Chavleshwar Parshavnath Digamber Jain Atishay Thirth Shethra Committee Vs CIT (ITAT Jaipur)
Jaipur ITAT: Section 153(3) Limitation Does Not Apply to 12AB/80G Registration Proceedings-But CIT(E) Must Give Proper Opportunity to Produce Voluminous Records
The Jaipur ITAT dealt with the assessee’s applications for registration under Section 12AB and approval under Section 80G, which had been rejected by the CIT(E). This was already the second round of litigation, the Tribunal having earlier remanded both applications for de novo consideration.
The CIT(E) again rejected the Section 12AB application because the assessee had not satisfactorily established its charitable activities. The photographs produced did not clearly demonstrate activities carried out by the assessee; some newspaper cuttings referred to another institution, “Chanvleshwar Yuva Vahini”. Further, although ledger accounts of expenses were produced, the supporting bills and vouchers were not furnished.
The Section 80G approval was also rejected. The CIT(E) noted an earlier alleged misrepresentation regarding expenditure on religious activities—the assessee had stated that it had not incurred expenditure for religious purposes despite being found to be conducting religious activities. Further, registration under Section 12AB itself had been denied.
Before the ITAT, the assessee raised an interesting jurisdictional argument that the CIT(E)’s second-round order was barred by limitation under Section 153(3). The earlier Tribunal order was dated 20.09.2023, whereas the fresh CIT(E) orders were passed only on 27.01.2026.
The Tribunal rejected this limitation argument. It held that Section 153(3) applies to a fresh assessment pursuant to an appellate/revisional order. An order dealing with an application for registration under Section 12AB or approval under Section 80G is not an assessment order and does not determine the assessee’s income. Hence, Section 153(3) has no application to such registration proceedings.
The assessee alternatively relied upon the six-month limitation under Section 12AA(2). This argument was also rejected. The ITAT held that the statutory period under Section 12AA(2) relates to applications initially received under the specified clauses of Section 12A(1) and cannot be extended to a second-round proceeding arising because the ITAT had remanded the original application under Section 254.
However, the assessee succeeded on natural justice. It explained that the books, vouchers, bills and other records sought by the CIT(E) were voluminous, that it had requested permission to physically produce them, and that sufficient opportunity had not been granted. The assessee stated that it now possessed the necessary documents to substantiate its case.
The ITAT therefore restored both the Section 12AB registration and Section 80G approval applications to the CIT(E). The CIT(E) was directed to permit the assessee to place the documents either physically, if requested, or electronically, provide due opportunity of hearing and thereafter decide both applications afresh.
Interestingly, the Tribunal noted that this would be the third round before the CIT(E) and that the original application had been pending since 21.09.2022. It therefore imposed a specific timeline, directing the CIT(E) to pass fresh orders within four months from receipt of the Tribunal’s order. Both appeals were allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT JAIPUR
Both the appeals relate to the same assessee and are against separate orders passed by the CIT (Exemption) (hereinafter referred to as “Ld. CIT(E)”), both dated 27.01.2026 for rejecting assessee’s application seeking registration under Section 12AB of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) and approval under Section 80G of the Act respectively.
