ITAT Jaipur Remands Kogta Foundation’s Section 12AB Registration Rejection

Kogta Foundation Vs CIT (Exemption) (ITAT Jaipur)

Trust Deed Need Not List Every Activity: Road Safety Falls Within Charitable Objects, Related-Party Donations Are No Bar

The controversy

The Jaipur ITAT considered rejection of a charitable trust’s section 12AB registration applications on grounds including road safety activities not expressly mentioned in its deed, donations from a related company and inadequate expenditure evidence.

The Tribunal held that a trust deed need not catalogue every activity undertaken to achieve its objects. Road safety campaigns and helmet distribution fell within the foundation’s charitable objects.

It also held that receiving donations from a company connected with trustees cannot, by itself, justify rejection. However, actual conduct and utilisation required verification. Registration was therefore remanded, with these legal findings binding upon the CIT(E).

Second-round rejection of registration

Kogta Foundation was constituted by a trust deed dated 30 December 2020. It stated that provisional registration had been granted on 28 May 2021, valid up to AY 2024-25.

Its application for regular registration, filed on 29 September 2023 under section 12A(1)(ac)(iii), was initially rejected for insufficient documentary evidence.

The Tribunal restored the matter in September 2024. During renewed proceedings, the foundation furnished a reply, but the CIT(E) again rejected registration on 6 March 2026.

An earlier objection concerning registration under the Rajasthan Public Trusts Act, 1959 stood resolved. The remaining concerns related to the scope and genuineness of activities, supporting documents and utilisation of donations.

Road safety expenditure questioned

The CIT(E) found that primary evidence such as invoices, beneficiary confirmations, distribution records and completion proofs had not been furnished for major expenditure.

The authority particularly questioned road safety campaigns and helmet distribution, recording expenditure of ₹30,70,000 for the year ended March 2024.

It also objected that these activities were not specifically mentioned in the trust’s core objects.

Before the Tribunal, the foundation explained that its programme involved distribution of 3,600 helmets and awareness campaigns. It contended that these activities promoted general public welfare and fell within its deed.

Objects and activities must be distinguished

The Tribunal noted that the trust’s objects included relief of the poor, education, preservation of the environment, advancement of general public utility and preventive health care.

Relying on CIT v. Andhra Chamber of Commerce, 55 ITR 722 (SC), it recognised the broad scope of general public utility.

The Bench explained that a deed states the institution’s objects; individual activities are the means of achieving them.

Road safety awareness and helmet distribution seek to prevent injury and loss of life. When undertaken for the public at large, they promote public welfare and fall within preventive health care.

The objection based merely on their absence from an express activity list was therefore rejected. However, the Tribunal distinguished their charitable character from proof that they had actually occurred.

Related-company donations were not inherently objectionable

A substantial portion of donations came from Kogta Financial India Limited, a concern connected with the trustees. The foundation described these as disclosed CSR contributions received through banking channels.

The Tribunal held that the source alone could not justify rejection.

It explained that section 13(1)(c), read with section 13(3), concerns application of trust income or property for specified persons’ benefit, rather than merely receiving contributions from them.

Nevertheless, the CIT(E) remained entitled to verify utilisation, including whether funds or property had benefited a specified person.

Additional evidence required verification

The foundation submitted a 500-page paper book, containing vouchers, beneficiary lists, photographs and third-party correspondence.

The Tribunal found that much of the primary evidence now relied upon had not been placed before the CIT(E), despite the earlier remand.

It also identified discrepancies. The audited accounts showed road safety expenditure of ₹30,60,000, against ₹30,70,000 recorded in the rejection order. Comparative figures were grouped differently in subsequent accounts.

The additional documents were admitted under Rule 29 of the ITAT Rules, but verification, reconciliation and possible third-party enquiries required examination by the CIT(E).

Both applications restored

The regular-registration application was restored for fresh examination of genuineness, with the Tribunal’s findings on charitable objects and donation sources binding upon the authority.

A later application dated 29 September 2025, filed under section 12A(1)(ac)(ii), had been rejected based on the earlier registration rejection. That order was also set aside.

Eligibility to use that clause while holding provisional registration was left for fresh determination. Both appeals were allowed for statistical purposes.

