JAYCEES FOUNDATION OF INDIA,MUMBAI vs. COMMISSIONER OF INCOME TAX (EXEMPTIONS), MUMBAI, MUMBAI
IN THE INCOME-TAX APPELLATE TRIBUNAL “F” BENCH,
MUMBAI
BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER
&
SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER
&
Jaycees
Foundation of India
506, 5th Floor, Windfall, Sahar
Mumbai
Plaza,
Mulgaon,
Andheri(E),
J.B.
Nagar,
Mumbai
–
400
059,
Maharashtra v/s.
बनाम
Commissioner of Income Tax
(Exemptions)
601, 6th Floor, Cumballa Hill,
MTNL TE Building,
Pedder
Road, Dr. Gopalrao Deshmukh
Marg, Cumballa Hill, Mumbai
– 400 026, Maharashtra
स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAGCJ4591E
Appellant/अपीलार्थी
..
Respondent/प्रतिवादी
Appellant by :
Ms. Chaitee Londhe, AR
Respondent by :
Shri Vivek Perampurna (CIT-DR)
Date of Hearing
30.10.2025
Date of Pronouncement
20.11.2025
आदेश / O R D E R
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 P a g e | 2
ITA No. 5442 &5443/Mum/2025
Jaycees Foundation of India heard together, they are being taken up together for adjudication vide this composite order for the sake of brevity. We take up ITA No.
5443/Mum/2025 first.
2. The grounds of both the appeals are as under:-
1. The Learned Commissioner of Income Tax (Exemptions) erred in facts and in law, in rejecting the application for registration made by the Appellant under section 12A(1)(ac)(iii) of the Income-tax Act, 1961 (“the Act”).
2. The Learned Commissioner of Income Tax (Exemptions) erred in facts and in law, in not granting registration under section 12AB(1)(b) of the Act.
3. The Learned Commissioner of Income Tax (Exemptions) erred in facts and in law, in holding that the Appellant committed a “specified violation” within the meaning of Explanation to section 12AB(4) of the Act, on the ground that approval/NOC from the Charity Commissioner under the Maharashtra
Public Trusts Act, 1950 had not yet been obtained for conversion of the erstwhile Trust into a company registered under section 8 of the Companies
Act, 2013 (“Section 8 company”).
4. The Learned Commissioner of Income Tax (Exemptions) erred in facts and in law, in not appreciating that there is no specific provision in the Maharashtra Public Trusts Act, 1950 which requires prior approval/NOC from the Charity Commissioner before conversion of a Trust into a Section 8
company; and therefore, there was no violation in compliance of any requirements of the said law.
5. The Learned Commissioner of Income Tax (Exemptions) erred in not appreciating that, as a matter of prudence and good practice, the Appellant had duly filed an application/letter before the Charity Commissioner seeking approval for conversion into a Section 8 company, which remained pending and undisposed of.
6. Without prejudice to ground no. 4, assuming without conceding that the Appellant was required to obtain prior approval/NOC from the Charity
Commissioner before conversion; the learned Commissioner of Income Tax
(Exemptions) erred, in not 6 appreciating that such non-compliance is merely a procedural default and not material for the purpose of achieving its objects as stipulated under item (B) of sub-clause (i) of clause (b) of sub- section (1) of section 12AB of the Act and therefore should not lead to rejection of application made by the Appellant.
