The Pyramid Spiritual Trust (Hyderabad) Vs The ITO (Exemptions) (ITAT, Hyderabad)
One Unserved 80G Order Cannot Topple the Entire Pyramid: ITAT Condones 2,336-Day Delay, Revives Registration &; Knocks Down Consequential Cancellation u/s 12AB(4)
Summary:
The Trust & Its Charitable Recognition
The assessee-Trust was established to create awareness regarding Spiritual Science & Anapanasati Meditation and promote physical, mental & intellectual health.
It was granted registration u/s 12AA on 21.11.2007 & approval u/s 80G(5)(vi) on 04.08.2009. Its claims for exemption u/s 11 had also been accepted by the Department in proceedings u/s 143(1) as well as u/s 143(3).
On 09.08.2018, the Trust filed Form 10G, seeking approval u/s 80G. The CIT(E), however, rejected the application vide order dated 12.02.2019 for non-compliance with notices. The notices sent on two occasions had been returned with the postal endorsement “refused”.
Crucially, the application was not rejected because the Trust’s objects were non-charitable or its activities were non-genuine. It was rejected purely for non-prosecution.
Provisional Registration Granted Under New Regime
Following the new registration regime introduced by the Finance Act, 2020, the Trust filed Form 10A on 31.08.2021, seeking registration u/s 12A & approval u/s 80G.
The Department granted registration & approval through Form 10AC dated 24.09.2021, covering AYs 2022-23 to 2026-27.
Thereafter, on 29.09.2025, the Trust filed Form 10AB for renewal of its registration u/s 12A/12AB & approval u/s 80G(5)(vi).
At this stage, the CIT(E) discovered the earlier order dated 12.02.2019 rejecting the Trust’s Form 10G application.
A ‘No’ in Form 10A Triggers Cancellation
In Form 10A, the Trust had answered “No” against the column seeking particulars of any earlier cancellation or rejection. According to the CIT(E), this answer constituted incorrect or false information because the Form 10G application had already been rejected on 12.02.2019.
Treating this as a “specified violation”, the CIT(E) passed an order dated 18.02.2026 u/s 12AB(4) cancelling the Trust’s registration for AY 2019-20 & subsequent years, including the provisional registration granted for AYs 2022-23 to 2026-27.
Based on that cancellation, the CIT(E) further rejected the Trust’s Form 10AB applications for renewal of registration & 80G approval vide orders dated 27.02.2026.
Thus, the unserved 2019 rejection order became the foundation for cancellation of the existing registration as well as rejection of the renewal applications.
Delay of 2,336 Days Explained
The appeal against the original order dated 12.02.2019 was delayed by 2,336 days.
The Trust explained that the order had never been served upon it. It came to know of the rejection only when the CIT(E) initiated proceedings u/s 12AB(4) for cancellation of registration on the ground of furnishing false information.
Immediately after discovering the earlier order, the Trust took steps to challenge it. The delay was therefore neither deliberate nor intended to secure any advantage.
The Revenue opposed condonation, contending that the delay was inordinate & that sufficient cause had not been established.
ITAT Favours Merits Over Technicalities
The Tribunal found the Trust’s explanation bona fide. The 2019 order itself disclosed that the notices had been returned unserved with the endorsement “refused”. Therefore, the Trust’s assertion that it was unaware of the proceedings & rejection order could not be brushed aside.
Relying upon Collector, Land Acquisition v. Mst. Katiji, 167 ITR 471 (SC), the ITAT reiterated that when substantial justice & technical considerations are pitted against each other, the cause of substantial justice deserves preference.
Rejecting a potentially meritorious case merely on limitation would permanently shut it out from judicial scrutiny, whereas deciding it on merits would cause no undue prejudice to the Revenue.
Accordingly, the 2,336-day delay was condoned & the appeal was admitted.
Original 80G Rejection Restored for Reconsideration
The ITAT noted that the Trust’s objects fell within “charitable purpose” u/s 2(15). The Department had recognised the Trust’s charitable character since 2007 & subsequently granted registration and 80G approval in 2021.
Since the 2019 Form 10G application had been rejected only for non-prosecution, the Tribunal set aside that order & restored the application to the CIT(E).
The CIT(E) was directed to reconsider the application after examining the Trust Deed, charitable objects & activities & decide the issue of approval u/s 80G in accordance with law.