Author’s comments

The decision draws a useful distinction between charitable objectives and the activities chosen to fulfil them. An incidental activity need not be named individually where it falls within the deed’s stated purposes.

It similarly separates receipt of related-party donations from prohibited private benefit. The former does not automatically establish the latter.

However, favourable legal findings cannot replace evidence. Audited statements and broad descriptions did not eliminate the need for vouchers, beneficiary records and reconciled figures.

The remand is therefore limited in an important respect: the CIT(E) must respect the settled findings on objects and funding sources while independently examining whether the claimed activities and expenditure are genuine

Cases Discussed

• CIT v. Andhra Chamber of Commerce, [1965] 55 ITR 722 (Supreme Court) — Relied upon for the broad meaning of advancement of general public utility under section 2(15).
• Smt. Basanti Devi Foundation v. CIT (Exemption), Jaipur, ITA Nos. 314 & 329/Jodh/2025 — Cited by the assessee; distinguished because further factual verification was not necessary in that case.
• Dharam Chandan Charitable Trust v. CIT (Exemption), Chandigarh, ITA No. 653/Asr/2019 — Cited by the assessee; distinguished because the Revenue had not strongly objected to the evidence produced in that case.
• All India Securitisation and Enforcement of Security Interest Association v. CIT (Exemption), Jaipur, ITA No. 828/JPR/2026 — Considered regarding restoration of a later registration application for independent adjudication.

FULL TEXT OF THE JUDGMENT/ORDER OF ITAT JAIPUR

1. These two appeals by the Assessee are directed against two separate orders, both dated 06.03.2026, passed in Form No. 10AD by the learned Commissioner of Income Tax (Exemption), Jaipur [hereinafter referred to as “the learned CIT(E)”] under section 12AB of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), rejecting two applications of the Assessee in Form No. 10AB for registration. Since the appeals arise from the same set of facts and the outcome of the second appeal depends upon the first, they were heard together and are disposed of by this common order for the sake of convenience. The particulars of the two impugned orders are as under:

2. The grounds of appeal raised by the Assessee before us in ITA No. 1095/JPR/2026 read as under:

“Ground No. 1

CIT(E) has wrongly rejected the application for registration for u/s 12A by wrongly mentioning in order of failure to produce Bills/Vouchers, unverifiable Road Safety Expenditure, Activities beyond the scope of objects specified in the trust deed, related Party Funding and Financial Credibility, absence of Verifiable Beneficiary Details documentary evidence to verify genuineness of its activities and the activities beyond the scope of objects specified in the trust deed. Whereas the assessee trust is a charitable trust working for public welfare activities such as promotion and advancement of general public welfare, providing relief to the Poor who deserve to be addressed and helping in education sector and preservation of environment and rejection order is on wrong grounds . Hence CIT(E) order should be made null and void and 12A registration may be directed to be given to the trust.

Ground No. 2

The appellant prays your honor to add amend or alter all or any of the grounds of the appeal on or before the date of hearing.”

3. The grounds of appeal raised by the Assessee in ITA No. 1228/JPR/2026 read as under:

“Ground No. 1

The CIT(E) has wrongly rejected the application for registration u/s 12A in Form 10AB application dated 29.9.2025 is rejected on wrong grounds such as trust is not already registration under clause(i) or (iii) of first proviso to clause (ac) of sub -section (1) of section 12A and Set-aside proceeding has been rejected on 06.03.2026 . Hence, this 10AB application dated 29.9.2025 was rejected as being deficient and not eligible for registration. A rejection order which does not identify the alleged deficiency is a non-speaking order, violates principles of natural justice, and is liable to be quashed. The assessee trust was fully eligible to apply under Sub-clause (ii) of clause (ac) of sub-section (1) of section 12A of the Act since it held valid provisional registration under Sub-clause (iii) bearing URN AAETK4248EF2021401 granted on 28.05.2021. The CIT(E)’s finding that the Trust was “not registered under clause (i) or (iii)” is contrary to Departmental records and factually incorrect. The impugned order is bad in law and hence should be made null and void. The Trust is a genuine charitable organisation and 12A registration may be directed to be granted. The CIT(E) has rejected the Trust’s 12AB application in set-aside proceedings order dated 06.03.2026, which is itself under appeal before your Hon’ble Tribunal filed on 24.04.2026 and matter is sub judice , so rejection to deny the Trust’s application under Sub-clause (ii) is wrong . Hence 12A registration is wrongly rejected despite being genuine charitable organisation operating for many years so CIT Exemption should be directed to grant registration under section 12A of the Act,1961.

