SARASVATI EDUCATION SOCIETY,MUMBAI vs. COMMISSIONER OF INCOME TAX (EXEMPTIONS), MUMBAI

Per Saktijit Dey, Vice President:

This appeal by the assessee arises out of order dated 31.03.2026 passed by learned

Commissioner of Income Tax (Exemptions), Mumbai (‘ld.CIT(E) for short), rejecting

assessee’s application seeking approval u/s. 80G of the Income Tax Act, 1961 (‘the Act’

for short).

Shri Rajdeep Singh, learned CIT (DR). Briefly stated, the assessee is a Trust created on

03.07.1950 and is registered with Charity Commissioner under the Maharashtra Public

Charity Trusts Act, 1950. The assesse, basically, is engaged in educational activities and

runs three schools. The assesse, being engaged in educational activity, was claiming

2 ITA No. 4793/Mum/2026 (A.Y.2026-27) Sarasvati Education Society vs. CIT(E) exemption u/s. 10(22) of the Act. However, after introduction of section 10(23C) of the

Act, providing exemption to educational institution, the assessee started claiming

exemption u/s. 10(23C)(iiiab) of the Act. The assessee was also granted approval u/s. 80G

of the Act in past years and the latest order granting approval to the assessee was passed

on 24.09.2021 from A.Ys. 2022-23 to 2026-27.

for renewal of approval u/s. 80G of the Act. After receiving the application, ld. CIT(E)

issued a notice to the assessee on 09.01.2026 seeking certain details. In reply, the assessee

vide letter dated 16.01.2026 furnished the details. However, by the impugned order, ld.

CIT(E) rejected assessee’s application for renewal on the reason that approval u/s.

80G(5)(i) of the Act can be granted to an institution or fund to which section 11, 12 or

clause (23AA) or clause (23C) of section 10 of the Act applies. He observed, since the

assessee does not fulfil the aforesaid criteria in view of non-availability of registration u/s.

12A of the Act, no approval u/s. 80G of the Act is available. As discussed earlier, the

assessee, being a Trust engaged in educational activities, does not require registration u/s.

12A of the Act for the purpose of claiming exemption u/s.11 of the Act, since, there are

specific provisions u/s. 10 of the Act, providing exemption to Trust/institution engaged in

educational activity. As stated earlier, the assessee was earlier claiming exemption u/s.

10(22) of the Act which is evident from the assessment orders passed for A.Ys. 1993-94

and 1994-95 placed on record. In fact, after introduction of section 10(23C) of the Act, the

assessee made application for grant of approval u/s. 10(23C) of the Act in the prescribed

manner. However, ld. DIT(E) did not grant approval stating that the assessee is covered

u/s. 10(23C)(iiiab) of the Act, which does not require any approval. A reading of section

3 ITA No. 4793/Mum/2026 (A.Y.2026-27) Sarasvati Education Society vs. CIT(E) 10(23C)(iiiab) of the Act makes it clear that any university or other educational institution

existing solely for educational purposes and not for purposes of profit, and which is wholly

or substantially financed by the Government is eligible to claim exemption. There is no

condition enshrined therein requiring approval or registration. In other words, an

educational institution existing solely for educational purpose and wholly and substantially

financed by the government is eligible for exemption without requiring any approval of the

competent authority. In view of such statutory mandate, assessee’s application seeking

approval u/s. 10(23C)(vi) of the Act was not acted upon by ld. DIT(E). Thus, in our view,

ld. CIT(E) has completely misinterpreted the relevant statutory provisions which misled

him to reject assessee’s application seeking approval u/s. 80G of the Act.

rejected by the A.O. while completing assessment in A.Y. 2008-09. However, while

deciding assessee’s appeal challenging such decision of the A.O., learned first appellate

authority, vide order dated 31.01.2018, had clearly and categorically held that the assessee

is eligible to claim exemption u/s. 10(23C)(iiiab) of the Act.

against the aforesaid decision of learned first appellate authority, the department has not

preferred any appeal. Thus, there cannot be any manner of doubt that the assessee, in fact,

is covered u/s. 10(23C)(iiiab) of the Act. Hence, assessee’s application seeking approval

u/s. 80G of the Act could not have been rejected. More so, when the assessee had received

such approval in the past assessment years upto A.Y. 2026-27. In view of the aforesaid, we

direct ld. CIT(E) to grant approval u/s. 80G of the Act to the assessee. At this stage, we

4 ITA No. 4793/Mum/2026 (A.Y.2026-27) Sarasvati Education Society vs. CIT(E) must make it clear, the competent authority retains the power to review the approval

granted in case of violation of any conditions prescribed u/s. 80G of the Act.

Order pronounced in the open court on 29.07.2026

Sd/- Sd/- (Girish Agrawal) (Saktijit Dey) Accountant Member Vice President Mumbai; Dated : Roshani, Sr. PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(A) 4. CIT - concerned 5. DR, ITAT, Mumbai 6. Guard File BY ORDER,

(Dy./Asstt. Registrar) ITAT, Mumbai