Consequential Cancellation Also Falls
The cancellation u/s 12AB(4) was founded entirely upon the alleged false statement concerning the 2019 rejection. Once that foundational order was set aside for reconsideration, the subsequent cancellation could not survive.
The Tribunal accordingly set aside the order dated 18.02.2026 & restored the provisional registration u/s 12A and approval u/s 80G granted on 24.09.2021 for AYs 2022-23 to 2026-27.
The orders dated 27.02.2026 rejecting Form 10AB were also set aside. The renewal applications were remanded to the CIT(E) for fresh consideration on merits after granting the Trust an opportunity of hearing.
All four appeals were allowed for statistical purposes.
Author’s Comments
The ruling applies the legal principle that when the foundation falls, every consequential structure resting upon it must also fall. An unserved order rejecting 80G approval for non-prosecution could not automatically establish deliberate falsehood in Form 10A or justify cancellation u/s 12AB(4).
The Tribunal did not itself grant permanent registration or renewal. It restored the earlier provisional registration & remanded the original and renewal applications for merit-based adjudication. The message is clear: a procedural rejection may pause an approval, but it cannot, without proper service & examination, bury an otherwise charitable Trust beneath a pyramid of consequential orders.
Cases Discussed
- Collector, Land Acquisition v. Mst. Katiji & Ors., 167 ITR 471 (SC)
- The Chamber of Tax Consultants & Ors. v. CIT(E), [2026] 184 taxmann.com 374 (Bom.)
- Reliance Foundation Institution of Education & Research v. CIT(E), [2026] 187 taxmann.com 568
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT, HYDERABAD
These appeals filed by the assessee are directed against the orders of the Commissioner of Income Tax (Exemptions), Hyderabad, dated 01.08.2025, 18.02.2026 & 27.02.2026 and pertains to assessment years 2019-20, 2022-23 & 2026-27.
2. The assessee has raised the following grounds of appeal in ITA No.346/Hyd/2026 for AY 2019-20:
Ground No. 1 – Violation of Principles of Natural Justice
1. The learned Commissioner of Income-tax (Exemptions) erred in law and on facts in rejecting the Appellant’s application for approval under Section 80G(5)(vi) without granting a proper and effective opportunity of being heard, thereby violating the fundamental principles of natural justice.
2. The impugned order was passed ex-parte, merely on the ground that notice was returned unserved, without making any meaningful effort to ensure service or provide alternative modes of hearing.
Ground No. 2 – Non-service of Notice vitiates the entire proceedings
1. The learned CIT(E) failed to appreciate that non-service of notice cannot be construed as non-compliance by the Appellant, particularly when no material exists to show deliberate avoidance or refusal by the Trust.
2. In the absence of valid service of notice, the impugned order dated 12.02.2019 is void ab initio and liable to be quashed.
Ground No. 3- Rejection without examination of objects and activities
1. The learned CIT(E) erred in rejecting the application without examining the charitable objects, activities, accounts, or utilisation of income of the Appellant Trust.
2. Approval under Section 80G cannot be denied solely on procedural grounds without recording a finding that:
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- the objects are non-charitable, or
- the activities are not genuine, or
- conditions of Section 80G(5) are violated.
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Ground No. 4-Mechanical and non-speaking order
1. The impugned order is mechanical, cryptic, and non-speaking, passed without application of mind and without recording any adverse finding on merits.
2. Such an order is unsustainable in law and liable to be set aside.
Ground No. 5-Powers under Section 80G exercised arbitrarily
1. The learned CIT(E) failed to exercise discretion judiciously and acted arbitrarily in rejecting the application without considering that the Appellant Trust had been consistently engaged in bona fide charitable activities.
2. Rejection of approval under Section 80G, which affects third-party donors, requires strict adherence to due process, which has not been followed.
Ground No. 6 – Disproportionate consequence for a procedural lapse
1. Without prejudice, even assuming a procedural lapse, outright rejection of approval under Section 80G is grossly disproportionate, especially when no defect in objects or activities was found.
2. The learned CIT(E) ought to have granted approval or at least provided an opportunity to cure any alleged defect.
Ground No. 7- Subsequent conduct supports genuineness
1. The Appellant Trust has since been granted registration and approval under the new regime (Section 12AB/80G), which itself demonstrates that:
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- the objects are charitable, and
- the activities are genuine.
