Mercy Home Vs ITO (ITAT Guwahati Bench)
One Valid 80G Approval Makes the Second Rejection Meaningless: Guwahati ITAT Quashes CIT(E)’s Later Order
Summary: The assessee, Mercy Home, was a charitable institution seeking approval u/s 80G. It was initially granted provisional approval u/s 80G(5)(iv) through an order dated 11 March 2023, valid from 11 March 2023 up to AY 2025-26.
Subsequently, the assessee obtained another certificate dated 15 November 2024, granting approval for AYs 2023-24 to 2027-28. This later certificate continued to remain valid & had neither been withdrawn nor cancelled by the Department.
Despite the subsisting certificate, the assessee filed Form 10AB electronically on 2 September 2025, seeking regular approval u/s 80G(5)(ii). The CIT(E), Kolkata, examined the application with reference to the earlier provisional approval dated 11 March 2023.
The CIT(E) observed that the assessee had commenced its charitable activities much earlier. It was therefore required to file Form 10AB within the extended due date of 30 June 2024, as permitted by CBDT Circular No. 7/2024, or at least six months before expiry of the provisional approval, as applicable.
Since Form 10AB was filed only on 2 September 2025, the CIT(E) treated it as belated & rejected the application through an order dated 17 March 2026. The assessee challenged the rejection before the Tribunal.
Issue before the Tribunal
The principal issue was whether the CIT(E) was justified in rejecting the Form 10AB application as time-barred by considering only the provisional certificate dated 11 March 2023, while ignoring the subsequent final certificate dated 15 November 2024 granting approval up to AY 2027-28.
A connected issue was whether the appeal for AY 2026-27 had become infructuous because approval for that year was already covered by the subsisting certificate dated 15 November 2024.
The assessee also raised broader grounds challenging rejection on technical grounds, absence of proper opportunity & failure to examine its activities, finances & charitable objects. However, the Tribunal found it unnecessary to adjudicate those grounds after considering the later approval certificate.
Assessee’s submissions
The assessee contended that there was no effective delay in seeking approval because the CIT(E) had relied upon an outdated provisional registration certificate. Though provisional approval was initially granted on 11 March 2023, a subsequent certificate dated 15 November 2024 granted approval for AYs 2023-24 to 2027-28.
Therefore, the assessee already possessed a valid approval covering AY 2026-27 when the CIT(E) passed the impugned order. The later certificate had not been cancelled & continued to operate.
The assessee argued that the CIT(E) wrongly rejected Form 10AB without considering the later approval or identifying any deficiency in its activities, objects or financial affairs. It accordingly sought quashing of the rejection order.
Revenue’s contentions
The Revenue relied upon the filing requirements applicable to institutions holding provisional approval u/s 80G. Since the assessee had already commenced activities, it was required to file Form 10AB within the statutory or extended time limit.
According to the CIT(E), the application filed on 2 September 2025 was beyond the extended deadline of 30 June 2024 & was also not filed within the period calculated from the original provisional approval. The rejection was therefore sought to be supported on limitation.
Tribunal’s findings & legal reasoning
The Tribunal examined the two approval certificates & found that the final certificate dated 15 November 2024 granted approval from AY 2023-24 to AY 2027-28. There was nothing on record to show that this certificate had subsequently been cancelled or withdrawn.
Consequently, the assessee already held valid approval for AY 2026-27, which was the assessment year mentioned in the appeal. Since the relief sought was already available under the subsisting final certificate, the appeal for AY 2026-27 had become infructuous.
However, the Tribunal did not permit the CIT(E)’s later rejection order dated 17 March 2026 to remain on record. It observed that cancellation or denial relating to the earlier approval period could not be justified when a later & wider approval certificate continued to subsist.
The Tribunal therefore quashed the order dated 17 March 2026 insofar as it purported to cancel or deny approval for the period commencing from 11 March 2023 up to AY 2025-26. Ground No. 5, specifically challenging the order as having been passed on incorrect facts by ignoring the later certificate, was allowed.
The remaining grounds relating to limitation, opportunity of hearing & merits of the charitable activities were not adjudicated because they had become irrelevant after recognition of the subsisting certificate.
Accordingly, the appeal was partly allowed.
Practical implications
The decision highlights the need for the CIT(E) to examine the institution’s complete registration history before rejecting Form 10AB. An application cannot be decided solely with reference to an earlier provisional certificate while ignoring a subsequent final approval covering the same period.
Charitable institutions should maintain copies of every Form 10AC, Form 10AD, approval order & URN. Where overlapping or inconsistent certificates appear on the portal, the later certificate must be specifically brought to the authority’s attention.