Ground No. 2

The appellant prays your honor to add amend or alter all or any of the grounds of the appeal on or before the date of hearing.”

4. Briefly stated, the facts of the case are that the Assessee is a public charitable trust created by a deed dated 30.12.2020. According to the Assessee, it was granted provisional registration on 28.05.2021, valid up to the assessment year 2024-25. Thereafter, it applied in Form No. 10AB under sub-clause (iii) of clause (ac) of section 12A(1) of the Act for regular registration. The learned CIT(E) rejected that application by order dated 19.02.2024 for want of documentary evidence, bills and vouchers of major expenditure and failure to establish the genuineness of activities. On appeal, the Tribunal in ITA Nos. 288 and 289/JPR/2024, by order dated 27.09.2024, restored the matter to the learned CIT(E) for a fresh decision after affording a reasonable opportunity of being heard.

5. In the set aside proceedings, the learned CIT(E) issued a questionnaire calling for complete ledgers, bills and vouchers, beneficiary details, bank statements and proof of activities. The Assessee filed a reply dated 06.12.2025. The learned CIT(E) accepted that the earlier objection regarding registration under the Rajasthan Public Trusts Act, 1959 stood addressed, as the Assessee had obtained registration dated 12.02.2025 (paragraph 3.1 of the impugned order). However, the learned CIT(E) was not satisfied about the genuineness of the activities and rejected the application under section 12AB(1)(b)(ii)(B) of the Act on the following five grounds:

6. Meanwhile, on 29.09.2025, the Assessee filed another application in Form No. 10AB, this time under sub-clause (ii) of clause (ac) of section 12A(1) of the Act. By the second impugned order of the same date, i.e. 06.03.2026, the learned CIT(E) rejected this application as deficient. The learned CIT(E) held that sub-clause (ii) applies only to an institution already registered under section 12AB of the Act, that the Assessee was not registered under sub-clause (i) or (iii), and that its application under sub-clause (iii) had been rejected on 19.02.2024 and again on 06.03.2026 in the set aside proceedings.

7. Before us, the learned Authorised Representative (hereinafter referred to as “the learned AR”) relied on the written submissions dated 01.10.2026 and a common paper book of 500 pages. In ITA No. 1095/JPR/2026, the learned AR submitted that the trust deed, the expense ledgers, the audited financial statements for the financial years 2022-23 to 2024-25 and the registration documents were before the learned CIT(E), and that the Assessee also has bills, vouchers, cheque payment details, beneficiary lists, photographs and letters of the Rajasthan Sadak Suraksha Society, which are now placed at pages 30 to 412 of the paper book. According to the learned AR, the road safety activity, consisting of distribution of 3,600 helmets and awareness campaigns, is an activity of general public utility covered by the objects of the deed. The donations from Kogta Financial India Ltd. were stated to be disclosed CSR contributions received through banking channels. Reliance was placed on the orders of the Tribunal in Smt. Basanti Devi Foundation v. CIT (Exemption), Jaipur (ITA Nos. 314 & 329/Jodh/2025) and Dharam Chandan Charitable Trust v. CIT (Exemption), Chandigarh (ITA No. 653/Asr/2019), and a prayer was made to direct the learned CIT(E) to grant registration.

8. In ITA No. 1228/JPR/2026, the learned AR submitted that the Assessee was eligible to apply under sub-clause (ii) as it held provisional registration granted on 28.05.2021, and that the rejection of the application under sub-clause (iii) could not be the basis for rejecting the later application since that rejection was itself under appeal before the Tribunal. Reliance was placed on the order of the Jaipur Bench of the Tribunal in All India Securitisation and Enforcement of Security Interest Association v. CIT (Exemption), Jaipur (ITA No. 828/JPR/2026).

9. The learned Departmental Representative (hereinafter referred to as “the learned DR”) supported the orders of the learned CIT(E).

