The Jaipur ITAT directed the CIT(E) to grant registration to Jamna Devi Shikshan Sansthan, holding that an increase in rent paid to specified persons could not, by itself, establish that an undue benefit had been conferred under Section 13(1)(c).
The society was running a co-educational English-medium senior secondary school in rented premises. The monthly rent was increased from ₹70,000 in FY 2022–23 to ₹1,00,000 in FY 2023–24. The CIT(E) treated the enhanced rent as a benefit to persons specified under Section 13(3) and rejected the Form 10AB application.
The Tribunal noted that the earlier rent covered only the basement and ground floor. Subsequently, the first and second floors were constructed and an amended lease deed was executed. The society had furnished the lease deeds, resolutions approving the rent increase, rent ledgers, TDS details and particulars of the additional area.
The CIT(E) had neither properly examined these documents nor disputed the society’s educational objects and activities. Therefore, without examining the additional construction and prevailing rental value, it could not merely be presumed that excessive rent had been paid to benefit specified persons.
The Tribunal accordingly held that Section 13(1)(c) cannot be invoked on assumptions to deny registration when the charitable objects and activities are undisputed. It set aside the CIT(E)’s order and directed that registration be granted.
The Jaipur ITAT directed the CIT(E) to grant registration to Jamna Devi Shikshan Sansthan, holding that an increase in rent paid to specified persons could not, by itself, establish that an undue benefit had been conferred under Section 13(1)(c).
The society was running a co-educational English-medium senior secondary school in rented premises. The monthly rent was increased from ₹70,000 in FY 2022–23 to ₹1,00,000 in FY 2023–24. The CIT(E) treated the enhanced rent as a benefit to persons specified under Section 13(3) and rejected the Form 10AB application.
The Tribunal noted that the earlier rent covered only the basement and ground floor. Subsequently, the first and second floors were constructed and an amended lease deed was executed. The society had furnished the lease deeds, resolutions approving the rent increase, rent ledgers, TDS details and particulars of the additional area.
The CIT(E) had neither properly examined these documents nor disputed the society’s educational objects and activities. Therefore, without examining the additional construction and prevailing rental value, it could not merely be presumed that excessive rent had been paid to benefit specified persons.
The Tribunal accordingly held that Section 13(1)(c) cannot be invoked on assumptions to deny registration when the charitable objects and activities are undisputed. It set aside the CIT(E)’s order and directed that registration be granted.
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Posted on: August 29th, 2026
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