Smt Shantaben Mithalal Jain Charitable Trust Vs CIT (ITAT Mumbai)
Tax Department Cannot Demand a Certificate It Has Yet to Issue: ITAT Revives Trust’s 80G Application
The Mumbai ITAT set aside the CIT(E)’s order rejecting the charitable trust’s application for regular approval under Section 80G merely because it had not furnished a regular registration certificate.
The trust’s original registration proceedings under the erstwhile regime had earlier been restored by the ITAT to the CIT(E), but the consequential order was still pending. Meanwhile, after receiving provisional registration under the new regime, the trust filed Form 10AB for regular approval. Thus, the certificate demanded by the CIT(E) had not even come into existence because proceedings were pending before the same authority.
The Tribunal observed that there was no adverse finding regarding the trust’s charitable objects, genuineness of activities, utilisation of funds, accounts or substantive eligibility. Rejecting the application solely for failure to produce an unavailable certificate was therefore unjustified.
Following its ruling in Mithalal and Bharat Cricket and Sports Trust, the ITAT restored the matter to the CIT(E) for fresh adjudication on merits, after granting an effective opportunity of hearing and passing a speaking order.
List of Cases Discussed / Relied Upon
- Smt Shantaben Mithalal Jain Charitable Trust Vs CIT (ITAT Mumbai)
- Mithalal and Bharat Cricket and Sports Trust vs. CIT(E)
- Mithalal and Bharat Education and Kalakar Trust, Mithalal and Bharat Cricket & Sports Trust and Mithalal and BharatHealth Trust vs. CIT(E), Pune
- Mithalal and Bharat Education and Kalakar Trust
- Mithalal and BharatHealth Trust
- Ananda Social & Educational Trust v CIT [2020] 114 taxmann.com 693 (SC)
- Principal CIT(E) v. Shri Nathji Goverdhan Nathji Charitable Trust [2020] 120 taxmann.com 256/274 Taxman 498/423 ITR 69 (Cal)
- CIT v. Mumbai Metropolitan Region Development Authority [2020] 115 taxmann.com 71 (Bombay)
- Goa Industrial Development Corpn. v CIT [2020] 116 taxmann.com 42/421 ITR 676/271 Taxman 58 (Bom)
- CIT (Exemptions) v. Shree Durga Mata Mandir [2020] 121 taxmann.com 31/275 Taxman 575 (Punj. & Har)
- CIT v. Divine Shiksha Samiti [2020] 121 taxmann.com 175 (MP)
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal is filed by the assessee against the order of the learned Commissioner of Income Tax (Exemptions), Pune [“Ld. CIT(E)”] dated 27.03.2026 in denying approval u/s 80G of the Act.
2. Learned Counsel for the assessee, at the outset, submitted that the only reason for rejection of approval u/s 80G of the Act by the Ld. CIT(E) was that the assessee failed to produce a copy of the regular registration certificate along with Form 10AC, but furnished only the provisional registration certificate. Learned Counsel for the assessee submitted that the assessee could not furnish a copy of the regular registration/approval obtained prior to 01.04.2021, not due to deliberate omission or non-compliance, but because no such registration had attained finality till the date of filing of the impugned application in Form No. 10AB. Learned Counsel submitted that upon expiry of the provisional period, the assessee filed Form 10AB on 30.09.2025 seeking regular/final registration. However, since the original application filed under the pre-amended provisions had already been restored by the ITAT and the consequential order giving effect to the ITAT direction is still pending before the learned CIT(E), no regular registration certificate under the erstwhile regime had been issued till the date of filing of Form 10AB. Learned Counsel submitted that the assessee has already requested the learned CIT(E) to give effect to the order of the ITAT and the said request is pending adjudication. Therefore, peculiar and transitional circumstances, the assessee was placed in an impossible situation wherein it was called upon to furnish a regular registration certificate which had not yet come into existence due to pendency of proceedings before the very same authority. The non-furnishing of such certificate, therefore, was neither intentional nor attributable to any default on the part of the assessee. Rather, it was a direct consequence of the pendency of the proceedings arising from the order of the ITAT.
