CIT(E) Cannot Ignore Existing Approval and Deny 12AB Renewal: ITAT Grants Relief to Jio Institute

Reliance Foundation Institution of Education And Research Vs CIT (ITAT Mumbai)

CIT(E) Cannot Ignore Existing Approval and Deny 12AB Renewal: ITAT Grants Relief to Jio Institute

The Mumbai ITAT quashed the orders rejecting renewal of Section 12AB registration and Section 80G approval to Reliance Foundation Institution of Education and Research (Jio Institute), holding that the CIT(E) had proceeded on a factually incorrect assumption that the institution had not obtained approval for its amended objects.

The CIT(E) had denied renewal on the ground that after modifying its objects, the institution failed to file an application under Section 12A(1)(ac)(v) within the prescribed time and therefore the amended objects had never been approved by the competent authority. Based on this alleged non-compliance, both the 12AB renewal and consequential 80G approval were rejected.

Before the Tribunal, the assessee demonstrated that it had in fact filed the required application after amendment of its objects and had already obtained approval through Form 10AD dated 18.04.2024, issued by the CIT(E) himself. The Tribunal noted that this approval order had also been specifically furnished during the renewal proceedings, yet the CIT(E) ignored the same and proceeded as if no such approval existed.

The ITAT observed that the scope of enquiry under Section 12AB is limited to examining the charitable nature of the objects, genuineness of activities and compliance with laws material to achieving those objects. There was no finding that Jio Institute’s educational objects were non-charitable, no allegation that its activities were not genuine and no finding of any violation of law affecting its educational purpose. The rejection was founded solely on a procedural objection that was contrary to the Department’s own records.

Holding that a statutory authority cannot disregard its own subsisting approval order and then deny renewal on the premise that no approval was obtained, the Tribunal directed the CIT(E) to grant renewal of registration under Section 12AB and approval under Section 80G with effect from 01.04.2026.

FULL TEXT OF THE ORDER OF ITAT MUMBAI

The aforesaid two appeals have been preferred by the assessee against two separate orders dated 29.03.2026 passed by the learned Commissioner of Income Tax (Exemptions), Mumbai, whereby the application filed by the assessee seeking renewal of registration under section 12AB of the Income Tax Act, 1961 has been rejected and, as a consequence thereof, the application seeking renewal of approval under section 80G of the Act has also been rejected. Since both the appeals arise from the same factual matrix, rest upon the same reasoning adopted by the learned CIT(E), and the rejection of approval under section 80G is admittedly consequential to the rejection of registration under section 12AB, both the appeals are being disposed of by this consolidated order.

2. The assessee before us is a company incorporated under section 8 of the Companies Act, 2013 and is stated to have been established with the object of carrying on charitable activities in the field of education. It has set up a higher education institution by the name of “Jio Institute”. The assessee was originally granted registration under section 12AA of the Act on 10.04.2018 with effect from 01.04.2017 and was also granted approval under section 80G of the Act on 13.08.2018. Thereafter, consequent upon the statutory amendments brought in by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, whereby all existing trusts and institutions registered under section 12A/12AA were required to migrate to the new regime by making an application under section 12AB, the assessee made the requisite applications and was granted registration under section 12AB and approval under section 80G vide orders dated 28.05.2021 and 31.05.2021 respectively, valid for a period of five years ending on 31.03.2026.

3. Subsequently, the assessee undertook amendment in its objects forming part of the Memorandum of Association. Consequent upon such amendment, the assessee filed a fresh application under section 12A(1)(ac)(v) of the Act. The said application was duly considered by the learned CIT(E), and approval was granted in Form No.10AD vide order dated 18.04.2024. The said approval, it is not in dispute, was also valid up to 31.03.2026. Thereafter, since the existing registration was to expire on 31.03.2026, the assessee filed an application on 24.09.2025 seeking renewal of registration under section 12A(1)(ac)(ii) and also filed an application on 25.09.2025 seeking renewal of approval under section 80G of the Act.

4. The learned CIT(E), while considering the application filed in Form No.10AB, issued notice dated 15.11.2025 calling upon the assessee to furnish various details and documents. One of the queries specifically related to the amendment in the objects/trust deed and required the assessee to furnish the relevant intimation and documents in respect of such change. In response thereto, the assessee filed its reply dated 26.11.2025, wherein it specifically submitted that the objects had been amended and that approval in respect of such amendment had already been granted by the learned CIT(E) in Form No.10AD dated 18.04.2024. The assessee also placed on record the copy of the said approval order.

