntary efforts of the trustees, volunteers and members of the collaborating organisation. Consequently, no separate labour or cooking charges were incurred.
10. With regard to sweater distribution, the learned AR explained that the assessee had purchased 48 sweaters from Rangoli Collection. The activity was undertaken jointly with Beyours International Charitable Organisation, which provided logistical assistance, volunteers and access to the beneficiaries. The balance sweaters distributed at the event were contributed by the collaborating organisation from its own resources. Therefore, according to the learned AR, there was no inconsistency between the bill for 48 sweaters and the distribution of more than 100 sweaters at the joint event.
11. The learned AR further contended that no person to whom the trust funds were allegedly diverted had been identified and no transaction or other positive material establishing personal use or benefit to a person specified under section 13(3) had been brought on record. The allegation of personal use was, therefore, unsupported by any tangible material.
12. The learned Departmental Representative (DR) relied upon the respective orders passed by the learned CIT(E). It was submitted that the assessee had failed to substantiate the genuineness of its activities to the satisfaction of the learned CIT(E). The learned DR, however, did not raise any objection to the matters being restored to the file of the learned CIT(E) for fresh examination and adjudication in accordance with law.
13. We have considered the rival submissions and perused the material available on record. The principal question for consideration is whether the learned CIT(E) was justified in holding that the activities of the assessee were not genuine and, on that basis, rejecting its application for regular registration under section 12AB and cancelling its provisional registration dated 12.08.2024. The connected issue relates to rejection of approval under section 80G and cancellation of the provisional approval granted to the assessee.
14. Under section 12AB, the inquiry at the registration stage is directed towards ascertaining whether the objects of the trust are charitable, whether its activities are genuine and whether the requirements of any other law material to the achievement of its objects have been complied with. Such proceedings are distinct from assessment proceedings. The registration authority is not required to undertake a detailed examination of the necessity, reasonableness or allowability of every item of expenditure in the manner contemplated during regular assessment.
15. In the present case, the learned CIT(E) has not doubted the charitable nature of the objects of the assessee. No clause of its constitutional document has been found to be non-charitable or contrary to section 2(15) of the Act. There is also no finding that the assessee has violated any other law material to the achievement of its objects. The rejection is founded entirely upon the conclusion that the food-distribution and sweater-distribution activities were not genuine.
16. The assessee had produced its books of account, ledger of expenditure, third-party GST invoices and photographs of the activities. The invoices were issued in the name of the assessee by identified dealers. The learned CIT(E) did not make any inquiry from those suppliers or bring any material on record to establish that the suppliers were non-existent, that the invoices were forged or that the payments made against such invoices were returned to the assessee or to any of its trustees.
17. The learned CIT(E) doubted the food-distribution activity principally because the photographs showed distribution of halwa, kadha or tea rather than a conventional meal. In our considered view, the nature of the food or drink distributed cannot, by itself, determine the charitable character or genuineness of the activity. Distribution of food, halwa, kadha, tea or other consumable items to poor and needy persons is capable of constituting relief to the poor. There is no statutory requirement that the assistance must necessarily consist of a full-course meal.
18. The absence of the name or banner of the assessee in some of the photographs may indicate imperfect documentation, but it cannot by itself establish that the activity was fictitious. The photographs are required to be considered cumulatively with the entries in the books of account, invoices issued in the assessee’s name, payments recorded by it and its explanation regarding the conduct of the activities.
19. The learned CIT(E) further inferred that 260 kg of mirchi, 70 kg of tea and other quantities appearing in the purchase invoices could not have been consumed in a single-day programme. The assessee explained that the grocery items were recurring consumables intended for different food-distribution and outreach programmes undertaken over a period and were not necessarily purchased or consumed for one particular event.
20. No technical, expert or independent material has been brought on record to demonstrate that the stated quantities were inherently incompatible with the charitable activities of the assessee. A doubt concerning the consumption or utilisation of a particular quantity may warrant verification of the corresponding expenditure in assessment proceedings. However, in the absence of evidence of a sham transaction, bogus invoice or diversion of funds, such doubt cannot justify the conclusion that the institution itself and all its activities were non-genuine.
