JAYCEES FOUNDATION OF INDIA,MUMBAI vs. COMMISSIONER OF INCOME TAX (EXEMPTIONS), MUMBAI, MUMBAI

ITA 5442/MUM/2025Status: DisposedITAT Mumbai20 November 202510 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(E) rejected the assessee's application for registration solely on the ground that it did not obtain a No Objection Certificate (NOC) from the Charity Commissioner before converting into a Section 8 company. The Tribunal noted that Section 8 companies are registered under the Companies Act, 2013, with objectives similar to charitable purposes under the Income-tax Act, and the Registrar of Companies issues licenses after due diligence. The CIT(E) did not specify any provision mandating prior NOC from the Charity Commissioner for such conversion, nor did the Registrar's certificate imply a violation. The Tribunal also observed that the CIT(E) did not seek clarification from the Charity Commissioner and did not specify the exact "specified violation". Consequently, the Tribunal restored the application for registration under section 12AB to the file of the CIT(E) for de novo adjudication, directing the CIT(E) to communicate with the Charity Commissioner to ascertain the mandatory requirement of NOC. The assessee was also directed to submit the NOC. As the rejection of the section 80G application was consequential to the section 12AB rejection, that matter was also set aside and restored to the CIT(E) for fresh decision. The grounds were allowed for statistical purposes.

What were the facts?

The assessee, Jaycees Foundation of India, filed appeals against orders passed by the Commissioner of Income Tax (Exemptions) [CIT(E)] rejecting its applications for registration under section 12AB and approval under section 80G of the Income-tax Act, 1961. The rejection was based on the CIT(E)'s finding that the assessee, formerly a trust, had converted into a Section 8 company without obtaining prior approval or NOC from the Charity Commissioner under the Maharashtra Public Trusts Act, 1950. The CIT(E) considered this a "specified violation" under section 12AB(4) of the Act. The assessee contended that no such prior approval was mandated by the Maharashtra Public Trusts Act, 1950, and that it had merely intimated the conversion. The appeals were heard together.

What were the issues?

1. Whether the Tribunal had to decide if the Learned Commissioner of Income Tax (Exemptions) erred in rejecting the assessee's application for registration under section 12A(1)(ac)(iii) and 12AB(1)(b) of the Income-tax Act, 1961, by holding that the conversion of the trust into a Section 8 company without prior approval from the Charity Commissioner constituted a "specified violation" under Explanation to section 12AB(4). Assessee's Contention: The assessee argued that the Maharashtra Public Trusts Act, 1950, does not require prior approval for such conversion, hence no violation occurred. Even if there was a procedural default, it was not material for achieving the trust's objects as per section 12AB(1)(b)(i)(B), and therefore not a "specified violation". Revenue's Contention: The Revenue relied on the impugned order. 2. Whether the Tribunal had to decide if the Learned Commissioner of Income Tax (Exemptions) erred in rejecting the assessee's application for approval under section 80G(5) of the Income-tax Act, 1961, as a consequence of the rejection of its section 12AB registration application. Assessee's Contention: The assessee argued that the rejection of the 80G application was consequential to the 12AB rejection, and since the 12AB issue was being contested, the 80G application should also be reconsidered. Revenue's Contention: The Revenue relied on the impugned order.

Which sections of the Income-tax Act were involved?

Section 12AB,Section 80G,Section 12A(1)(ac)(iii),Section 12AB(1)(b),Section 12AB(4),Section 80G(5)

AI-generated summary — verify with the full judgment below

Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI PRABHASH SHANKAR

For Appellant: Ms. Chaitee Londhe, AR
For Respondent: Shri Vivek Perampurna (CIT-DR)
Hearing: 30.10.2025Pronounced: 20.11.2025

Heard together (2 matters)

ITA No.5442/MUM/2025
ITA No. 5443/MUM/2025

Read from the judgment's own cause title. This page is filed under one of them.

PER PRABHASH SHANKAR [A.M.] :- The above captioned appeals have been filed by the assessee trust against the orders of even dates as passed by the Learned Commissioner of Income-tax (Exemptions), Mumbai [hereinafter referred to as “CIT(E)"] u/s. section 12AB and 80G of the Income-tax Act, 1961 [hereinafter referred to as “Act”]. Since the issues are interlinked and also the fact that appeals were heard together, they are being take

The order continues below.

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