Cwp No. 5279 of 2023 · Punjab And Haryana High Court · 2026

Mr. Sahil R. Bakshi, A.A.G., Punjab. *** KULDEEP TIWARI, J. (ORAL)

#1. Through the instant writ petition, the petitioner-Trust has laid challenge to the order dated 13.07.2017 passed by the District Collector, whereby a sum of ₹5,70,938/- was determined as deficit stamp duty and registration fee in respect of Sale Deed dated 10.05.2013, with a direction to deposit the said amount within a period of three months, failing which the same was ordered to be recovered along with interest at the rate of 9% per annum. Challenge has also been laid to the order dated 12.10.2022 passed by the Divisional Commissioner, whereby the appeal preferred by the petitioner was dismissed.

#2. Learned counsel for the petitioner submits that the petitioner is a charitable trust running more than 100 educational institutions and imparting free education to poor and underprivileged students. It is contended that, being a charitable institution, the petitioner is entitled to CWP-5279-2023 2 exemption from payment of stamp duty and registration fee. However, while declining such exemption in terms of the notification dated 20.02.1981 (Annexure P-5), the competent authority erroneously concluded that, since the petitioner is not registered under the Charitable Endowments Act, 1890 (hereinafter referred to as “the Endowment Act”), it is not entitled to claim the benefit of exemption. It is further submitted that neither the statute, nor the rules, nor the instructions in vogue mandate registration of a charitable trust under the Endowment Act as a pre-condition for claiming exemption from payment of stamp duty or registration fee. It is also contended that the instructions dated 29.08.2014 (Annexure P-6) have no application to the present case, as the sale deed in question was executed in the year 2013.

#3. Per contra, learned State counsel submits that the competent authority has returned a categorical finding that the petitioner-Trust is not carrying on any charitable activity and, therefore, is not entitled to claim exemption under the notification dated 20.02.1981 (Annexure P-5). It is submitted that the petitioner was required to establish before the competent authority, by leading cogent evidence, that it is, in fact, a charitable institution. Since the petitioner failed to discharge the said burden, it has rightly been directed to pay the deficient stamp duty and registration fee.

#4. This Court has considered the rival submissions advanced by learned counsel for the parties and has perused the record. The facts, shorn of unnecessary details, are that the petitioner-Trust purchased land measuring 26 Bighas and 2 Biswas situated in Village Manal, Sub-Tehsil Mehal Kalan, District Barnala, vide Sale Deed No.175 dated 10.05.2013. During the course of an audit of the office of the concerned Sub-Registrar, a CWP-5279-2023 3 deficiency of ₹5,70,938/- towards stamp duty and registration charges in respect of the said sale deed was noticed. Consequently, the matter was referred by the Sub-Registrar to the Collector on 16.02.2015 under Section 47-A of the Indian Stamp Act, 1899 (hereinafter referred to as “the Stamp Act”). Pursuant thereto, the Collector initiated proceedings and, vide the impugned order dated 13.07.2017, directed the petitioner to deposit ₹5,70,938/- towards deficient stamp duty and registration fee within a period of three months. Aggrieved thereby, the petitioner preferred a statutory appeal, which too was dismissed vide order dated 12.10.2022. Hence, the instant writ petition.

#5. What emerges from a perusal of the record is that the petitioner-Trust has been granted approval under Section 80G of the Income Tax Act, in recognition of its charitable character. It is also the petitioner’s case that it is running more than 100 educational institutions and imparting free education to poor and underprivileged students.

#6. The Government of Punjab, in exercise of the powers conferred under Sections 78 and 79 of the Registration Act, 1908, issued notification dated 20.02.1981 (Annexure P-5), amending the earlier notification dated

15.04.1980, whereby exemption from registration fee was extended to instruments of sale or gift executed in favour of charitable institutions. The note appended to the notification stipulates that a charitable institution means an institution established for a charitable purpose within the meaning of the Endowment Act. The relevant extract of the notification reads thus:- “Provided further that no registration fee shall be chargeable on the following instruments of transfer of land:- (1) Instrument of sale or of gift executed by or on behalf of or in favour of a Gram Panchayat or a Municipal Committee; CWP-5279-2023 4 (2) Instrument of a sale or of gift executed in favour of a charitable institution; (3) Instrument of sale executed by Government; and (4) Instrument of exchange executed by the Gram Panchayat with any person, for the purpose of construction of roads or buildings of schools, colleges, hospitals and dispensaries on such land. Note:- Charitable Institution means Institution established for charitable purpose within the meaning of the Charitable Endowment Act, 1890 (Central Act of 1890).” Although the sale deed in question was executed and registered

#7. in the year 2013, the Government of Punjab subsequently issued clarificatory instructions dated 29.08.2014 (Annexure P-6), authorizing the Sub-Registrar to determine whether a trust or institution is entitled to exemption from stamp duty under the relevant notification. The relevant portion of the said instructions reads as under:- “...But it should be ensured that the Joint Registrar/Joint Sub- Registrar in exercise of this duty decides the proceedings only on the basis of the following points: 1) The memorandum and articles of association of the organization include charitable activities, and 2) The organization has been in existence for at least 3 years, at least 2 charitable activities should also be taken done, and 3) Such charitable proceedings are exempted from stamp duty, and 4) One fourth portion of the income is spent on charitable activities. No specification can be given in this regard, but it is felt that at least 2/3 part should be spent on such work. 4. The language of charitable purposes is given under Charitable Endowments Act, 1890. It is clarified that any organization collecting less than stamp duty will have to prove the above reasons with documentary evidence.” The hereinabove extracted portion of the instructions makes it

#8. clear that the definition of charitable purpose, as contained in the Endowment Act, has been adopted only as a guiding criterion for determining whether a trust or institution is engaged in charitable activities.

#9. A conjoint reading of the notification dated 20.02.1981 and the clarificatory instructions dated 29.08.2014 makes it clear that registration of CWP-5279-2023 5 a trust or institution under the Endowment Act is not a mandatory requirement for claiming exemption from stamp duty or registration fee. In the present case, however, the District Collector has proceeded to determine the deficiency in stamp duty and registration fee solely on the ground that the petitioner-Trust is not registered under the Endowment Act, without undertaking any examination as to whether the petitioner otherwise satisfies the test of a charitable institution. Consequently, the order dated 13.07.2017 passed by the District Collector cannot be sustained. The appellate order dated 12.10.2022 passed by the Divisional Commissioner, having adopted the same reasoning, is equally unsustainable in law.

#10. Consequently, the impugned orders are set aside, and the matter is remanded to the District Collector for a fresh decision. The District Collector shall afford the petitioner adequate opportunity to establish that it is engaged in charitable activities within the meaning of the applicable notification and shall take a final decision within six months from the date of receipt of a certified copy of this order.

#11. Disposed of accordingly. July 13, 2026 devinder (KULDEEP TIWARI) JUDGE Whether speaking/reasoned : : Whether Reportable Yes/No Yes/No