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.
2. The grant of approval u/s 80G of the Act primarily rests on the availability of registration u/s 12AB of the Act. Since the issues involved in the appeals are interlinked, therefore both the appeals were taken up for hearing together and are being disposed of by this common order.
3. At the outset, it was pointed out, that both the issues of grant of registration u/s 12AB of the Act and approval u/s 80G of the Act have come up in the second round before us. That earlier the issue was adjudicated in assessee’s own case in ITA Nos. 117 and 118/Jodhpur/2023 dated 20.09.2023, wherein the ITAT had set aside both the matters de novo for re-consideration by the Ld. CIT(E).
4. The order of the Ld. CIT(E) reveals that, in the second round also, the assessee’s applications u/s 12A and 80G of the Act were rejected for the reason that, the assessee failed to furnish explanation with respect to the issues noted in the earlier rejection order passed. In the case of grant of approval u/s 80G of the Act, the same was denied also for the reason that the assessee had been denied registration u/s 12A of the Act.
5. In the case of application filed seeking registration u/s 12A of the Act, the order of Ld. CIT (E) reveals that the issues for which the application was rejected in the first round was that the photographs filed by the assessee to prove carrying out of charitable activities by it did not reveal the activity being carried out by the assessee society/committee; that no banner of the assessee was noted to be present and the photographs of newspaper cuttings contained the name of some other institution i.e. Chanvleshwar Yuva Vahini. The Ld. CIT(E) concluded therefore, that the photographs furnished by the applicant did not corroborate the fact that the charitable activities were being done by the assessee. In the set aside proceedings, he noted that the assessee had furnished only ledger accounts of expenses claimed and did not furnish any bills or vouchers of expenses claimed, and that the assessee had reiterated the same things as in the original proceedings and furnished same photographs in respect of activities claimed to have carried out.
6. In the proceedings, for grant of approval u/s 80G of the Act, the order of Ld. CIT(E) reveals that the issues for which the approval was denied in the first round was on account of misrepresentation of facts regarding the expenses incurred for the purpose of religious activities; the Ld. CIT( E) in the first round had noted that the assessee had stated to have not incurred any expenses for religious activities but was found to be actually conducting religious activities.
7. In the second round before him, he noted the assessee’s failure to furnish any explanation with respect to the misrepresentation of facts and on the issue of religious institution and accordingly coupled with the fact that assessee had not been granted registration u/s 12AB of the Act, the assessee’s application seeking approval u/s 80G of the Act was rejected.
8. Before us, two fold contentions were raised by the ld. Counsel for the assessee:-
i) That the order passed u/s 12AB of the Act in the second round was barred by limitation.
9. That on merits the explanation sought by the Ld. CIT(E) regarding the production of books of accounts, vouchers and bills of expenses was a voluminous data and the assessee had sought an opportunity to present the same physically to the Ld. CIT(E), which was not granted by him. His contention was that the assessee was now in a position to offer complete explanation on the issues raised if granted an opportunity of hearing.
10. On the aspect of the order passed u/s 12AB being barred by limitation, the argument of the ld. Counsel for the assessee before us was that, Section 153 sub-Section (3) of the Actrequired the order to be passed by the Ld. CIT(E) in set aside proceedings in pursuance to the order passed by the ITAT u/s 254 of the Act, before the expiry of 9 months from the end of financial year in which the order u/s 254 of the Act is received by the Principal Chief Commissioner or the Chief Commissioner or Principal Commissioner or Commissioner as the case may be. Our attention was drawn to the provisions of Section 153(3) which read as under:-
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Time limit for completion of assessment, reassessment and recomputation.
153 ..
(3) Notwithstanding anything contained in sub-sections (1) 10[, (1A)] and (2), an order of fresh assessment or fresh order under section 92CA, as the case may be, in pursuance of an order under 11[section 250 or] section 254 or section 263 or section 264, setting aside or cancelling an assessment, or an order under section 92CA, as the case may be, may be made at any time before the expiry of nine months from the end of the financial year in which the order under 11[section 250 or] section 254 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the 12[Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be] :
Provided that where the order under 11[section 250 or] section 254 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the 12[Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be,] on or after the 1st day of April, 2019, the provisions of this sub-section shall have effect, as if for the words “nine months”, the words “twelve months” had been substituted.
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11. Hecontended that in the facts of the present case, the order passed in the first round was on 31.03.2023 while in pursuance to the order of the ITAT, the ld. CIT(E) had passed an order on 27.01.2026 which is well beyond the period prescribed u/s 153(3) of the Act.
