Shila Ashok Shah Foundation Vs CIT (Exemptions) (ITAT Mumbai)
12AB Registration Denied for Foreign Studies Grant Set Aside: ITAT Mumbai Holds Application of Funds Was in India; Delay Also Condoned
The Mumbai ITAT (G-Bench) allowed the appeal of a charitable trust for AY 2025-26, condoning a delay of 265 days in filing the appeal and setting aside the rejection of registration under Section 12AB. The Tribunal found that the delay was due to bona fide reasons, lack of awareness of portal communications, and absence of mala fide intent, applying the liberal principles laid down in Collector, Land Acquisition v. Mst. Katiji.
On merits, the CIT(E) had rejected registration on the ground that the trust violated Section 11(1)(c) by allegedly applying income outside India, as it had granted ₹4,00,000 to an Indian student for studies at Brunel University, London. The ITAT held that the grant was paid in Indian currency to the student in India, and there was no evidence of direct payment to the foreign university. Relying on the binding Mumbai ITAT decision in Jamshedji Tata Trust, the Tribunal reiterated that application of funds in India does not become foreign application merely because the charitable purpose is ultimately executed abroad.
Accordingly, the ITAT remanded the matter to the CIT(E) to reconsider the application for registration under Section 12AB in light of settled law and after granting proper opportunity. The appeal was allowed in full.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
