PARICHAY TRUST,MUMBAI vs. CIT(EXEMPTIONS), MUMBAI

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ITA 4857/MUM/2026Status: DisposedITAT Mumbai31 July 2026AY 2026-202712 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the rejection was based on procedural non-compliance without examining the merits and that the assessee should be given an effective opportunity to present its case. The rejection of the 80G application was consequential to the 12AB rejection.

What were the facts?

The assessee trust applied for renewal of registration under Section 12AB and approval under Section 80G. The CIT(E) rejected both applications due to alleged non-compliance with a notice, despite the assessee claiming an adjournment request was filed.

What were the issues?

Whether the rejection of applications for registration and approval due to alleged non-compliance, without a proper hearing or examination of merits, was justified.

Which sections of the Income-tax Act were involved?

Section 12AB,Section 80G

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 Bhavik Shah
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. 4856 And 4857 /MUM/2026 (Assessment Year 2026-27) PARICHAY TRUST CIT (Exemptions), MAHATMA GANDHI Mumbai MEMORIAL B NETAJI SUBHASH RD ,CHARNI RD MUMBAI 400002 ,Maharashtra PAN No. AAATP3122A Assessee by Shri Bhavik Shah 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 : These two appeals by the assessee are directed against two separate orders, both dated 25.02.2026, passed by the learned Commissioner of Income Tax (Exemptions), Mumbai [“CIT(E)”], in Form No. 10AD. ITA No. 4856/Mum/2026 arises from the rejection of the assessee’s application for renewal of approval under section 80G of the Income-tax Act, 1961 [“the Act”], whereas ITA No. 4857/Mum/2026 arises from the rejection of its application for renewal of registration

2 ITA No. 4856 and 4857/Mum/2026 (Assessment Year 2026-27) under section 12AB of the Act. Since the applications are connected and the rejection under section 80G is founded upon the rejection under section 12AB, both appeals were heard together and are being disposed of by this common order.

2.

The assessee, Parichay Trust, is stated to have been established on 09.07.1959 with the primary object of promoting and disseminating book culture, education and literature for the benefit of society at large. According to the statement of facts, the assessee carries on literary, educational and cultural activities for the advancement of knowledge and intellectual development without any profit motive.

3.

In relation to registration under section 12A, the statement of facts records that the assessee held registration under the erstwhile regime dated 07.04.1975. It thereafter filed Form No. 10A on 07.02.2022 and was granted registration under section 12A(1)(ac)(vi) by order dated 16.02.2022, stated to be effective from assessment year 2022-23 and valid up to assessment year 2026-27. On 22.09.2025, the assessee filed Form No. 10AB under section 12A(1)(ac)(ii) seeking renewal of registration under section 12AB.

3 ITA No. 4856 and 4857/Mum/2026 (Assessment Year 2026-27) 4. On verification of the application, the CIT(E) found that it was incomplete and that all documents required to accompany it had not been furnished. A notice dated 08.01.2026 was accordingly issued requiring the assessee to furnish the documents and details contemplated under Rule 17A(2). The statement of facts records that the information was required by 14.01.2026 and that, before the stipulated date, the authorised representative filed an adjournment request through the e-filing portal because he was occupied with time-barring submissions and statutory hearings in other matters. It is the assessee’s case that neither a revised hearing date nor any communication accepting or rejecting the adjournment request was received.

5.

The CIT(E), observing that the assessee had not complied with all the terms of the notice and that, in the absence of the necessary compliance, satisfaction regarding the objects, genuineness of activities and compliance with other applicable laws could not be recorded, rejected the application for renewal of registration under section 12AB by the impugned order dated 25.02.2026.

6.

As regards approval under section 80G, the statement of facts records that the assessee held approval under the erstwhile regime

4 ITA No. 4856 and 4857/Mum/2026 (Assessment Year 2026-27) dated 24.11.2008. It filed Form No. 10A on 07.02.2022 and was granted approval by order dated 16.02.2022, stated to be effective from assessment year 2022-23 and valid up to assessment year 2026-27. The assessee thereafter filed Form No. 10AB on 22.09.2025 under clause (ii) of the first proviso to section 80G(5) for renewal of approval.