10. We have heard the rival submissions and perused the material on record, including the paper book, to the extent relevant. Under section 12AB(1)(b) of the Act, on an application made under sub-clause (ii) or (iii) of section 12A(1)(ac), the learned CIT(E) is required to satisfy himself about the objects of the trust, the genuineness of its activities and its compliance with the requirements of any other law material for achieving its objects. The compliance with the Rajasthan Public Trusts Act, 1959 is no longer in dispute. What survives in ITA No. 1095/JPR/2026 is, therefore, (a) whether the activities of road safety fall within the objects of the trust, (b) whether the receipt of donations from a related concern is a ground for rejection, and (c) whether the genuineness of the activities is established. We take them in that order.

ITA No. 1095/JPR/2026

(a) Activities vis a vis the objects of the trust

11. The learned CIT(E) has himself recorded in paragraph 5.3.1 of the impugned order that the primary objects of the Assessee “relate to relief of the poor, education, preservation of environment and advancement of general public utility”. His objection is only that road safety campaigns and helmet distribution “do not find specific or explicit mention” in the deed. The trust deed (pages 1 to 28 of the paper book) was before the learned CIT(E). The primary object of the trust, as extracted from the Trust Deed reads as under:

“b. The primary object of the Trust shall be to carry Public Charitable work under Corporate Social Responsibility (CSR activities) as prescribed in Schedule VII of the Companies Act, on behalf of Settlor and other contributories to the Trust. …

i. Eradicating hunger, poverty and malnutrition, promoting health care including preventive health care, and sanitation including contribution to the Swach Bharat Kosh set-up by the Central Government for the promotion of sanitation and making available safe drinking water.”

12. The expression “advancement of any other object of general public utility” in section 2(15) of the Act is of wide import. The Hon’ble Supreme Court in CIT v. Andhra Chamber of Commerce [1965] 55 ITR 722 (SC) observed as under:

“The expression “object of general public utility” in section 4(3) would prima facie include all objects which promote the welfare of the general public.”

13. A trust deed is not a catalogue of every activity that the trust may undertake. It states the objects; the activities are the means of achieving them. Awareness campaigns on road safety and the distribution of helmets to two wheeler riders are aimed at preventing injury and loss of life on public roads. Such activities, if actually carried out for the public at large, plainly promote the welfare of the general public and also fall within the expression “preventive health care” used in the deed. The learned CIT(E) has neither found that these activities are non charitable in character nor that they benefit any private person. We, therefore, hold that the road safety activities claimed by the Assessee are within the objects of the trust, and the finding in paragraph 5.3 of the impugned order is set aside. We make it clear that this finding is confined to the nature of the activity. Whether, and to what extent, the activity was actually carried out is a matter of genuineness, which is dealt with below.

(b) Donations from a related concern

14. The learned CIT(E) has accepted in paragraph 5.4.1 of the impugned order that the receipt of donations from a related entity “is not prohibited per se”. The Act does not bar a trust from receiving donations from a company connected with its trustees. Section 13(1)(c) of the Act, read with section 13(3), is concerned with the application of the income or property of the trust for the benefit of such persons, and not with the source of the donations. The receipt of donations from Kogta Financial India Ltd., which is disclosed in the accounts, cannot by itself be a ground for rejecting the application. The concern expressed by the learned CIT(E) is really about the verification of the utilisation of these funds. That concern is part of the enquiry into genuineness, and the learned CIT(E) will be free to examine it, including whether any part of the income or property of the trust has been applied for the benefit of a person referred to in section 13(3) of the Act.

(c) Genuineness of the activities

15. The audited financial statements placed at pages 413 to 419 of the paper book, which were before the learned CIT(E), show the following position:

Thus, the trust receives and spends substantial sums every year, almost entirely through donations. The finding of the learned CIT(E) is not that the expenditure is non charitable, but that it is not supported by primary evidence.