3. Learned Counsel for the assessee, therefore, submitted that the rejection of the application solely on the ground of non- furnishing of the regular registration certificate, which was not available with the assessee due to pendency of proceedings before the learned CIT(E), is unjustified and contrary to the principles of natural justice.
4. Learned Counsel further submitted that the Tribunal in ITA Nos. 4357 and 4358/Mum/2026 dated 24.06.2026, in the case of Mithalal and Bharat Cricket and Sports Trust vs. CIT(E), on identical facts, restored the matter to the file of the learned CIT(E) for adjudicating afresh and in accordance with law the application filed by the assessee for approval u/s 80G of the assessee’s case and, therefore, the Tribunal may restore the appeal of the assessee to the file of the learned CIT(E) for considering the application for approval u/s 80G of the Act afresh in accordance with law.
5. Considering the rival submissions and on examining the material placed before us and also the decision of the Tribunal in assessee’s case for the assessment year 2024-25 in ITA No. 4357/Mum/2026 and ITA No. 4358/Mum/2026, dated 24.06.2026, we find considerable merit in the submissions of the learned Counsel for the assessee.
6. On identical circumstances, the Tribunal in the case of Mithalal and Bharat Cricket and Sports Trust vs. CIT in ITAs No. 4357 and 4358/Mum/2026, vide order dated 24.06.2026, set aside the orders of the learned CIT(E) in denying registration u/s 12AB and approval u/s 80G, and restored both the matters for fresh adjudication, observing as under:
“3. The record reveals that the assessee had originally applied for registration under section 12AA of the Act on 24.05.2019. The said application came to be rejected by the learned CIT(E), Pune vide order dated 29.11.2019. Aggrieved by such rejection, the assessee preferred appeal before the Tribunal. The Coordinate Bench of the Tribunal in the case of Mithalal and Bharat Education and Kalakar Trust, Mithalal and Bharat Cricket & Sports Trust and Mithalal and BharatHealth Trust vs. CIT(E), Pune in ITA Nos.1114, 1115 and 1116/Mum/2020 vide learned CIT(E) and restored the matters to his file for fresh adjudication after granting adequate opportunity of hearing to the assessees. Consequently, the original proceedings under the erstwhile registration regime remained pending before the learned CIT(E) for passing consequential orders in accordance with the directions of the Tribunal.
4. In the interregnum, the statutory framework governing registration and approval of charitable institutions underwent substantial change pursuant to the amendments introduced by the Finance Act, 2020 with effect from 01.04.2021. In accordance with the newly introduced registration regime, the assessee migrated to the new framework and filed applications in Form No.10A. Upon due consideration of such applications, the assessee was granted provisional registration and provisional approval under sections 12AB and 80G respectively. Thereafter, upon expiry of the provisional period, the assessee filed Form No.10AB on 30.09.2025 seeking regular/final registration and approval as contemplated under the statutory scheme.
5. The grievance of the assessee before us is that the learned CIT(E) rejected both the applications primarily on the groundthat the assessee had not furnished the copy of regular/final registration or approval. It has been contended that no afforded before passing the effective opportunity impugned orders and, as reflected from the e-proceeding records placed in the paper book, no notice or requirement calling upon the assessee to remove any alleged defect was effectively served. It has further been pointed out that the learned CIT(E) has nowhere recorded any dissatisfaction regarding the charitable objects of the trust, genuineness of its activities, maintenance of accounts, utilisation of funds or compliance with any of the substantive statutory conditions governing grant of registration under section 12AB or approval under section 80G.