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2. This subsequent recognition reinforces that the earlier rejection was procedural and unjustified.
Ground No. 8- Delay deserves condonation due to non-communication
1. The delay in filing the present appeal is solely attributable to non-communication and non-service of the impugned order, and not due to any negligence or mala fide intent on part of the Appellant.
2. The delay therefore deserves to be condoned in the interest of substantial justice.
Ground No. 9- Liberty to raise additional grounds
The Appellant craves leave to add, amend, alter or withdraw any of the above grounds at the time of hearing.
PRAYER
In view of the above, the Appellant respectfully prays that the Hon’ble Tribunal may be pleased to:
a) Set aside the impugned order dated 12.02.2019 passed by the learned CIT(E);
b) Restore the matter to the file of the CIT(E) for fresh adjudication after granting proper opportunity of being heard; OR
c) Grant approval under Section 80G(5) (vi) after examining the merits of the case;
d) Pass such other order as may be deemed fit in the interest of justice.
3. At the outset, we find that there is a delay of ‘2336’ days in filing of the appeal, for which assessee has filed a petition for condoning the delay along with affidavit explaining the reasons to condone delay. The Ld. Counsel for the assessee submitted that the delay in filing the appeal is neither intentional nor for want of any undue benefit but, purely beyond the control of the assessee because the order passed by the Ld.CIT(E) dated 12.02.2019 was never served upon the assessee and the assessee came to know about rejection order passed by the Ld.CIT(E) only when the Ld.CIT(E) issued show cause notice u/s.12AB(4) of the Income Tax Act, 1961 (in short “the Act“) for cancellation of registration u/s.12A & recognition u/s.80G of the Act on account of one of the ‘specified violations’ referred to explanation to Section 12AB(4) of the Act. Further, upon noticing the fact that the order has been passed for rejecting the application filed by the assessee for recognition u/s.80G of the Act, the assessee has taken steps to file the appeals which resulted in delay of ‘2336’ days. Since the delay is purely beyond the control of the assessee and further the Ld.CIT(E) rejected the application on technical grounds for non-prosecution, but not made out any case of carrying out charitable activities not in accordance with the objects of the Trust for advancement of substantial justice, the delay in filing the appeals should be condoned. In this regard, he relied upon the decision of the Hon’ble Supreme Court in the case of Collector, Land Acquisition v. Mst.Katiji & Ors., reported in 167 ITR 471 (SC).
4. The Ld.CIT-DR has opposed the petition filed by the assessee for condonation of delay and argued that the delay is inordinate, the reasons given by the assessee in their affidavit doesn’t come under ‘sufficient cause’ and therefore, the delay in filing the appeals should not be condoned.
5. We have heard both the parties and considered the relevant contents of petition filed by the assessee along with the affidavit explaining the reasons for delay in filing the appeals and we find that, the reasons given by the assessee appears to be bona-fide and does come under ‘sufficient cause’ because, as per the order passed u/s.80G(5)(vi) of the Act dated 12.02.2019, the Ld.CIT(E) rejected the application filed by the assessee for recognition u/s.80G(5) of the Act not on account of any violation of law or not carrying out any charitable activities in accordance with its objection but, purely non-compliance by the assessee to the show cause notice, where the Ld.CIT(E) clearly stated that the notices served on the assessee on two occasions were returned with a remark “refused”. From the above, it is clear that the order passed u/s.80G(5)(vi) of the Act is not served on the assessee and therefore, in our considered view, when the order passed by the authority is not served then obviously, the assessee is not aware of the order passed by the Ld.CIT(A) and therefore, the reasons explained by the assessee for delay in filing the appeals comes under ‘sufficient cause’ and the delay needs to be condoned.
