[Cites 5, Cited by 0]
Rajasthan High Court - Jodhpur
C.I.T. Central, Udaipur vs M/S Harpawat Charitable Trust ... on 21 January, 2026
Author: Yogendra Kumar Purohit
Bench: Yogendra Kumar Purohit
[2026:RJ-JD:4290-DB]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
D.B. Income Tax Appeal No. 235/2014
Commissioner of Income Tax, Udaipur
----Appellant
Versus
M/s Harpawat Charitable Trust 30-C, Madhuban, Behind Lok Kala
Mandal, Udaipur
----Respondent
For Appellant(s) : Mr. K.K. Bissa with
Mr. G.S. Chouhan
For Respondent(s) : Mr. Anjay Kothari
HON'BLE MR. JUSTICE ARUN MONGA
HON'BLE MR. JUSTICE YOGENDRA KUMAR PUROHIT
Order
21/01/2026
1. The instant appeal has been filed under Section 261 of the
Income Tax Act, 1961 by the Income Tax Department being
aggrieved of order dated 22.05.2014 passed by the learned
Income Tax Appellate Tribunal, Jodhpur Bench, Jodhpur whereby
the registration certificate of exemption from Income Tax granted
to the respondent trust was restored by setting aside the order
dated 10.03.2014 passed by the Commissioner of Income Tax.
2. The relevant part of the impugned order dated 22.05.2014
passed by the learned ITAT is extracted herein below:
"5. We have found that the bone of contention between the assessee-trust and
the revenue, which has propelled the ld. CIT (A) to withdraw/cancel
registration already granted u/s 12A is mainly the existence of MOU. The
objects of the Trust are still considered to be charitable in nature. It is the
conduct, as per the department, of the settler and the Managing Trustee, in
which they conducted themselves in executing the alleged MOU which has
changed the charitable purpose to non charitable one. We may mention that no
irregularity in the imparting of education via its secondary school or the B Ed.
College has been alleged.
6. After considering the rival submissions with regard to the validity of the
MOU [copy enclosed at paper book pages 4-48] dated 26.11.2006, we are also
(Uploaded on 28/01/2026 at 04:32:23 PM)
[2026:RJ-JD:4290-DB] (2 of 4) [ITA-235/2014]
convinced that this is simply a waste paper. It has not been The MOU suffers
from various requirements. witnessed by the two independent witnesses. This
MOU is between Dr. Ganesh Harpavat and Mr. Nirmal Bhandari. This MOU
has nothing to do with the appellant trust. We are satisfied that there is no iota
of proof regarding the fact that the Board of Trustees have neither authorized
nor approved. This MOU has not even been acted upon. We have found that Dr
Ganesh Harpavat had no right, power competence or authority to execute such
a MOU for and on behalf of and on account of the assessee-trust. This MOU,
apparently, is a document which can, at best, bind two individuals but not the
assessee-trust. There is no evidence to a whit to establish that there has been
sharing of income of Indo-American Public School. Moreover, Shri Nirmal
Bhandari had resigned w.e.f. 1 May, 2014 and since then he is not the chairman
of the trust. On knowing about this MOU Dr. Kiran Harpavat the co-author of
the trust deed, has exclaimed the existence of the same and has even attributed
motives to Mr. Nirmal Bhandari. Subsequently, vide letter dated 3.5.2001. Ld
DR. Ganesh Harpavat has also revoked and cancelled this MOU in its entirety.
Thus, we are not convinced that through this MOU they shared any profit from
the income of the schools. We are convinced that the trust is being run for
charitable purpose only. The trust is being run for imparting education without
any profit motive. Therefore, there is no violation of the provisions of section
13(3) of the Act. Regarding the show cause notice from FERA seems to be non-
issue as no action has been taken thereon after the reply filed from the side of
the Trust. The post dated stamp paper on which the deed was typed a fresh
seems to be palpable explanation and no adverse inference should be drawn
from this fact. Therefore, we have found that the activities of the Trust are being
carried out only for charitable purpose and not for the personal benefit of the
founder and the Chairman. We have found that there is no violation of section
13(3) of the Act. The cash withdrawals made have also been properly
explained. Why the cash withdrawals were not utilized towards the activities of
the Trust has not been well reasoned by the Id. CIT(A). The default under
FCRA has been properly explained to the concerned authority and the CIT.
