International Will Trust Vs CIT (Exemptions) (ITAT Chandigarh)
The assessee-trust challenged the order dated 13.10.2025 passed by the Commissioner of Income Tax (Exemptions) rejecting its application in Form No. 10AB for regular registration under Section 12AB of the Income-tax Act, 1961, for AY 2025-26. During the registration proceedings, the CIT(E) examined documents concerning the genuineness of the trust’s activities, the manner in which its objects were pursued and compliance with the Act. The predominant activity was found to be providing transportation facilities to students of St. Xavier’s School, Chandigarh, against collection of transportation charges. The financial statements also showed recurring surplus from the activity. The CIT(E) consequently held that the trust was rendering transport services on commercial lines and that the activity did not constitute a “charitable purpose” under Section 2(15), and rejected registration under Section 12AB.
Before the ITAT, the assessee argued that transportation was an integral and indispensable facility for education, particularly for students travelling from distant places, and that its activities were incidental to and in furtherance of the charitable object of education. It further submitted that, while considering Section 12AB registration, the Commissioner should examine the objects and genuineness of activities rather than the quantum of surplus or commercial viability. Reliance was placed on the Supreme Court’s decision in Ananda Social and Educational Trust. The Departmental Representative supported the rejection, submitting that the assessee neither ran an educational institution nor imparted education and merely provided transportation services to students for consideration, generating recurring surplus.