6. Further, it is a well settled principle of law from the decision of various Courts, including the Hon’ble Supreme Court in the case of Mst. Katiji & Ors., (supra) where it has been clearly held that if a case is thrown out of judicial scrutiny on technical grounds, then a meritorious case may be goes out of judicial scrutiny and at the same time if a case is heard on merits at the best, the other party is not going to get any undue benefit. The sum and substance of the ratio laid down by various Courts including the Hon’ble Supreme Court is that when merits and technicalities are pitted against each other, then merit alone deserves to be prevailed, because, if you throw out a meritorious case out of judicial scrutiny on the grounds of technicalities, and if assessee is having a strong case on merits, then case should be adjudicated on merits rather dismissing it on technical grounds. In the present case, the issue before us is rejection of application filed for recognition u/s.80G(5) of the Act and the Ld.CIT(E) rejected application on the ground of non-compliance, but not on the ground of any objects or activities contrary to the objects of the Trust. Since the assessee has a strong case on merits, in our considered view, the delay of ‘2336’ days in filing the appeals should be condoned. Thus, we condoned the delay in filing the appeals and admit the appeals for adjudication.
7. The brief facts of the case are that the assessee is a Trust which has been formed with the sole aim of creating awareness amongst all the people in this world about the primary role of Spiritual Science in general and Anapanasati Meditation in particular and also in providing perfect physical, mental and intellectual health to all. The assessee Trust was granted registration u/s.12AA of the Act, vide order of the DIT(E) dated 21.11.2007 and the said registration was continued up to introduction of new scheme of registration by the Finance Act, 2020. The assessee Trust was also recognized u/s.80G(5)(vi) of the Act vide order of the DIT(E) dated 04.08.2009. Further, the assessee Trust has filed Form 10G seeking approval u/s.80G of the Act on 09.08.2018. The application filed by the assessee was rejected by the Ld.CIT(E) vide order u/s.80G(5)(vi) of the Act dated 12.02.2019 on the ground of non-compliance to the notice issued during the course of proceedings with remark that the notices served on the assessee were returned with a remark “refused”. Subsequently, after the introduction of new scheme of registration of Trust/Institution u/s.12A / 80G, by the Finance Act, 2020, the assessee has filed Form 10A on 31.08.2021 seeking registration u/s.12A of the Act and recognition u/s.80G of the Act. The assessee Trust was granted registration u/s.12A of the Act & recognition u/s.80G of the Act through Form 10AC for a period of five years vide order dated 24.09.2021 w.e.f. AYs 2022-23 to 2026-27. Thereafter, the assessee Trust filed an application in Form 10AB on 29.09.2025, seeking renewal of registration u/s.12A of the Act &
recognition u/s.80G(5)(vi) of the Act and the same was rejected by the Ld.CIT(E) vide order dated 27.02.2026 on the ground that the Ld.CIT(E) has passed an order u/s.12AB(4) of the Act dated 18.02.2026 and cancelled registration of the Trust u/s.12A of the Act for furnishing false information in the application filed in Form 10A for taking provisional registration u/s.12A/80G of the Act.
8. Aggrieved by the order of the Ld.CIT(E) perused u/s.80G(5)(vi) of the Act dated 12.02.2019, the assessee has filed an appeal before the Tribunal.
9. The Ld. Counsel for the assessee, Shri C.Maheshwar Reddy, CA submitted that the Ld.CIT(E) erred in rejecting the application in Form 10G, seeking approval u/s.80G of the Act for non-compliance without providing sufficient opportunity to the assessee to explain its case. The Ld. Counsel for the assessee further submitted that, if you go by the order of the Ld.CIT(E) dated 12.02.2019, the Ld.CIT(E) rejected the application for non-compliance but not on ground of any non-charitable activity or activities carried out by the assessee Trust has not in accordance with main objects of the Trust. Since the Ld.CIT(E) rejected the application filed by the assessee in Form 10G seeking approval u/s.80G of the Act for non-compliance and further, the assessee Trust is carried out charitable activities in accordance with its objects and the same has been accepted by the Department in subsequent assessement years, the application filed by the assessee seeking registration u/s.80G of the Act ought not to have received application filed by the assessee.
10. The Ld. Counsel for the assessee further referring to order passed by the Ld.CIT(E) u/s.12AB(4) of the Act dated 18.02.2026 and subsequent order passed on 27.02.2026 rejecting application filed in Form 10AB for renewal of registration u/s.12A of the Act and renewal of approval u/s.80G(5)(vi) of the Act submitted that the subsequent order passed by the Ld.CIT(E) is a fall out of the order of the Ld.CIT(E) dated 12.02.2019 on application filed by the assessee in Form 10G on 09.08.2018. The order passed by the Ld.CIT(E) cancelling registration u/s.12AB of the Act should be set aside and the Ld.CIT(E) may be directed to grant registration u/s.12A of the Act and recognition u/s.80G(5)(vi) of the Act on the basis of application filed by the assessee in Form 10AB dated 29.09.2025. In this regard, he relied upon plethora of judicial precedents, including the decision of the Hon’ble Bombay High Court in the case of The Chamber of Tax Consultants & Ors. v. CIT(E) reported in [2026] 184 taxmann.com 374 (Bom.) and also the decision in the case of Reliance Foundation Institution of Education & Research v. CIT(E) reported in [2026] 187 taxmann.com 568.
