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$~7 to 10 * IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of decision: 15^th October, 2026 # CNR No. DLHC010108232026 + ITA 225/2026 & CM APPLs. 17710/2026, 17712/2026 # CNR No. DLHC010108242026 + ITA 226/2026 & CM APPLs. 17713/2026, 17715/2026 PR COMMISSIONER OF INCOME TAX (EXEMPTIONS) DELHI .....Appellant Through: Mr. Shlok Chandra, SSC with Ms.

Naincy Jain, JSC, Mr. Ujjwal Jain &

Mr. Udit Dad, Advs.

versus ORIENTALS ARDAAS FOUNDATION DELHI .....Respondent Through: Mr. Ajay Vohra, Sr. Adv. with Mr.

Abhishek Singhvi, Adv.

# CNR No. DLHC010082042026 + W.P.(C) 2993/2026 # CNR No. DLHC010082632026 + W.P.(C) 3012/2026 ORIENTALS ARDAAS FOUNDATION .....Petitioner Through: Mr. Ajay Vohra, Sr. Adv. with Mr.

Abhishek Singhvi, Adv.

versus COMMISSIONER OF INCOME TAX (EXEMPTIONS), DELHI .....Respondent Through: Mr. Shlok Chandra, SSC with Ms.

Naincy Jain, JSC, Mr. Ujjwal Jain &

Mr. Udit Dad, Advs.

CORAM:

HON'BLE MR. JUSTICE DINESH MEHTA HON'BLE DR. JUSTICE ADITI CHOUDHARY

J U D G M E N T

DINESH MEHTA, J. (ORAL)

1. The present appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act of 1961'), is directed against the order dated 20.08.2025 passed by the Income Tax Appellate Tribunal, Delhi Benches: E: New Delhi (hereinafter referred to as ‘the Tribunal’) in ITA nos. 5079 & 5078/Del/2024, whereby the Tribunal allowed two appeals filed by the respondent-assessee against orders dated 28.09.2024 passed by the Commissioner of Income Tax (Exemption), Delhi (hereinafter referred to as ‘CIT(E)’) under Section 12AB(1)(b)(ii)(B) and 80G(5)(iii)(B)(b) of the Act of 1961.

2. The respondent-assessee, a Company incorporated under Section 8 of the Companies Act, 2013, applied for registration under Section 12A(1)(ac)(iii) of the Act of 1961 so also for registration as an eligible institution to receive donations on which deductions under Section

80G(5)(iii) of Act of 1961 is permissible.

3. While rejecting the applications so filed by the respondent-assessee by two separate orders dated 28.09.2024, the CIT(E) had observed that the nature of the activity of the respondent-assessee appears to be of commercial in nature, as the respondent-assessee would be charging rent for the accommodation to be provided to the occupants on rental basis or there shall be outright sale of the units.

4. The Tribunal heard both the appeals together and after dealing with the object clauses, other relevant material and project proposal of the respondent-assessee concluded that the CIT(E) has erred in recording above finding. The Tribunal held that inference drawn by the CIT(E) was incorrect, inasmuch as, it was too early to draw such an inference regarding the commercial nature of the activities, more particularly, when the activities had not yet commenced.

5. The Tribunal relied upon the material placed on record by the respondent-assessee and set aside the order passed by the CIT(E) and directed the CIT(E) to approve the applications of the respondent-assessee.

6. Mr. Shlok Chandra, learned Senior Standing Counsel for the appellant argued that the Tribunal has committed an error of law in allowing the appeals so filed by the respondent-assessee. He argued that the CIT(E) had rightly rejected the applications filed by the respondent for registration under Section 12A(1)(ac)(iii) of the Act of 1961, inasmuch as the respondent-assessee had taken a stand that it would be charging rental for the accommodation to be provided.

7. He further submitted that the possibility of the respondent outrightly selling the units has also been expressed by the CIT(E), and therefore, the finding that the activities of the respondent-assessee were commercial in nature was correct and infallible. He submitted that the respondent’s project is still underway and unless the project is complete and the same is put into place and practice the operations actually commence, it cannot be said with certitude that the respondent-assessee would be operating for