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

ITA 5443/MUM/2025Status: DisposedITAT Mumbai20 November 202510 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(E) had not specified any particular provision of the Maharashtra Public Trusts Act, 1950, that mandated prior NOC for the conversion of a trust into a Section 8 company. The Registrar of Companies had already issued the incorporation certificate and license under Section 8, implying due diligence. The CIT(E) had not sought clarification from the Charity Commissioner before rejecting the application. The Tribunal also noted that the CIT(E) had not specified the exact default constituting a 'specified violation'. Consequently, the Tribunal restored the applications for registration under Section 12AB and approval under Section 80G to the file of the CIT(E) for de novo adjudication. The CIT(E) was directed to communicate with the Charity Commissioner to ascertain the mandatory requirement of NOC. The assessee was also directed to file the NOC at the earliest. The grounds raised were allowed for statistical purposes.

What were the facts?

The assessee, Jaycees Foundation of India (formerly Indian Jaycess Charitable Trust), filed applications for registration under Section 12AB and approval under Section 80G of the Income-tax Act, 1961. The Commissioner of Income-tax (Exemptions) rejected these applications. The primary reason for rejection was the assessee's conversion from a trust to 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 Explanation to Section 12AB(4) of the Act. The assessee contended that no such prior approval was mandated by the Maharashtra Public Trusts Act, and they had merely intimated the Charity Commissioner. The appeals were filed by the assessee against the orders of the CIT(E).

What were the issues?

1. Whether the assessee committed a 'specified violation' under Explanation to Section 12AB(4) of the Income-tax Act, 1961, by converting from a trust to a Section 8 company without obtaining prior approval from the Charity Commissioner under the Maharashtra Public Trusts Act, 1950, thereby warranting rejection of its application for registration under Section 12A(1)(ac)(iii) and Section 12AB(1)(b)? Assessee's contentions: The assessee argued that the Maharashtra Public Trusts Act, 1950, does not contain a specific provision requiring prior approval from the Charity Commissioner for such a conversion. They submitted that they had merely intimated the Charity Commissioner as a matter of good practice and had not received any adverse order. Furthermore, they contended that even if there was a non-compliance, it was a procedural default, not material for achieving the trust's objects, and thus not a 'specified violation' as defined in Section 12AB(4). They also argued that no specific order holding such non-compliance had been issued. Revenue's contentions: The Revenue relied on the impugned order of the CIT(E), which held that the conversion without the Charity Commissioner's NOC constituted a 'specified violation' and a failure to comply with other laws, leading to the rejection of the application.

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 2(15),Section 11,Section 13,Section 80G(5)(i)

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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