Having come to the above conclusion, we will not enter into the nitty-gritty of
whether the registration granted in the year 1991 can be cancelled under the
new provision or not. Accordingly, we set aside the order of the ld. CIT(Admn.)
dated 10.3.2014 passed u/s 12AA(3) r.w.s. 293C cancelling the registration
granted u/s 12A vide order dated 25.05.1991. We restore the registration dated
25.05.1991 and allow the appeal of the assessee-trust."
3. Against the aforesaid view of ITAT, the instant appeal was
admitted vide order dated 19.08.2015 by framing following
question of law:
"Whether on the facts & circumstances of the case and in law, the ITAT was
justified in setting aside order of CIT (Admn.) dt. 10.03.2014 confirming order
of the Assessing Officer withdrawing/cancelling the registration granted u/s
12A of the Act vide order dt 25.05.1991 & what will be the consequential
effect of cancellation of registration ?"
4. We have heard the rival contentions and perused the case
file.
(Uploaded on 28/01/2026 at 04:32:23 PM)
[2026:RJ-JD:4290-DB] (3 of 4) [ITA-235/2014]
5. The respondent is a charitable trust and was registered for
exemption of Income Tax under Section 12A of the Income Tax
Act, 1961. The underline presumption, no doubt throughout is that
the said exemption is valid only for the purposes of carrying out
the activities, as per the objectives of the trust.
6. A perusal of the impugned ITAT order, ibid, would reveal that
factual finding returned by the learned ITAT does not reveal that
there is any violation of the objectives of the trust while carrying
out its activities.
7. Trite it is that the factual findings returned by the learned
ITAT cannot be interfered with in exercise of power under Section
260A of the Income Tax Act, 1961 which is meant only to
adjudicate the substantial questions of law.
8. In this respect, reference may be had to another Division
Bench Judgment rendered by this Court in the case of The
Commissioner of Income Tax-Exemption, Jaipur Vs. Shri
Baba, Balak Nath Seva Sansthan; 1 wherein opining for this
Court, it was held as under:
"4. The ITAT has come to a factual finding that the objects mentioned in the
deed are not in the nature of business or commercial and secondly, the trust
has not carried out any such activity. The ITAT has also come to a factual
finding that the statement of income and expenditure account for the last five
years also does not indicate that any such activity has ever been carried out.
It is settled law that if the authority is coming to a finding that the objects in
the deed are commercial or business in nature, then they should also give a
finding that the dominant intention of the trust or the institution is profit
making. That is not the case and that is also not reflected from the income
and expenditure account.
5. As regards the alleged activities carried out by the assessee not to be in
accordance with the objects of the trust, there is a factual finding that the
events were organized by one Ms. Ritu Agarwal, as mentioned in the
pamphlet and the ITAT came to a factual finding that it cannot be stated that
any activity was conducted by the assessee trust against its objectives.
6. In the circumstances, no substantial question of law arises. Appeal
dismissed."
1 D.B. Income Tax Appeal No.60/2025, Rajasthan High Court, Jaipur
(Uploaded on 28/01/2026 at 04:32:23 PM)
[2026:RJ-JD:4290-DB] (4 of 4) [ITA-235/2014]
9. We are in respectful agreement to the aforesaid view taken
by Division Bench of this Court at Jaipur.
10. Even otherwise, having perused the impugned order and
judgment passed by learned ITAT, we also find that there is no
perversity in returning the findings therein, as same are based on
cogent reasoning and after due appreciation of evidence which
was adduced/placed before the learned ITAT. Thus, neither there is
any irregularity in law nor on facts warranting interference by this
Court.
11. Accordingly, we find the instant appeal to be bereft of any
merit and the same is hereby dismissed.
(YOGENDRA KUMAR PUROHIT),J (ARUN MONGA),J
60-Devanshi/-
(Uploaded on 28/01/2026 at 04:32:23 PM)
Powered by TCPDF (www.tcpdf.org)
