Delhi HC Pulls Up Income Tax Dept Over Cancellation of Harsh Mander’s NGO’s Registration
Court Questions Creditworthiness Requirement for Small Donations
By Author | April 24, 2025 | Delhi High Court, Income Tax Recent News – 2025
📜 Background: ABT’s Registration Cancellation
The Delhi High Court questioned the Income Tax Department’s decision to cancel the Aman Biradari Trust’s (ABT) registration under the Income Tax Act. The Trust, founded by former IAS officer Harsh Mander, challenged this cancellation, which occurred in September 2024.
ABT initially registered as a public charitable trust in 2005, and the registration was renewed in 2022. The cancellation order cited two violations: non-maintenance of PAN details for some voluntary contributions and receiving anonymous donations.
💰 Alleged Violations and Tax Demand
The first violation concerns voluntary donations received by ABT in FY 2017-18, FY 2018-19, and FY 2019-20. The department claims ABT failed to maintain PAN details for these donations, totaling over ₹92 lakh. The tax demand raised amounts to ₹3.92 crore.
The second violation revolves around ABT’s media fellowship program, which the department argues is outside the Trust’s stated objectives.
⚖️ Court’s Observations and Reactions
While addressing the I-T Department’s counsel, Justice Vibhu Bakhru raised concerns about the fairness of requiring “creditworthiness” from donors giving amounts as small as ₹5,000. He questioned whether the department would demand such documentation for voluntary, nominal contributions.
The court also observed that the Trust’s activities, including media fellowships, appeared to align with its objectives. Justice Bakhru emphasized that the Trust’s activities did not seem to violate its purpose, as outlined in the Trust’s deed.
📑 Trust’s Defense
ABT argued that the I-T Department’s cancellation was not valid, particularly because the alleged violations occurred in earlier financial years. The Trust stated that Section 12AB(4) of the I-T Act could only apply to specified violations in the most recent financial year, 2022-23, which did not apply in this case.
Furthermore, ABT contended that it was not obligated to maintain PAN details for voluntary contributions before the Finance Act, 2021, made such requirements mandatory. The Trust also submitted that it had cooperated fully with the authorities, providing donor information when requested.
⚠️ Media Fellowship Program Controversy
Regarding the media fellowship, ABT’s counsel defended it, stating that its purpose aligned with the Trust’s core objectives. The program aimed to promote secular and humanistic values, which fit within ABT’s charitable aims.
🕒 Next Steps
The High Court suggested that ABT consider pursuing alternative remedies through the Income Tax Appellate Tribunal (ITAT). The matter has been scheduled for further hearing on August 5, 2025.
