Fire Safety Compliance as a Key Factor in Section 12AB Registration for Educational Institutions: Analysis of New Horizon English School Vs CIT (ITAT Bangalore)

Background of the Dispute

The decision in New Horizon English School Vs CIT (ITAT Bangalore) examines how Section 12AB operates in the post-1 April 2021 regime, particularly the requirement that charitable institutions comply with other laws that are material to the achievement of their stated objects. The case focuses on a school seeking registration as a charitable institution and the role of fire-safety and building-related compliances in that process.

The assessee, New Horizon English School, approached the Commissioner of Income Tax (Exemptions), Bangalore [CIT(E)] by filing Form 10AB on 29 March 2025, seeking registration under Section 12AB read with Section 12A(1)(ac)(vi)(B) of the Income Tax Act 1961. The primary object of the trust was education, which falls within the definition of “charitable purpose” in Section 2(15).

The CIT(E) rejected the assessee’s application, which led to an appeal before the Income Tax Appellate Tribunal, Bangalore Bench. The Tribunal ultimately did not grant registration itself but remanded the matter to the CIT(E) for a fresh examination.

Grounds of Appeal Filed by the Assessee

The assessee challenged the order of the CIT(E) dated 30 September 2025, raising several key contentions, including:

  • The rejection order allegedly ignored the documents, explanations and evidences submitted during the proceedings.
  • The CIT(E) concluded that the assessee failed to prove the genuineness of its activities, despite the fact that the assessee was solely engaged in running a school.
  • The finding that the assessee admitted to operating without statutory approvals was disputed as being factually incorrect and contrary to the record.
  • The assessee contended that it had already furnished a fire-safety compliance report and rental agreement, which should have sufficed given that the institution functioned from rented premises.
  • It was argued that documents like sanctioned building plan or property ownership approvals lay with the landlord, and therefore non-production by the tenant-school could not be equated with non-compliance.
  • The assessee objected to the CIT(E) questioning its identity on the basis of a supplementary trust deed, stating that the supplementary deed merely recorded a change in trustees without altering the trust’s name or legal character.

The assessee also reserved the right to add, modify, or withdraw any grounds at the time of hearing.

Facts Considered by CIT(E)

During the course of the proceedings on the registration application:

  1. The assessee explained that its predominant object was education, and it was operating a school as its principal activity.
  2. The CIT(E) issued a show-cause notice on 14 September 2025, calling for details to be produced on 22 September 2025.
  3. The CIT(E) highlighted that running a school entails a high degree of responsibility regarding the safety and security of students, teaching staff and other personnel.
  4. On this basis, the CIT(E) treated compliance with:
    • local municipal laws,
    • building regulations, and
    • fire-safety norms
      as material conditions for carrying out educational activities lawfully and safely.
  5. According to the CIT(E), these were not mere procedural requirements; non-compliance could result in closure orders from the competent statutory authorities, thereby disrupting the functioning of the trust and its objects.
  6. The assessee was asked to produce:
    • approved building plan,
    • building safety certificate, and
    • fire-safety certificate.

The assessee did not produce all of these documents to the satisfaction of the CIT(E).