7.

In the order concerning section 80G, the CIT(E) noted that the assessee’s application for renewal of registration under section 12AB had been rejected by order dated 25.02.2026. Referring to the condition prescribed in section 80G(5)(i), the CIT(E) held that the application for approval under section 80G had thereby become untenable and rejected it by a separate order of the same date.

8.

Aggrieved, the assessee is in appeal before us. The grounds raised in ITA No. 4856/Mum/2026 are : 1. The Learned CIT(E) proceeded to pass the order of rejection without the Appellant having received a definitive response or a revised date following the adjournment request filed on the portal. It is humbly submitted that the Appellant was under a bona fide belief that the request for additional time was under consideration, and the lack of a fresh hearing date resulted in an inadvertent non- compliance.

5 ITA No. 4856 and 4857/Mum/2026 (Assessment Year 2026-27) 2. The rejection based on procedural non-compliance is overly technical. The CIT(E) should have looked at the charitable nature of the objects rather than rejecting the application on a preliminary stage. 3. The Appellant submits that the non-filing of the response was due to the preoccupation of their Authorized Representative with other time-barred statutory duties. This constituted a "sufficient cause" for the delay, and the Appellant should not be deprived of its charitable status due to an administrative oversight beyond its direct control. 4. In the interest of equity and justice, the Appellant prays that the matter be remanded back to the file of the Learned CIT(E). The Appellant is now ready and willing to comply with all directions and produce all necessary documents to establish its eligibility for registration. 5. The Appellant prays that the matter should be listed for early hearing as the existing registration under Section 12AB dated 16th February 2022should be extended to the date of final disposal of this appeal. 9. The grounds raised in ITA No. 4857/Mum/2026 are: 1. The Learned CIT(E) proceeded to pass the order of rejection without the Appellant having received a definitive response or a revised date following the adjournment request filed on the portal. It is humbly submitted that the Appellant was under a bona fide belief that the request for additional time was under consideration,

6 ITA No. 4856 and 4857/Mum/2026 (Assessment Year 2026-27) and the lack of a fresh hearing date resulted in an inadvertent non- compliance. 2. The rejection based on procedural non-compliance is overly technical. The CIT(E) should have looked at the charitable nature of the objects rather than rejecting the application on a preliminary stage. 3. The Appellant submits that the non-filing of the response was due to the preoccupation of their Authorized Representative with other time-barred statutory duties. This constituted a "sufficient cause" for the delay, and the Appellant should not be deprived of its charitable status due to an administrative oversight beyond its direct control. 4. In the interest of equity and justice, the Appellant prays that the matter be remanded back to the file of the Learned CIT(E). The Appellant is now ready and willing to comply with all directions and produce all necessary documents to establish its eligibility for registration. 5. The Appellant prays that the matter should be listed for early hearing as the existing registration under Section 12AB dated 16th February 2022 should be extended to the date of final disposal of this appeal. 10. The learned Authorised Representative [“AR”], reiterating the written submissions, submitted that the applications were rejected solely on account of the alleged non-compliance with the notice dated 08.01.2026 and without an effective opportunity of hearing. It was

7 ITA No. 4856 and 4857/Mum/2026 (Assessment Year 2026-27) submitted that the assessee had filed an adjournment request within time, but no communication accepting or rejecting that request and no fresh date of hearing was received. The non-compliance was stated to be inadvertent and attributable to the authorised representative’s preoccupation with time-barring statutory work, and not wilful or deliberate.

11.

The learned AR further submitted that the CIT(E) had not examined the assessee’s objects and activities on merits and had recorded no adverse finding concerning their charitable nature. Reference was made to the assessee’s trust deed, registration with the public trust authorities, audited financial statements and return acknowledgements for assessment years 2022-23 to 2025-26, and a note concerning its charitable activities, which were stated to form part of the material compiled by the assessee. It was prayed that the impugned orders be set aside and renewal be granted. Alternatively, it was prayed that both applications be restored to the file of the CIT(E) for fresh consideration after granting a proper and effective opportunity of hearing.