12. We have gone through the provisions of Section 153(3) of the Act, and we find that same are not applicable to the facts of the present case. Section 153(3) speaks about an order of assessment in pursuance of an order u/s 254 of the Act. The order passed in the present case cannot be termed as order of assessment since it deals with the application of the assessee seeking registration/approval u/s 12AB/80G of the Act. The order passed in these proceedings do not relate to the assessment of income of the assessee. Therefore, the provisions of Section 153(3) of the Act are of no assistance to the assessee.
13. The contention of the ld. Counsel for the assessee therefore, that by virtue of Section 153(3) of the Act, the order passed by Ld. CIT(E) in the present case is barred by limitation is found to be untenable in law and is accordingly rejected.
14. The ld. Counsel for the assessee also drew our attention to the provisions of Section 12AA of the Act for supporting his contention that the order passed in the present case was barred by limitation. He drew our attention to sub-Section (2) of Section 12AA of the Act which reads as under:-
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Procedure for registration.
12AA………….
(2) Every order granting or refusing registration under clause (b) of sub-section (1) shall be passed before the expiry of six months from the end of the month in which the application was received under clause (a) or clause (aa) or clause (ab) of sub-section (1) of section 12A.
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15. Referring to the same, he contended that, the order in the second round ought to have been passed within six months from the end of the month in which the order was passed by the ITAT setting aside the issue to the Ld. CIT(E) for de novo consideration. He contended that the fact that the matter had been restored back by the ITAT to the Ld. CIT(E) for de novo consideration meant that the application noted to be reconsidered afresh by the Ld. CIT(E), and therefore, the provisions of Sub-Section (2) were to be invoked as per which the Ld. CIT(E) was required to pass an order within six months from the end of the month in which the application was received.
16. We are not in agreement with the contention of the ld. Counsel for the assessee, since sub-section (2) of Section 12AA speaks of application received under clause (a) or clause (aa) or clause (ab) of Section 12A(1) of the Act. The said Clauses read as under:-
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Conditions for applicability of sections 11 and 12. 12A.82 (1) The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely:—
(a) the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form83 and in the prescribed manner to the Principal Commissioner or Commissioner before the 1st day of July, 1973, or before the expiry of a period of one year from the date of the creation of the trust or the establishment of the institution, whichever is later and such trust or institution is registered under section 12AA :
Provided that where an application for registration of the trust or institution is made after the expiry of the period aforesaid, the provisions of sections 11 and 12 shall apply in relation to the income of such trust or institution,—
(i) from the date of the creation of the trust or the establishment of the institution if the Principal Commissioner or Commissioner is, for reasons to be recorded in writing, satisfied that the person in receipt of the income was prevented from making the application before the expiry of the period aforesaid for sufficient reasons;
(ii) from the 1st day of the financial year in which the application is made, if the Principal Commissioner or Commissioner is not so satisfied:
Provided further that the provisions of this clause shall not apply in relation to any application made on or after the 1st day of June, 2007;
(aa) the person in receipt of the income has made an application for registration of the trust or institution on or after the 1st day of June, 2007 in the prescribed form and manner to the Principal Commissioner or Commissioner and such trust or institution is registered under section 12AA;
(ab) the person in receipt of the income has made an application for registration of the trust or institution, in a case where a trust or an institution has been granted registration under section 12AA or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)], and, subsequently, it has adopted or undertaken modifications of the objects which do not conform to the conditions of registration, in the prescribed form and manner, within a period of thirty days from the date of said adoption or modification, to the Principal Commissioner or Commissioner and such trust or institution is registered under section 12AA;
17. A perusal of these clauses of Section 12A(1) of the Act reveals that they refer to applications made initially for grant of registration u/s 12A of the Act. The said sections cannot be read as referring to the applications which are there before the Ld. CIT(E) in the second round by virtue of order passed by the ITAT u/s 254 of the Act. Therefore, this argument of the ld. Counsel for the assessee is also found to be bereft of any merit and is rejected.
18. Coming to the last contention raised by the ld. Counsel for the assessee that voluminous data were required to submit to ld. CIT(E) for satisfying him on the issues raised rejecting assessee’s application both u/s 12A and 80G of the Act in the first and for which sufficient opportunity was not granted by the Ld. CIT(E) and that the assessee was in possession of documents to demonstrate his case, noting the same, therefore we consider it fit to restore the issue back to the file of ld. CIT(E) to grant opportunity to the assessee to either physically place all the documents before him if requested for or to take them on record electronically and after giving due opportunity of hearing to the assessee to re-decide the application filed by the assessee both u/s 12A and 80G of the Act. Since this is the third round before the Ld. CIT(E) and a lot of time has elapsed since the initial application was filed 21.09.2022, the ld. CIT(E) is directed to pass the order within four months of the receipt of our order as above.
19. In effect, both the appeals of the assessee are allowed for statistical purposes.
Order pronounced in the Open Court on 10.08.2026.