21. The absence of separate expenditure on a halwai, labour, transportation or cooking charges was explained on the ground that the activities were organised with the voluntary assistance of trustees, volunteers and members of the collaborating organisation. The explanation has not been disproved by any contrary material. The absence of labour charges, therefore, cannot be treated as conclusive evidence that the activity was not undertaken.
22. As regards sweater distribution, the assessee produced a bill for the purchase of 48 sweaters. The learned CIT(E) doubted the activity because the assessee had stated that more than 100 sweaters were distributed. The learned AR explained that the activity was jointly undertaken with Beyours International Charitable Organisation, that the assessee had purchased 48 sweaters and that the remaining sweaters distributed at the joint event had been contributed by the collaborating organisation.
23. Even if the difference in the total number of sweaters required further explanation, the bill produced by the assessee evidenced the purchase of 48 sweaters for the charitable activity. A discrepancy concerning the aggregate number distributed at a joint event cannot erase the evidenced purchase or justify the conclusion that the entire activity was fictitious. At the highest, it represented a deficiency in documenting the contribution made by the collaborating organisation.
24. The learned CIT(E) has also alleged that the assessee used trust funds for personal purposes. However, the impugned order does not identify any trustee, founder, member or person specified under section 13(3) who allegedly received such benefit. No particular withdrawal, payment, asset or transaction representing personal use has been identified. An allegation of diversion or personal benefit, carrying serious civil consequences, cannot be sustained merely on the basis of a perceived mismatch between the quantities appearing in the purchase invoices and the photographic record.
25. Registration under section 12AB does not automatically result in the allowance of exemption under sections 11 and 12 for every assessment year. The Assessing Officer remains competent to examine the actual application of income, genuineness and allowability of particular expenditure and compliance with sections 11 to 13 during the relevant assessment proceedings. Consequently, any doubt concerning the utilisation of a particular item or quantity of goods can be examined in the appropriate assessment year without treating the entire institution as non-genuine at the registration stage.
26. On an overall consideration of the material, we find that the assessee has furnished books of account, expenditure ledgers, third-party invoices and photographs demonstrating that charitable activities had commenced. The activities are in conformity with its stated object of providing relief to poor and needy persons. The learned CIT(E) has neither doubted the charitable objects nor established that the activities were contrary to those objects. No bogus invoice, circular movement of funds, personal benefit, diversion of income or violation of any material law has been established.
27. The discrepancies referred to by the learned CIT(E), viewed individually or cumulatively, are insufficient to sustain the conclusion that the activities of the assessee were non-genuine. The conclusion rests upon suspicion and subjective assessment of the manner in which the activities ought to have been documented or conducted, rather than upon positive evidence of non-genuineness.
28. Though the learned DR did not object to restoration of the matter, we find that a remand would serve no useful purpose. The relevant material was already before the learned CIT(E), the charitable nature of the objects is undisputed and no further statutory requirement has been identified as remaining unexamined. The assessee cannot be subjected to another round of proceedings merely for reconsideration of the same material.
29. We, therefore, set aside the order dated 15.09.2025 passed by the learned CIT(E) in Form No. 10AD. The learned CIT(E) is directed to grant regular registration to the assessee under section 12AB for the period permissible under law, with effect from the assessment year for which the application dated 29.01.2025 in Form No. 10AB was made. The cancellation of the provisional registration dated 12.08.2024 is also set aside.
30. As regards the connected appeal under section 80G, the learned CIT(E) rejected the application principally because the assessee’s application under section 12AB had been rejected and its activities had been treated as non-genuine. Both foundations of the order under section 80G cease to survive in view of our findings hereinabove.
31. The learned CIT(E) has not identified any independent violation of the conditions prescribed under section 80G(5). Once the assessee is held entitled to registration under section 12AB and the finding of non-genuineness is set aside, the consequential rejection of approval under section 80G cannot be sustained.
32. Accordingly, the order dated 15.09.2025 passed by the learned CIT(E) in Form No. 10AD is set aside. The learned CIT(E) is directed to grant approval to the assessee under section 80G(5) for the period permissible under law, with effect from the assessment year for which the application dated 30.01.2025 in Form No. 10AB was made. The cancellation of the provisional approval dated 12.08.2024 is also set aside.
33. In the result, both appeals filed by the assessee are allowed.
Order pronounced on 25.08.2026.
