Dr. C J Desai And Jaswantiben Desai Foundation Vs CIT (Exemption) (ITAT Ahmedabad)
The Income Tax Appellate Tribunal (ITAT) Ahmedabad reviewed an appeal by Dr. C J Desai and Jaswantiben Desai Foundation challenging the rejection of its Section 80G application by the Commissioner of Income Tax (Exemption) [CIT(E)]. The CIT(E) had denied approval under Section 80G(5)(iii) on the grounds that the trust lacked valid registration under Section 12A/12AB. However, the trust argued that it already had a valid 12A registration for A.Y. 2022-23 to 2026-27, granted on 21.07.2023. It was clarified that the trust had mistakenly filed a duplicate application for 12A registration and later withdrew it. The CIT(E), however, denied the 80G application based on the withdrawal, incorrectly assuming that the trust had no valid registration.
The ITAT found that the rejection was based on an erroneous understanding of the facts. Since the trust had a valid 12A registration at the time of applying for 80G approval, the rejection lacked proper grounds. Consequently, the tribunal set aside the CIT(E)’s decision and remanded the case for fresh consideration. It directed the CIT(E) to review the application without disqualifying the trust based on the incorrect presumption of lacking 12A registration. This ruling ensures that procedural misinterpretations do not unjustly hinder charitable organizations from obtaining necessary tax exemptions.
