INDIAN PHARMACEUTICAL ASSOCIATION,INDORE vs. CIT EXEMPTION, BHOPAL

ITA 748/IND/2026Status: DisposedITAT Indore10 August 2026AY 2025-2626 pages
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What did the Tribunal hold?

The Tribunal held that in cases where the CIT(E) rejected an application for registration under Section 12A due to the department's own inaction in deciding a previously set-aside matter for over 12 years, the application should be deemed to have been allowed. The assessee cannot be penalized for the department's failure to act within the prescribed timelines. The CIT(E) was directed to examine the current application under present law after hearing the assessee. In another instance, where the CIT(E) rejected an application due to delay in filing Form 10AB without condoning it, the Tribunal directed the CIT(E) to condone the delay and decide the application on merits, acknowledging the Commissioner's power to condone delays. Regarding the classification of objects as religious, the Tribunal set aside the matter to the CIT(E) to allow the assessee an opportunity to explain the educational and moral aspects of its trust objects and the nature of expenditures incurred, especially when the revenue representative had no objection. Finally, where an application was rejected for expenditures not being for the trust's objects, the Tribunal set aside the matter to the CIT(E) to grant the assessee an opportunity to furnish details of expenditures and explain how they fulfilled the trust's objects, before deciding on merits.

What were the facts?

The Income Tax Appellate Tribunal (ITAT) heard multiple appeals filed by various assessees against orders passed by the Commissioner of Income Tax (Exemption) [CIT(E)]. The appeals concerned applications for registration under Section 12A/12AB of the Income Tax Act, 1961, and approval under Section 80G. In several cases, the CIT(E) had rejected these applications. The common thread across many appeals was the rejection of applications due to alleged non-compliance, delay in filing forms, or misinterpretation of the trust's objects and activities. The assessment years varied, with some being unspecified (N.A.) and others being 2022-23, 2024-25, 2025-26, and 2026-27. The ITAT consolidated these appeals for disposal.

What were the issues?

1. Whether the rejection of the assessee's application for registration under Section 12A of the Act was justified, particularly when a previous set-aside proceeding by the Tribunal remained undecided by the CIT for over 12 years, and if the assessee can be penalized for the department's inaction. (Assessee's contention: The application should be deemed allowed due to departmental inaction. Revenue's contention: Not recorded). 2. Whether the CIT(E) erred in rejecting the application for registration under Section 12AB on grounds of delay in filing Form 10AB, without considering the Commissioner's power to condone such delays. (Assessee's contention: Delay should be condoned as per amended provisions. Revenue's contention: Not recorded). 3. Whether the CIT(E) correctly classified the assessee's objects and activities as purely religious, thereby disqualifying it for Section 80G(5) approval, and if another opportunity should be granted to explain the educational and moral aspects of its activities. (Assessee's contention: Objects are educational and promote morality; expenses are for general welfare. Revenue's contention: No objection to setting aside for further examination). 4. Whether the rejection of the application for registration under Section 12AB was justified on the ground that expenditures were not for the objects of the Trust, and if the assessee should be given an opportunity to explain the nature of expenditures. (Assessee's contention: No opportunity was provided; seeks an opportunity to explain. Revenue's contention: Not recorded).

Which sections of the Income-tax Act were involved?

Section 12A,Section 12AB,Section 80G(5),Section 153

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Heard together (2 matters)

I.T.A. No.583/Ind/2026
I.T.A. No. 672/Ind/2026

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

IN THE INCOME TAX APPELLATE TRIBUNAL “DB” BENCH, INDORE

BEFORE SHRI PARESH M. JOSHI, JUDICIAL MEMBER & 105-B, VIKRAM URBANE, NEW AAYAKAR BHAWAN, A - BEHIND HOTEL SAYAJI, VIJAY BLOCK, ROOM NO. 305, 3RD NAGAR, INDORE-452010, FLOOR, 47, ARERA HILLS, MADHYA PRADESH NARMADAPURAM ROAD BHOPAL-462011, MADHYA PRADESH [PAN No. AAOCA9170A] (Appellant) .. (Respondent)

Authorised Representative : CA Shri Apurva Mehta & CA Shri Rajesh Mehta Departmental Representative: Shri Anup Singh, CIT-DR AIC-PRESTIGE INSPIRE CIT EXEMPTION FOUNDATIONAIC-PRESTIGE ROOM NO 201 2ND FLOOR INSPIRE FOUNDATION REAC BHOPAL M.P. 462016 3RD FLOOR, BLOCK -C BHOPAL-462016, MADHYA Vs. PRESTIGE VIHAR SCH NO 74-C PRADESH VIJAY NAGAR, INDORE, INDORE-452010, MADHYA PRADESH [PAN No. AARCA1971A] (Appellant) .. (Respondent)

Authorised Representative : Adv. Shri Ashish Goyal & Adv. Sh. N.D. Patwa Departmental Representative: Shri Anup Singh, CIT-DR

ITA Nos. 583/Ind/2026 & others - 2–

I.T.A.

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