8 ITA No. 4856 and 4857/Mum/2026 (Assessment Year 2026-27) 12. The learned Departmental Representative relied upon the impugned orders of the CIT(E).

13.

We have considered the rival submissions and perused the material placed on record. The application under section 12AB was rejected because the CIT(E) could not record the requisite satisfaction in the absence of compliance with the notice dated 08.01.2026. Row 10 of Form No. 10AD also records 08.01.2026 as the date on which an opportunity was afforded. No further notice or opportunity is identified in the impugned order. Further, while the assessee has specifically asserted that an adjournment request had been filed on the portal before the time allowed for compliance, the impugned order neither records nor deals with any such request.

14.

We further find that the impugned order states generally that the application was incomplete, that all documents required to accompany it had not been furnished and that the terms of the notice had not been complied with. The order, however, does not identify the particular documents or information that remained outstanding, nor does it record an examination on merits of the material stated to have accompanied the

9 ITA No. 4856 and 4857/Mum/2026 (Assessment Year 2026-27) application, the objects of the assessee or the genuineness of its activities. Thus, the merits of the application remain unexamined.

15.

The assessee has explained the circumstances in which compliance could not be made within the short period allowed and has expressed its readiness to furnish all requisite documents and information. Having regard to the consequences of rejection and, particularly, to the assertion that an adjournment request filed before the due date remained undisposed of, we are of the considered view that the assessee should be afforded one effective opportunity to place the requisite material before the CIT(E). Since the relevant material requires examination and satisfaction at the level of the CIT(E), the assessee’s principal prayer for grant of registration by the Tribunal cannot be accepted at this stage. Its alternative prayer for restoration, however, merits acceptance.

16.

Accordingly, the order dated 25.02.2026 rejecting the application for renewal of registration under section 12AB is set aside and the matter is restored to the file of the CIT(E) for de novo adjudication. The CIT(E) shall communicate to the assessee the specific documents or information, if any, that remain to be furnished; grant a reasonable and effective opportunity to furnish the same; consider the material filed

10 ITA No. 4856 and 4857/Mum/2026 (Assessment Year 2026-27) with the original application as well as any further material furnished by the assessee; and thereafter pass a speaking order in accordance with law. The assessee shall cooperate in the proceedings and furnish the requisitioned material within the time allowed. We make it clear that we have expressed no opinion on the merits of the assessee’s eligibility for registration under section 12AB.

17.

The order rejecting the application under section 80G rests upon the rejection of the application for renewal of registration under section 12AB. Since the order concerning section 12AB has been set aside and that application has been restored for fresh adjudication, the foundation of the consequential rejection under section 80G does not presently survive.

18.

We, therefore, set aside the order dated 25.02.2026 passed in respect of the application under section 80G and restore that application also to the file of the CIT(E). The CIT(E) shall decide it afresh, in accordance with law, after deciding the application under section 12AB and after affording the assessee a reasonable opportunity of being heard. We have expressed no opinion on the merits of the assessee’s eligibility for approval under section 80G.

11 ITA No. 4856 and 4857/Mum/2026 (Assessment Year 2026-27) 19. In view of the above, Ground Nos. 1 to 4 in both appeals are allowed for statistical purposes. Ground No. 5, insofar as it seeks early hearing, does not survive upon disposal of the appeals. No separate direction for extension of the existing registration is called for in these proceedings, as the applications are being restored for fresh adjudication in accordance with law.

20.

In the result, ITA No. 4856/Mum/2026 and ITA No. 4857/Mum/2026 filed by the assessee are 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) ACCOUNTANT MEMBER VICE PRESIDENT

Dated : 31/07 / 2026. Pritesh Vaishnav PS True Copy

12 ITA No. 4856 and 4857/Mum/2026 (Assessment Year 2026-27) 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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