DESAI FOUNDATION FOR CHANGE,MUMBAI vs. CIT (EXEMPTIONS), MUMBAI

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ITA 4593/MUM/2026Status: DisposedITAT Mumbai31 July 2026AY 2026-276 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the rejection of the 12AB application was set aside by a co-ordinate bench. Therefore, the sole basis for rejecting the 80G application no longer existed. The matter was restored to the CIT(E) for fresh adjudication.

What were the facts?

The assessee trust applied for renewal of approval under section 80G. The CIT(E) rejected the application solely because the assessee's application for registration under section 12AB was also rejected.

What were the issues?

Whether the rejection of an 80G application based solely on the rejection of a 12AB application is sustainable when the 12AB rejection is subsequently set aside.

Which sections of the Income-tax Act were involved?

Section 80G,Section 12AB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, MUMBAI

Before: SHRI SAKTIJIT DEY, HON’BLE & SHRI MAKARAND VASANT MAHADEOKAR, HON’BLE

For Appellant: Shri Gunjan Kakkad
For Respondent: Shri Rajdeep Singh CIT-DR

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, HON’BLE VICE PRESIDENT AND SHRI MAKARAND VASANT MAHADEOKAR, HON’BLE JUDICIAL MEMBER ITA No. 4593 /MUM/2026 (Assessment Year 2026-27) DESAI FOUNDATION FOR CIT (Exemptions), CHANGE Mumbai 3RD FLOOR, JANHANGIR BUILDING, 133 M.G. ROAD MUMBAI- 400 001 PAN NO. AAATP3122A Assessee by Shri Gunjan Kakkad Revenue by Shri Rajdeep Singh CIT-DR Date of Hearing 24 / 07 / 2026. Date of Pronouncement 31 / 07 / 2026.

ORDER PER: SHRI MAKARAND VASANT MAHADEOKAR : The present appeal has been preferred by the assessee trust against the order dated 04.03.2026 passed by the learned Commissioner of Income Tax (Exemptions), Mumbai [“CIT(E)”], whereby the application in Form No.10AB filed by the assessee on 29.09.2025 seeking renewal of approval under section 80G of the Income-tax Act, 1961 [“the Act”], under clause (ii) of the first proviso to sub-section (5) of section 80G, was rejected.

2 ITA No. 4593/Mum/2026 (Assessment Year 2026-27) 2. The assessee has raised the following grounds of appeal: 1. On the facts and in the circumstances of the case, the Learned Commissioner of Income Tax (Exemptions) erred in rejecting application in form 10AB filed u/s.80G under clause (ii) of the first proviso to sub-section (5) of section 80G. 2. The Learned Commissioner of Income Tax (Exemptions) erred in law and on facts in passing the impugned order without granting adequate and sufficient opportunity of being heard to the Appellant and thereby violated the principles of natural justice. 3. The Learned Commissioner of Income Tax (Exemptions) ought to have granted approval under section 80G to the Appellant on the basis of the documents and explanations furnished along with the application. 4. The Commissioner of Income Tax (Exemptions) be directed to consider the application (as originally submitted) and/or fresh application submitted by the Appellant on 12/03/2026 for renewal of registration. 5. Without prejudice to the foregoing grounds, the Appellant prays that one more effective opportunity be granted to it and the matter be restored to the file of the Learned Commissioner of Income Tax (Exemptions) for fresh adjudication after considering all material placed on record. 6. The Appellant craves leave to add, to amend or alter the above ground(s) of Appeal.

3 ITA No. 4593/Mum/2026 (Assessment Year 2026-27) 3. The relevant facts are that the assessee filed Form No.10AB on 29.09.2025 seeking renewal of approval under section 80G under clause (ii) of the first proviso to sub-section (5) of section 80G. The assessee had also filed, on the same date, a separate application in Form No.10AB seeking renewal of registration under section 12AB under clause (ii) of clause (ac) of sub-section (1) of section 12A. The impugned order records that the latter application had been rejected vide order dated 02.03.2026.

4.

In the impugned order, the learned CIT(E) referred to section 80G(5)(i) and held that, in view of the rejection of the assessee’s application for registration under section 12AB, the assessee did not fulfil the condition contemplated therein. On that basis alone, the application for approval under section 80G was held to be untenable and was rejected.

5.

The learned AR reiterated the facts of the case and submitted that the assessee’s appeal arising from the rejection of its application for registration under section 12AB had already been heard and disposed of by the Co-ordinate Bench in ITA No.4592/Mum/2026 vide order dated 29.06.2026. He, therefore, submitted that since the assessee’s application under section 80G had been rejected solely as a consequence of the

4 ITA No. 4593/Mum/2026 (Assessment Year 2026-27) rejection of its application under section 12AB, the present matter may also be restored to the file of the learned CIT(E) for fresh adjudication as a consequential relief.

6.

The learned Departmental Representative relied upon the impugned order.

7.

We have considered the material placed on record. We find from the order dated 29.06.2026 passed by the Co-ordinate Bench in ITA No.4592/Mum/2026 that the rejection of the assessee’s application for registration under section 12AB was set aside and the application was restored to the file of the learned CIT(E) for fresh adjudication. Thus, the sole foundation on which the impugned order under section 80G was passed does not presently survive, since the rejection of the application under section 12AB has itself been set aside and that application stands restored for fresh adjudication. At the same time, approval under section 80G is subject to fulfilment of the statutory conditions, which are required to be examined by the competent authority. We, therefore, consider it just and proper to restore the consequential proceedings under section 80G also to the file of the learned CIT(E).

5 ITA No. 4593/Mum/2026 (Assessment Year 2026-27) 8. Accordingly, the impugned order dated 04.03.2026 is set aside and the assessee’s application in Form No.10AB dated 29.09.2025 seeking renewal of approval under section 80G is restored to the file of the learned CIT(E) for fresh adjudication in accordance with law, after taking into account the outcome of the restored proceedings relating to registration under section 12AB. The learned CIT(E) shall afford a reasonable opportunity of hearing to the assessee and shall pass a reasoned and speaking order. The assessee shall furnish the documents, explanations and particulars as may be called for and shall cooperate in the proceedings. We make it clear that we have expressed no opinion on the merits of the assessee’s eligibility for approval under section 80G. 9. Ground Nos.1 to 5 are, accordingly, allowed for statistical purposes. Ground No.6 being general in nature requires no separate adjudication. 10. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced on 31 /07/2026 under Rule 34(4) of the Income Tax Appellate Tribunal Rules,1963.

Sd/- Sd/- (SAKTIJIT DEY) (MAKARAND VASANT MAHADEOKAR) VICE PRESIDENT ACCOUNTANT MEMBER

6 ITA No. 4593/Mum/2026 (Assessment Year 2026-27) Dated : 31/ 07/ 2026. Pritesh Vaishnav PS True Copy Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File

BY ORDER,

ASSISTANT REGISTRAR ITAT, MUMBAI

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