Delhi HC Questions I-T Dept. Over Cancellation of Harsh Mander’s NGO Registration, Asks if Credit Checks Needed for Just Rs. 5,000

On Tuesday, the Delhi High Court questioned the Income Tax Department, asking whether it is fair to check the creditworthiness of a person who makes small, voluntary donations to non-government organisations (NGOs).

This question was raised during a hearing on a petition filed by Harsh Mander’s NGO, Aman Biradari Trust (ABT). The case was against the cancellation of its income tax registration. The court seemed to feel that such strict checks for small donations don’t make sense.

The Aman Biradari Trust (ABT) registration was cancelled in September 2024, as per the Income Tax Act. Before the High Court, the NGO is requesting that this cancellation order be revoked. ABT, a public charity trust founded by Mander, was first formed in 2005 and then again in 2022.

Aman Biradari Trust (ABT) visited the Delhi High Court in March 2025, challenging the Trust’s registration cancellation order of September 23, 2024, under the I-T Act in 2005, in addition to the subsequent registration in 2022 under the Finance Act 2020.

The Income Tax Department said they cancelled the registration of Aman Biradari Trust (ABT) because of two specific rule violations.

The first violation is that, for some donations received in the years 2017-18, 2018-19, and 2019-20, the Trust did not keep proper records of the donors’ PAN numbers and addresses, which is required by the Income Tax law.

The Income Tax Department has asked Aman Biradari Trust (ABT) to pay over Rs. 3.92 crore in the form of tax for the financial years 2012 to 2020. This tax demand was sent in November 2024, but ABT has already challenged it in court (at the Income Tax Appellate Tribunal, or ITAT). On Tuesday, a bench of judges, Justice Vibhu Bakhru and Justice Tejas Karia, looked into the case.

During the hearing, Justice Bakhru questioned the Income Tax Department’s logic. He said, “The problem you’re raising is that some donations don’t have PAN numbers. But they did give you the names of the donors. And these are small donations, like Rs. 5,000. Do you really expect people to prove their financial strength (creditworthiness) just to donate such small amounts?”

He was basically saying: It seems unfair to demand full financial details for every small donor.

The court also noted that, at first glance, the work ABT is doing matches the goals listed in its official documents, meaning it looks like the Trust is sticking to its purpose, despite some technical issues.