The ruling also clarifies that a later valid certificate does not merely make the dispute academic; any contradictory rejection or cancellation order should be quashed to prevent future uncertainty for the trust, donors or return processing.
Most importantly, the Tribunal did not grant a fresh approval on merits. It protected the approval already granted & continuing in force. The governing principle is that a subsisting final 80G approval cannot be nullified indirectly by a later order passed in ignorance of that very certificate.
Cases Discussed
- GKN Driveshafts (India) Ltd. v. ITO — Supreme Court decision referred to in the supplied case summary concerning disposal of objections to reopening by a speaking order.
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT GUWAHATI ‘DB’ BENCH AT KOLKATA
This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Exemption), Kolkata (hereinafter referred to as Ld. ‘CIT(E)’) agaisnt denial of registration u/s 80G of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 17.03.2026.
2. The assessee is in appeal before the Tribunal raising the following grounds of appeal:
“1. On the facts and circumstances of the case the learned Commissioner of Income tax (Exemption) was not justified in rejecting the application in Form 10AB for grant of registration u/s 80G of the IT Act without properly appreciating the facts of the case and was against the principles of natural justice.
2. On the facts and circumstances of the case the learned Commissioner of Income tax (Exemption) was not justified in rejecting the application in Form 10AB for grant of registration u/s 80G of the IT Act merely on the technical grounds and without pointing out any deficiency in the activities, financial and objects of the trust.
3. On the facts and circumstances of the case the learned Commissioner of Income tax (Exemption) was not justified in rejecting the application in Form 10AB for grant of registration u/s 80G of the IT Act merely on the ground of delay in filing the form 10AB whereas there is no delay in filing the form as it was within the time limit prescribed under the provision of section 80G(5) (iii) of the Act.
4. On the facts and circumstances of the case the learned Commissioner of Income tax (Exemption) was not justified in rejecting the application in Form 10AB for grant of registration u/s 80G of the Act on the ground that appellant was required to file application in Form No. 10AB u/s 80G(5)(iii) of the Act within the time period of at least six months prior to expiry of period of the provisional approval or within six months of commencements of its activities, whichever is earlier without appreciating that order was passed on the basis of provisional registration dated 11/03/2023, which was valid for the period from 11/03/2023 to A.Y. 2025-26 whereas appellant have subsequently get the further registration vide order dated 15.11.2024 for the period 2023-24 to 2027-28 and hence application was timely filed and much prior to the provision of 80G(5) (iii) of the Act.
5. On the facts and circumstances of the case the learned Commissioner of Income tax (Exemption) was erred in rejecting the application in Form 10AB for grant of registration u/s 80G on incorrect facts and by wrongly considering the provisional registration order whereas subsequently appellant have already got registration till 2027-28 and hence order deserves to be quashed.
6. The appellant craves for leave to amend, add to or omit any ground up to the time of hearing of the appeal.”
3. Brief facts of the case are that the assessee was granted provisional approval u/s 80G(5)(iv) of the Act on 11.03.2023. Subsequently, the assessee filed an application seeking regular approval u/s 80G(5)(ii) of the Act electronically on 02.09.2025 in Form No. 10AB. The Ld. CIT(E) noted that the assessee had already commenced its activities earlier but neither filed the application within the extended due date of 30.06.2024 as per CBDT Circular No. 7/2024 nor did it file the same six months prior to the expiry of the provisional approval period. Accordingly, the Ld. CIT(E) rejected the application of the assessee for having been filed beyond the prescribed time limit.
4. Aggrieved with the order of the Ld. CIT(E), the assessee has filed the appeal before the Tribunal.
5. Rival contentions were heard and the submissions made have been examined. The assessee has filed appeal for AY 2026-27 for the rejection of approval u/s 80G(5)(ii) of the Act. As the final certificate dated 15.11.2024 granted does not appear to have been cancelled, the appeal for AY 2026-27 is infructuous as the approval for the same AY 2026-27 is included in the final certificate dated 15.11.2024 which is for AYs 2023-24 to 2027-28. The appeal being infructuous is hereby dismissed.
However, as prayed in Ground No. 5, in view of the approval being granted on 15.11.2024, the cancellation of approval vide order dated 17.03.2026 for the period from 11.03.2023 to A.Y. 2025-26 is not justified and being infructuous is quashed as the order dated 15.11.2024 granting approval from AYs 2023-24 to 2027-28 has not been cancelled and subsists. Ground No. 5 is allowed. Other grounds of appeal are not being adjudicated as they are no longer relevant or liable to be dismissed in view of the order dated 15.11.2024.
6. In the result, the appeal filed by the assessee is partly allowed.
Order pronounced in the open Court on 25th August, 2026.
