MARIWALA HEATLH FOUNDATION,MUMBAI vs. COMMISSIONER OF INCOME TAX (EXEMPTIONS), MUMBAI

The brief facts borne out from the record are that the assessee, M/s Mariwala Health Foundation, a Section 8 company incorporated under the Companies Act, is engaged in charitable activities in the field of mental health, public awareness, research, advocacy, capacity building, grant- making and allied charitable programmes. The assessee was already holding a valid registration under section 12AB granted in Form No.10AC dated 24.09.2021, valid from Assessment Year 2022-23 to Assessment Year 2026-27. Subsequently, consequent upon amendment carried out in its Memorandum of Association, the assessee filed an application in Form No.10AB seeking registration under section 12AB and consequential approval under section 80G.

During the course of proceedings, the learned CIT (Exemptions) issued a notice calling upon the assessee to furnish various details and documents. In response thereto, the assessee furnished a detailed reply along with voluminous documentary evidences including the existing registration,

However, on examination of the application, the learned CIT (Exemptions) noticed that the assessee had filed the application under section 12A(1)(ac)(v) instead of section 12A(1)(ac)(ii). Proceeding solely on this premise, he held that the application had been filed under a wrong clause of the Act and, therefore, was not maintainable. Without examining either the charitable objects of the assessee, the genuineness of its activities, or the effect of the amendments carried out in the Memorandum of Association, he rejected the application merely on the ground that the application had been filed under an incorrect statutory clause. Consequentially, the application seeking approval under section 80G was also rejected only because the application under section 12AB had been rejected.

We have heard the rival submissions and have carefully perused the material available on record. The only issue requiring adjudication before us is whether an application

In our considered opinion, the approach adopted by the learned CIT (Exemptions) cannot be sustained either on facts or in law. From the impugned order itself, it is evident that the assessee had already been granted registration under section 12AB and that detailed replies together with all supporting documents were furnished in response to the notice issued by the learned CIT (Exemptions). The impugned order nowhere records any adverse finding regarding the charitable objects of the assessee, the genuineness of its activities, the authenticity of the documents furnished, or the amendments carried out in the Memorandum of Association. Equally, there is no finding that the assessee had ceased to pursue charitable purposes or had violated any condition governing its registration. The rejection has thus been founded exclusively on the technical objection that the application referred to an incorrect clause of section 12A(1)(ac).

Such a hyper-technical approach defeats the very purpose of the statutory scheme governing registration of charitable institutions. Once the assessee had disclosed the true nature

It is pertinent to note that the learned CIT (Exemptions) neither required the assessee to rectify the alleged procedural defect nor examined the application from the standpoint of the amended Memorandum of Association, which, according to the assessee, necessitated filing of the present application. Once the authority was in possession of the complete factual record and all relevant documents, the application ought to have been examined in its proper statutory perspective instead of being rejected on a purely technical ground. Such rejection, in our view, is contrary to the settled principle that

Accordingly, we set aside the impugned order passed under section 12AB and restore the matter to the file of the learned CIT (Exemptions) with a direction to examine the assessee’s application on its own merits, after considering the amended Memorandum of Association, the charitable objects, the genuineness of the activities and all the documents already placed on record, without rejecting the application merely on the ground that it was filed under an incorrect clause of section 12A(1)(ac). If any further clarification is considered necessary, reasonable opportunity shall be afforded to the assessee before passing a fresh order in accordance with law.

Since the rejection of the application under section 80G is purely consequential to the rejection of the application under section 12AB and no independent adverse finding has been recorded in respect thereof, the impugned order passed under section 80G is also set aside. The learned CIT (Exemptions) shall reconsider the assessee’s application for approval under section 80G afresh in accordance with law after deciding the application under section 12AB.

The learned CIT (Exemptions) is directed to dispose of both the applications by passing a speaking order, after

In the result, both the appeals filed by the assessee are allowed for statistical purposes.