Pista Devi Education Society Vs CIT (Exemptions) (ITAT Delhi)
Summary: The Income Tax Appellate Tribunal, Delhi Bench ‘A’, considered whether registration under Section 12AB of the Income Tax Act, 1961 could be refused on the basis of alleged payments to trustees or specified persons and alleged application of income attracting Section 13 of the Act.
Pista Devi Education Society filed an application for registration under Section 12(1)(ac)(vi) of the Act on 24.02.2025. The Commissioner of Income Tax (Exemptions), Chandigarh sought documents concerning the objects and genuineness of the trust and issued a show cause notice dated 13.03.2025.
On examining the bank statement, the CIT noticed high-value debit transactions in favour of members of the society, namely Shri Anil Tayal, President, Smt. Shewta Tayal, Vice-President and Savita Tayal. The CIT also noticed cash deposits and withdrawals and required the assessee to explain the transactions and their nexus with the charitable activities carried out in accordance with the objects of the society.
The CIT considered the details furnished by the assessee but concluded that the activities did not establish the charitable nature of the transactions. The CIT also examined transactions with Shri Anil Tayal and noted an opening balance of Rs.64,89,869/- and payments of Rs.92,50,000/- during Financial Year 2024-25. According to the CIT, the payment exceeded the recorded liability and the assessee had not provided adequate explanation or supporting evidence. The ledger accounts of Shweta Tayal and Savita Tayal were also considered unsubstantiated for want of documentary evidence establishing the nexus between the genuine needs of the trust and the loans raised.