11. The Ld.CIT-DR, on the other hand, supporting the order of the Ld.CIT(E), submitted that the assessee has not responded to various show cause notices issued by the Ld.CIT(E) during the course of proceedings, which is evident from non-service of show cause notice. Further, the assessee has obtained provisional registration u/s.12A of the Act & approval u/s.80G(5)(vi) of the Act by giving false information in Form 10A and the same is fallen under category of ‘specified violation’ as referred to in Section 12AB(4) of the Act and therefore, the Ld.CIT(E) has rightly cancelled the registration granted to the assessee Trust u/s.12A & approval u/s.80G(5)(vi) of the Act in terms of power u/s.12AB(4) of the Act. The Ld. CIT(E) further submitted that since the registration u/s.12A & approval u/s.80G(5) of the Act has been cancelled, the application filed by the assessee in Form 10AB seeking renewal of registration u/s.12A of the Act & recognition u/s.80G(5) of the Act has been rightly rejected. Therefore, he submitted that the order passed by the Ld.CIT(E) should be upheld and appeals filed by the assessee should be dismissed.
12. We have heard both the parties, perused the materials available on record and had gone through the orders of the authorities below. We also carefully considered the relevant dates and events to understand the facts of the case including right from the objects of the assessee Trust, original registration granted u/s.12AA of the Act and original approval granted u/s.80G(5)(vi) of the Act. Admittedly, the objects are in the nature of charitable purpose as defined u/s.2(15) of the Act, which is evident from the relevant objects, where the Trust was formed with the sole aim of creating awareness amongst all the people in this world about the primary role of Spiritual Science in general and Anapanasati Meditation in particular and also in providing perfect physical, mental and intellectual health to all.
In fact, the Department has recognized the objects of the assessee Trust as charitable in nature and granted registration u/s.12AA of the Act on 21.11.2007 and approval u/s.80G(5)(vi) of the Act on 04.08.2009 which was valid till the assessee has filed subsequent application in Form 10G on 09.08.2018 seeking approval u/s.80G of the Act. Further, on the basis of the above facts, the assessee was claiming exemption u/s.11 of the Act by filing Return of Income for the relevant assessement year and the same has been accepted by the Department either in proceedings u/s.143(1) or proceedings u/s.143(3). The assessee Trust was also granted provisional registration u/s.12A and approval u/s.80G(5)(vi) of the Act vide order dated 24.09.2021 from AYs 2022-23 to 2026-27. To this extent, there is no dispute with regard to the fact that the Ld. Counsel for the assessee and the Ld. Sr. DR for Revenue has accepted the facts stated above. The dispute starts only when the assessee has filed application in Form 10AB, seeking renewal of registration u/s.12A of the Act & approval u/s.80G of the Act. The Ld.CIT(E) came to know about the order passed u/s.80G(5)(vi) of the Act dated 12.02.2019 and on the basis of said order, the Ld.CIT(E) noticed that the assessee has obtained provisional registration u/s.12A of the Act & approval u/s.80G of the Act by making incorrect/false information in application filed in Form 10A and observed that in the column specified for giving particulars about previous registration and cancellation, the assessee had given false information about cancellation of approval u/s.80G of the Act by stating ‘no’, even though the application filed by the assessee Trust seeking approval u/s.80G of the Act was rejected vide order dated 12.02.2019. Therefore, the Ld.CIT(E) passed the order u/s.12AB(4) of the Act on 18.02.2026 and cancelled the registration granted to the assessee u/s.12AA or 12AB of the Act for AY 2019-20 and the subsequent assessement years including the provisional registration granted from AYs 2022-23 to 2026-27.