16. The evidence that the Assessee now relies upon to meet this finding, namely the vouchers, beneficiary lists, photographs and third party letters at pages 30 to 412 of the paper book, was not before the learned CIT(E). This is evident from the endorsement made by the learned AR on the index of the paper book, which certifies that only pages 1 to 31, the ledgers of expenses, and pages 413 to 419, 446 to 475 and 482 to 491 were submitted to the lower authorities. The record also contains inconsistencies that require verification. The learned CIT(E) has taken the road safety expenditure at Rs 30,70,000 (Rs 20,60,000 and Rs 10,10,000), whereas the audited Income and Expenditure Account for the financial year 2023-24 shows Rs 30,60,000 (Rs 20,60,000 and Rs 10,00,000). Further, the figures of the financial year 2023-24 shown as comparatives in the accounts for the financial year 2024-25 are grouped differently from the accounts of that year.

17. The documents now filed go to the root of the matter, and we are of the view that they are required for a proper decision of the application. They are, therefore, admitted under rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963. At the same time, the Tribunal cannot be the first authority to examine vouchers and beneficiary records, verify them with the books, reconcile the figures and, if necessary, cause third party enquiries.

18. The decisions relied upon by the learned AR do not advance the case for an outright direction to grant registration. In Smt. Basanti Devi Foundation (supra), the Tribunal directed registration because the relevant documents were already available and “no further factual verification has been shown to be necessary”. In Dharam Chandan Charitable Trust (supra), the Tribunal noted that the learned DR had not made any strong objection to the evidence filed before the Bench. In the present case, the primary evidence was never before the learned CIT(E) and the figures themselves need reconciliation. The facts are, therefore, distinguishable.

19. We are conscious that this is the second round of proceedings and that the Assessee ought to have produced this material when the matter was first restored. However, the registration of a trust affects its tax position for several years, and the material now produced is substantial. In the interest of justice, we set aside the impugned order and restore the application in Form No. 10AB under sub-clause (iii) of section 12A(1)(ac) of the Act to the file of the learned CIT(E) for a fresh decision on the genuineness of the activities, in accordance with law, after affording a reasonable opportunity of being heard to the Assessee. The Assessee shall produce before the learned CIT(E) the entire material placed in the paper book along with any other evidence it wishes to rely upon, and shall not seek unnecessary adjournments. The learned CIT(E) shall be free to call for any further information and to make such enquiries as he considers necessary. The findings recorded by us in paragraphs 11 to 14 on the objects of the trust and on the source of the donations shall bind the learned CIT(E). We express no opinion on the genuineness of the activities or on the evidence now produced.

20. Ground No. 2 is general in nature and requires no adjudication. Accordingly, the appeal in ITA No. 1095/JPR/2026 is allowed for statistical purposes.

ITA No. 1228/JPR/2026

21. Sub-clause (ii) of clause (ac) of section 12A(1) of the Act provides for an application by a trust or institution that is already registered under section 12AB of the Act, at least six months before the expiry of the period of such registration. The learned CIT(E) rejected the application under this sub-clause solely because the Assessee was not registered under sub-clause (i) or (iii) and its application under sub-clause (iii) had been rejected, including by the order dated 06.03.2026. That order has now been set aside by us, and the application under sub-clause (iii) stands restored for a fresh decision. The foundation of the second impugned order has, therefore, ceased to exist.

22. Whether the Assessee, holding only provisional registration, could apply under sub-clause (ii), and whether the application under sub-clause (ii) would survive or call for any decision depending on the outcome of the application under sub-clause (iii), are questions that the learned CIT(E) has to decide on the facts as they stand after the remanded application is decided. A similar course of restoring a later application for a fresh and independent decision, where the earlier application was pending in appeal, was adopted by the Jaipur Bench of the Tribunal in All India Securitisation and Enforcement of Security Interest Association (supra).

23. Accordingly, the second impugned order dated 06.03.2026 is set aside and the application in Form No. 10AB filed on 29.09.2025 under sub-clause (ii) of section 12A(1)(ac) of the Act is restored to the file of the learned CIT(E) for a fresh decision in accordance with law, after or along with the decision on the restored application under sub-clause (iii), after affording a reasonable opportunity of being heard to the Assessee. The learned CIT(E) shall be at liberty to decide the matter afresh without being influenced by the earlier order. Ground No. 2 is general in nature and requires no adjudication. The appeal in ITA No. 1228/JPR/2026 is allowed for statistical purposes.

24. In the result, both the appeals filed by the Assessee are allowed for statistical purposes.

Order pronounced in the open court on 08.10.2026