6. The learned counsel drew our attention to the peculiar factual situation obtaining in the present case and submitted that the consequential proceedings arising from the aforesaid Tribunal order dated 30.08.2021 were themselves pending before the learned CIT(E). Consequently, no order granting regular registration under the erstwhile regime had been passed and no regular registration certificate had come into existence till the date on which Form No.10AB furnish a document which was itself unavailable owing to the pendency of proceedings before the very same authority. It was submitted that the non-furnishing of such certificate was neither deliberate nor attributable to any lapse or default on the part of the assessee, but was a direct consequence of the peculiar procedural history of the case arising from the Tribunal’s remand order and the subsequent migration to the new registration regime introduced from 01.04.2021. It was accordingly contended that the applications could not have been rejected merely because the assessee was unable to furnish a document which had not come into existence on account of pending proceedings before the department itself.
7. We have carefully considered the rival submissions and perused the material available on record. A perusal of the impugned orders shows that the rejection of the applications is founded substantially upon non- furnishing of the regular/final registration certificate. At the same time, we find that no adverse finding has been recorded by the learned CIT(E) with regard to the charitable nature of the objects of the trust, genuineness of activities, utilisation of funds, maintenance of accounts or violation of any statutory requirement governing grant of registration under section 12AB or approval under section 80G. The impugned orders do not indicate any examination of the substantive eligibility of the assessee for registration and approval under the provisions of the Act.
8. What assumes significance in the present case is that the assessee had already succeeded before the Tribunal in ITA Nos. 1114, 1115 and 1116/Mum/2020 vide order dated 30.08.2021 whereby the earlier rejection orders were set aside and the matters were restored to the file of the learned CIT(E) for fresh adjudication. The consequential proceedings pursuant to the said order admittedly had not culminated into issuance of any regular registration certificate under the erstwhile regime. Thus, when the assessee filed Form No.10AB under the new statutory framework, the very document whose absence has formed the basis of rejection was itself not available with the assessee. The explanation furnished by the assessee, therefore, cannot be said to be lacking in substance. Rather, it emanates from the peculiar transition from the old registration regime to the new regime coupled with the pendency of proceedings before the departmental authorities factual background, which goes to the root of the matter, was duly appreciated while rejecting the applications.
9. We further find merit in the contention of the assessee that despite the detailed material placed on record, including trust deed, financial statements, registration documents and other supporting evidences, the applications have not been examined on the touchstone of the statutory parameters prescribed under sections 12AB and 80G. Once provisional registration and provisional approval had already been granted and no adverse finding has been recorded regarding the objects or genuineness of activities, the applications seeking regular registration and approval deserved to be examined on their own merits after affording due and effective opportunity of hearing. Such exercise has not been undertaken in the present case.
10. Considering the entirety of the facts and circumstances, particularly the earlier order of the Tribunal dated 30.08.2021 restoring the matter to the file of the learned CIT(E), the pendency of consequential proceedings arising therefrom, the non-availability of any regular registration certificate under the erstwhile regime, the absence of any adverse finding regarding the charitable character of the trust or genuineness of its activities and the requirements of fair adjudication, we are of the considered view that the impugned orders cannot be sustained in their present form. In the interest of substantial justice, the matter requires fresh examination by the learned CIT(E) after taking into consideration the entire factual background and the explanations furnished by the assessee.
11. Accordingly, we set aside the impugned orders passed by the learned CIT(E) and restore both the matters to his file foradjudication afresh in accordance with law. The learned CIT(E) shall provide due and effective opportunity of hearing to the assessee, consider all documents and explanations that may be furnished and thereafter decide the applications by way of a speaking order in accordance with law. The assessee is also directed to extend full cooperation and furnish all details and documents as may be required during the course of the fresh proceedings.”
7. Facts being identical, we set aside the order of the Ld. considering the application of the assessee for approval u/s 80G of the Act afresh in the light of the observations of the Tribunal in the case of Mithalal and Bharat Cricket and Sports Trust vs. CIT(E) (supra), after providing adequate opportunity to the assessee, the assessee shall cooperate with the proceedings before the Ld. CIT(E) by filing the necessary details.
8. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 21/08/2026