13. We have gone through the relevant facts of the case in light of various arguments advanced by the Ld. Counsel for the assessee and counter arguments for the Ld.CIT-DR for the Revenue and we find that, the order passed by the Ld.CIT(E) u/s.80G(5)(vi) of the Act dated 12.02.2019 was not served upon the assessee, which is evident from relevant findings of the Ld.CIT(E) in the order itself, where the Ld.CIT(E) claims that notices issued on two occasions were returned by the postal authorities after making delivery attempts with a remark “refused”. Therefore, the Ld.CIT(E) rejected the application filed in Form 10G seeking approval u/s.80G of the Act for non-prosecution which is evident from relevant order passed on 12.02.2019. In other words, the Ld.CIT(E) has not rejected application filed by the assessee in Form 10G on the ground of non-genuine objects of the assessee Trust and its activities but purely on technical ground of non-prosecution. Further, going by the main objects of the assessee Trust as stated in the Trust Deed and activities carried out by the assessee Trust, we find that the objects of assessee Trust are charitable in nature which falls under the definition of charitable purpose as defined u/s.2(15) of the Act and the activities carried out by the assessee Trust are carried out in accordance with its objects which is also evident from the subsequent orders passed by the AO either u/s.143(1) or 143(3) proceedings where the RoI filed by the assessee has been accepted and also exemption claimed u/s.11 of the Act has been allowed upon noticing the fact that the objects of the Trust are charitable in nature and activities carried out by the assessee Trust are in accordance with its objects. Since the Ld.CIT(E) cancelled the application filed by the assessee Trust in Form 10G seeking recognition u/s.80G of the Act for non-prosecution and further, the assessee has explained the reasons for non-response to the notices issued by the Ld.CIT(E), in our considered view, to give one more opportunity to the assessee to explain its case with reference to the application filed in Form 10G seeking approval u/s.80G of the Act dated 09.08.2018, the matter needs to be set aside to the file of the Ld.CIT(E). Thus, we set aside the order passed by the Ld.CIT(E) dated 12.02.2019 because very foundation for the Ld.CIT(E) for subsequent order passed u/s.12AB(4) of the Act dated 18.02.2026 and order passed in Form 10AB rejecting registration u/s.12A of the Act and approval u/s.80G(5)(vi) of the Act dated 27.02.2026 is the order passed by the Ld.CIT(E) dated 12.09.2019. Thus, we set aside the order passed by the Ld.CIT(E) u/s.80G(5)(vi) of the Act dated 12.09.2019 and restore the application filed by the assessee in Form 10G dated 09.08.2018, seeking approval u/s.80G of the Act to the file of the Ld.CIT(E) for reconsideration. The Ld.CIT(E) is directed to reconsider the application filed by the assessee in light of Trust Deed and objects stated in the Trust Deed, activities carried out by the assessee Trust and decide the issue of approval u/s.80G of the Act as per law.
14. Coming back to appeals filed by the assessee in ITA No.1010/Hyd/2026, ITA No.2225/Hyd/2026 & ITA No.2314/Hyd/2026, the assessee has filed present appeal in ITA No.1010/Hyd/2026 against the order of the Ld.CIT(E) passed u/s.12AB(4) of the Act dated 18.02.2026 and challenged the order on merits. We find that the very foundation for the Ld.CIT(E) to pass order u/s.12AB(4) of the Act dated 18.06.2026 is rejection of application filed by the assessee in Form 10G dated 09.08.2018 seeking approval u/s.80G of the Act dated 12.02.2019 and subsequent application filed by the assessee in Form 10A for provisional registration of Trust u/s.12A of the Act and approval u/s.80G(5)(vi) of the Act. The Ld.CIT(E) cancelled the registration granted to the assessee Trust u/s.12AA or 12AB w.e.f. AYs 2019-20 & 2022-23 to 2026-27 on the sole basis of obtaining provisional registration by giving false information in Form 10A and observed that such application filed by the assessee comes under ‘specified violations’ referred to u/s.12AB(4) of the Act. According to the Ld.CIT(E), the assessee has given false information in the column provided for giving particulars of earlier application filed by the assessee and cancellation orders, if any, passed by the authority where the assessee
Trust has stated ‘no’, even though at the time of application filed in Form 10A on 31.08.2021, the Ld.CIT(E) passed order u/s.80G(5)(vi) of the Act on 12.02.2019. Therefore, the Ld.CIT(E) opined that, the assessee has obtained approval by giving false information and thus, passed order u/s.12AB(4) of the Act and cancelled registration u/s.12AA or 12AB of the Act w.e.f. AYs 2019-20 & 2022-23 to 2026-27.