5. However, the learned CIT(E), in the impugned order dated 29.03.2026, rejected the application seeking renewal of registration under section 12AB by holding that the assessee had undertaken modification in its objects, that such modification had been approved by the Registrar of Companies on 04.08.2023, but that the assessee had not made an application seeking fresh registration within the time prescribed under section 12A(1)(ac)(v). According to the learned CIT(E), section 12A(1)(ac)(v) mandates that where a trust or institution has adopted or undertaken modification of its objects which do not conform to the conditions of registration, it is required to make an application for registration within thirty days from the date of such adoption or modification. On this premise, the learned CIT(E) concluded that the assessee had failed to comply with the mandatory statutory requirement and that the modified objects had never been subjected to approval by the competent authority in the manner prescribed under law. Accordingly, the application seeking renewal of registration was rejected.

6. As a sequel to the rejection of registration under section 12AB, the learned CIT(E) also rejected the application seeking approval under section 80G by holding that section 80G(5) applies only to such institutions to whom, inter alia, the provisions of sections 11 and 12 apply, and since the assessee’s application for renewal of registration under section 12AB had been rejected, the approval under section 80G could not be granted. Thus, the rejection under section 80G is admittedly founded entirely upon, and is consequential to, the rejection under section 12AB.

7. Before us, the learned counsel for the assessee submitted that the entire foundation of the impugned order is factually erroneous. It was submitted that the learned CIT(E) has proceeded on the assumption that after amendment of the objects, the assessee did not file any application under section 12A(1)(ac)(v), whereas the record clearly shows that such application was duly filed and was allowed by the learned CIT(E) himself vide Form No.10AD dated 18.04.2024. It was further submitted that during the present renewal proceedings also, the assessee had specifically brought this fact to the notice of the learned CIT(E) in response to the notice dated 15.11.2025 and had filed a copy of the approval order dated 18.04.2024. Therefore, according to the learned counsel, the finding recorded by the learned CIT(E) that the modified objects were never subjected to approval by the competent authority is contrary to the record and cannot be sustained.

8. The learned counsel further submitted that the assessee is engaged in the field of education, which is a per se charitable purpose under section 2(15) of the Act. There is no finding in the impugned order that the objects of the assessee are not charitable. There is no finding that the activities of the assessee are not genuine. There is no finding of violation of any law which is material for achieving the objects of the institution. The sole ground of rejection is alleged non­compliance of section 12A(1)(ac)(v), which itself is factually incorrect. Hence, it was submitted that the assessee is entitled to renewal of registration under section 12AB and consequential approval under section 80G.

9. We have heard the rival submissions, perused the impugned orders and considered the material placed before us. The controversy before us lies in a very narrow compass. The learned CIT(E) has rejected the renewal of registration on the sole premise that after modification of its objects, the assessee did not file an application under section 12A(1)(ac)(v), and therefore there was statutory non­compliance. However, from the documents placed on record, it is clearly borne out that after amendment of its objects, the assessee had in fact filed an application under section 12A(1)(ac)(v), and the learned CIT(E) himself had granted approval in Form No.10AD vide order dated 18.04.2024. This approval order was not only part of the assessee’s factual record, but was also specifically furnished during the course of the present proceedings in response to the notice issued by the learned CIT(E). Thus, the very factual premise on which the impugned order rests stands completely dislodged.

10. Once it is accepted that the assessee had already obtained approval in respect of the amended objects under section 12A(1)(ac)(v), the conclusion drawn by the learned CIT(E) that the modified objects were never subjected to approval by the competent authority becomes unsustainable. The order dated 18.04.2024 in Form No.10AD was passed by the competent authority under the very statutory framework. It was neither withdrawn nor cancelled nor shown to be non est in law. Therefore, in the subsequent renewal proceedings, the learned CIT(E) could not have proceeded as if no such approval existed. A statutory authority deciding a later application is bound to take into account its own earlier order, especially when such order directly answers the very objection on which the later rejection is founded.

11. In our considered view, this is not a mere procedural irregularity. It goes to the root of the matter. The rejection order proceeds on an assumption which is contrary to the Department’s own record. When a material document, namely Reliance Foundation Institution of Education and Research Form No.10AD dated 18.04.2024, had been filed before the learned CIT(E) and when that document clearly established that approval for amended objects had already been granted, the learned CIT(E) was required to deal with the same. Non-consideration of such a vital document renders the decision-making process infirm. A finding which stands contradicted by a subsisting statutory order cannot be allowed to form the basis for denial of registration.

12. At this stage, it is necessary to bear in mind the scope of inquiry under section 12AB. Registration under section 12AB is not in the nature of an assessment proceeding. The Commissioner is not expected to enter into an exhaustive examination of the application of income or to sit in judgment over issues which are properly matters of assessment. The statutory inquiry is confined to examining the objects of the trust or institution, the genuineness of its activities, and compliance with such requirements of law as are material for achieving its objects. The Commissioner must act within the confines of the provision and cannot reject registration on a premise which is either factually incorrect or legally irrelevant to the inquiry contemplated under section 12AB.