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ITA No. 5442 &5443/Mum/2025
Jaycees Foundation of India
According to the impugned order, the applicant Trust filed an application in Form 10AB u/s 12A(1)(ac)(iii) seeking registration under section 12AB of the Act. The relevant procedural mandate is governed by the provisions of Rule 17A of the IT Rules. The sub rule (2) of Rule 17A mandates that the application in Form 10AB is to be accompanied by specific documents. On verification of the application and accompanying documents, it was noticed by the ld.CIT(E) from the Memorandum of Association(‘MOA’) that the applicant was earlier registered as a Trust with name INDIAN JAYCESS CHARITABLE TRUST and it had converted into JAYCEES FOUNDATION OF INDIA under the provisions of Chapter XXI Part I of the Companies Act 2013 i.e. the Trust had converted into Section 8 company. According to him, conversion of a Charitable Trust into Section 8 company required it to make necessary compliance under the Maharashtra Public Trusts Act, 1950 which included NOC/Order of Charity Commissioner approving the conversion and other such requirements. In response to a show cause issued in this regard, it was asked to submit copy of NOC/Order of Charity Commissioner approving the conversion of Trust into section 8 company, information regarding proof of activities, proof of expenses, details of presidential academy expense, details of training to members and presidents and copy of bank statements etc. In response it was submitted that it was yet to receive NOC/Order of approval from the Charity Commissioner
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ITA No. 5442 &5443/Mum/2025
Jaycees Foundation of India which implied that the applicant went ahead with conversion of Trust into Section 8 company without obtaining the NOC/Order of approval from the Charity Commissioner. Thus, the trust had not complied with the requirements of Maharashtra Public Trusts Act, 1950and thus had committed
‘Specified Violation’ within the meaning of Explanation to section 12AB(4) of the Act. Since Registration/approval under section 12AB was to be granted in terms of the provisions of section 12AB(1)(b) of the Act after being satisfied about the objects of the trust or institution, the genuineness of activities, and the compliance of any other law for the time being in force were material for the purposes of achieving its objects. In absence of necessary compliance made by the applicant against the violations raised as above, he concluded that the applicant was not fulfilling the stipulated conditions prescribed for approval of application filed in Form 10AB. As such, the application for grant of registration was rejected.
4. In the course of hearing before us, the ld.AR contended that the Trust under the Maharashtra Public Trust Act, 1950 was converted into a company on 31-05-2024 as per the provisions of Chapter XXI Part I of the Companies Act, 2013 and was issued a license under section 8 of the said Act.
It was submitted that there is no specific provision in the Maharashtra Public
Trusts Act, 1950 which required prior approval/NOC from the Charity
Commissioner before conversion of a Trust into a Section 8 company.
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ITA No. 5442 &5443/Mum/2025
Jaycees Foundation of India
Therefore, there was no violation in compliance of any requirements of the said law. As a matter of good practice, the trust had also filed a letter before the Charity Commissioner giving intimation of the conversion. No adverse order or objection had been received by it from the Charity Commissioner subsequently.
4.1 Without prejudice to the above, it is pleaded that assuming without conceding that there is a non-compliance with the provisions of Maharashtra
Public Trust Act, 1950, in absence of any “order, direction or decree, by whatever name called, holding that such non-compliance has occurred as referred to in clause (1) of the Explanation to Section 12AB(4) of the Act, the said section does not get attracted. Besides, the said requirements are not of such nature which are “material for the purpose of achieving its objects” as envisaged in Section 12AB(1)(b)(i)(B) which has been referred to in clause (f) of the Explanation to Section 12AB(4) of the Act. Therefore, even for this reason, the alleged non-compliance cannot be said to be a “Specified
Violation” and Section 12AB(4) is not attracted. Thus, the ld. CIT(E) is not justified in rejecting the application for registration under section 12A(1)(ac)(iii) of the Act, without even citing the provision of Maharashtra
Public Trust Act, 1950 which required prior NOC of the Charity Commissioner for conversion of a Trust into a Section 8 Company and application made under section 12A(1)(ac)(iii) of the Act and consequently, the application for P a g e | 6
ITA No. 5442 &5443/Mum/2025
Jaycees Foundation of India registration made under section 80G of the Act should be allowed. The ld.CIT-
DR relied on the impugned order.
5. We have carefully considered all the relevant facts of the case. The ld.CIT(E) rejected the application of registration of the Trust on the only ground that it did not take No Objection Certificate from the Charity
Commissioner before getting converted into section 8 company as per
Companies Act. It may be mentioned here that as per the Companies Act of 2013, a Section 8 company is a company formed for charitable or other useful objects of any public nature. It is a non-profit entity registered under the Companies Act, 2013, with objectives such promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, or environmental protection, applying its profits or income solely for promoting its objectives and prohibiting distribution of dividends to its members. Section 8 companies enjoy better governance, credibility, and government recognition compared to societies or trusts. The definition or meaning of charitable purpose are almost similar in the section 8(1) of the Companies Act, 2013
and section 2(15) read with section 11 and 13 of the Act. The