15. We find that the Tribunal has considered the order passed by the Ld.CIT(E) dated 12.02.2019 and upon careful consideration of relevant order passed by the Ld.CIT(E) in light of various arguments of the Ld. Counsel for the assessee and counter arguments of the Ld.CIT-DR, the order passed by the Ld.CIT(E) has been set aside and the matter had been remanded to the file of the Ld.CIT(E) for reconsideration of the application filed by the assessee in Form 10G seeking approval u/s.80G(5)(vi) of the Act afresh after considering relevant objects of the Trust and activities carried out for the relevant assessement years. The very basis for the Ld.CIT(E) for cancellation of registration u/s.12AA or 12AB of the Act is the order passed by the Ld.CIT(E) u/s.80G of the Act dated 12.02.2019, similarly, rejection of application filed by the assessee in Form 10A for provisional registration u/s.12A of the Act and provisional approval u/s.80G of the Act is also on the basis of order dated 12.02.2019. Since, the order passed by the Ld.CIT(E) dated 12.02.2019 has been set aside to the file of the Ld.CIT(E), in our considered view, the subsequent order passed by the Ld.CIT(E) u/s.12AB(4) of the Act dated 18.02.2026 on the basis of earlier order passed by the Ld.CIT(E) dated 12.02.2019 can’t be sustained.
Therefore, we set aside the order passed by the Ld.CIT(E) u/s.12AB(4) of the Act dated 18.02.2026, cancelling registration u/s.12AB or 12A of the Act for AYs 2019-20 & 2022-23 to 2026-27 and restore the provisional registration obtained by the assessee u/s.12A of the Act and approval u/s.80G(5)(vi) of the Act vide order dated 24.09.2021 from AYs 2022-23 to 2026-27.
16. Coming back to appeals filed by the assessee Trust in ITA Nos.2225/Hyd/2026 & 2314/Hyd/2026. The assessee Trust has filed above two appeals against the order passed by the Ld.CIT(E) in Form 10AB rejecting the registration u/s.12A/12AB of the Act and approval u/s.80G of the Act dated 27.02.2026. We find that once again the sole basis for the Ld.CIT(E) to pass order in Form 10AB rejecting the application filed by the assessee in Form 10AB seeking renewal of registration u/s.12A of the Act and renewal of approval u/s.80G(5)(vi) of the Act is rejection of application filed by the assessee in Form 10G dated 09.08.2018 and subsequent order passed by the Ld.CIT(E) u/s.80G(5)(vi) of the Act dated 12.02.2019. The Ld.CIT(E) rejected the application filed by the assessee for renewal of registration u/s.12A and approval u/s.80G of the Act on the basis of the order passed by the Ld.CIT(E) u/s.12AB of the Act dated 18.02.2026. In other words, the Ld.CIT(E) has not rejected the application filed by the assessee on merits including on the grounds of non-charitable nature of objects of the assessee Trust or not carried out activities in accordance with its objects.
Since very basis for the Ld.CIT(E) for rejection of application filed by the assessee Trust in Form 10AB, is order passed u/s.80G(5)(vi) of the Act dated 12.02.2019 and subsequent order passed by the Ld.CIT(E) u/s.12AB(4) of the Act on 18.02.2026 and further, both the orders passed by the Ld.CIT(E) has been set side, in our considered view, the order passed by the Ld.CIT(E) in Form 10AB dated 27.02.2026 can’t be upheld. Thus, we set aside the order passed by the Ld.CIT(E) in Form 10AB dated 27.02.2026 and remand the issue back to the file of the Ld.CIT(E) to consider the application filed by the assessee in Form 10AB for renewal of registration u/s.12A and approval u/s.80G(5)(vi) of the Act. The Ld.CIT(E) is directed to consider the application filed by the assessee on merits by providing opportunity to the assessee to explain its case and decide the issue as per law.
17. In the result, all the appeals filed by the assessee are allowed for statistical purposes.
Order pronounced on the 02nd day of September, 2026, in Hyderabad.