13. The assessee before us is an institution engaged in the field of education. Education is one of the specific limbs of charitable purpose under section 2(15) of the Act. In respect of such per se charitable purposes, the law does not import the rigours of the proviso dealing with advancement of any other object of general public utility. What is required to be seen at the stage of registration is whether the objects are charitable and whether the activities are genuine. The impugned order does not record any adverse finding that the assessee’s objects are not charitable. It does not record that the assessee is not engaged in educational activities. It does not record that the activities are bogus, colourable or not genuine. Nor is there any finding that the assessee has violated any law which is material for carrying out its educational objects. Thus, the essential statutory conditions for renewal have not been found to be absent.

14. The Hon’ble Bombay High Court in Chamber of Tax Consultants v. CIT(E) [2026] 184 taxmann.com 374 has reiterated that at the stage of registration, the inquiry of the Commissioner is circumscribed by the statutory parameters of section 12AB. The focus has to remain on the charitable nature of the objects and the genuineness of the activities. Peripheral, technical or extraneous objections cannot be elevated to grounds for denial of registration unless they have a direct bearing on the statutory conditions. The said principle squarely applies to the present case. Here, even the alleged technical objection does not survive because the assessee had already obtained approval for the amended objects.

15. The learned CIT(E) has also observed that registration under section 12AB is to be granted after being satisfied about the objects, genuineness of activities and compliance of other laws material for achieving such objects. There can be no quarrel with this proposition. However, the difficulty is that after stating the correct statutory test, the learned CIT(E) has not applied it to the facts of the case. There is no discussion as to why the objects are not charitable. There is no discussion as to why the educational activities are not genuine. There is no finding that any law material for achieving the objects has been violated. Instead, the order rests entirely upon the alleged violation of section 12A(1)(ac)(v), which, as already noted, is contrary to the approval already granted in Form No.10AD dated 18.04.2024.

16. We therefore hold that the impugned order rejecting the application for renewal of registration under section 12AB is unsustainable both on facts and in law. The assessee had duly complied with the requirement of section 12A(1)(ac)(v) by filing the requisite application after amendment of its objects, and such application had culminated in an approval order dated 18.04.2024. The subsequent application seeking renewal under section 12A(1)(ac)(ii) could not have been rejected on the ground that such approval had not been obtained. In the absence of any adverse finding on charitable objects, genuineness of activities or violation of law material to the objects, the assessee could not have been denied renewal of registration.

17. Accordingly, the order dated 29.03.2026 passed by the learned CIT(E) rejecting renewal of registration under section 12AB is set aside. The learned CIT(E) is directed to grant renewal of registration to the assessee under section 12AB for the period prescribed under law with effect from 01.04.2026.

18. We now take up the assessee’s appeal in ITA No.3801/Mum/2026 relating to rejection of approval under section 80G. It is an admitted position that the learned CIT(E) has rejected the application under section 80G only as a consequence of rejection of renewal of registration under section 12AB. The order under section 80G does not rest on any independent adverse finding. It proceeds solely on the footing that since the registration under section 12AB has been denied, the assessee is not eligible for approval under section 80G.

19. Since we have already set aside the order rejecting renewal of registration under section 12AB and have directed the learned CIT(E) to grant registration, the very foundation for rejection of approval under section 80G disappears. Once the assessee is held entitled to registration under section 12AB, the consequential denial of approval under section 80G cannot survive. In the absence of any independent infirmity pointed out by the learned CIT(E), the assessee is also entitled to renewal of approval under section 80G.

20. Accordingly, the order dated 29.03.2026 rejecting the assessee’s application for renewal of approval under section 80G is also set aside. The learned CIT(E) is directed to grant approval under section 80G to the assessee for the period prescribed under law with effect from 01.04.2026.

21. Before parting, we may observe that the present case demonstrates the importance of a careful and holistic consideration of the record in registration proceedings. When an institution has placed before the authority an order of approval already granted by the same office under section 12A(1)(ac)(v), such document could not have been overlooked. Denial of registration to an educational institution, otherwise pursuing charitable objects, on a factual premise contradicted by the record, would defeat the very purpose of the statutory framework. The law does not contemplate rejection for rejection’s sake. It contemplates an informed satisfaction based on the record, the statute and the real nature of the institution’s objects and activities.

22. In the result, both the appeals filed by the assessee are allowed. The impugned orders passed by the learned CIT(E) are quashed and the learned CIT(E) is directed to grant renewal of registration under section 12AB and approval under section 80G in accordance with law for the relevant period commencing from 01.04.2026.

Order pronounced on 9^th June, 2026.