MUKHLASI WELFARE ASSOCIATION,MUMBAI vs. CIT (EXEMPTIONS), MUMBAI

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ITA 5572/MUM/2026Status: DisposedITAT Mumbai10 July 2026AY 2027-285 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the 80G rejection was solely based on the 12AB rejection without independent examination. Considering the CBDT circular's intent to alleviate procedural hardships, the matter was restored for fresh adjudication.

What were the facts?

The assessee's application for approval under Section 80G was rejected because its application for registration under Section 12AB was previously rejected. The assessee argued that the 80G rejection was consequential and cited a CBDT circular extending deadlines due to practical difficulties.

What were the issues?

Whether the rejection of an application for 80G approval, solely based on the rejection of a 12AB registration, is justified, especially in light of CBDT circulars addressing procedural difficulties.

Which sections of the Income-tax Act were involved?

Section 80G,Section 12AB,Section 12A(1)(ac)(iii),Section 80G(5)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘D’ BENCH

Before: SHRI AMIT SHUKLA & SHRI ARUN KHODPIA

For Appellant: Ms. Kavita Kukreja (virtual appearance)
For Respondent: Shri Azhar Kabir, SR DR
Hearing: 10/07/2026Pronounced: 10/07/2026

आदेश / O R D E R PER AMIT SHUKLA (J.M): This appeal has been filed by the assessee against the impugned order dated 29.03.2026 passed by the learned Commissioner of Income Tax (Exemption), Mumbai, whereby

2 ITA No.5572/Mum/2026 Mukhlasi Welfare Association the assessee’s application seeking approval/renewal under section 80G of the Income-tax Act, 1961 was rejected.

2.

The facts, in brief, are that the assessee filed Form No.10AB on 30.09.2025 seeking approval under section 80G(5) of the Act under clause (ii) of the first proviso thereto. The learned CIT(Exemptions) observed that the assessee had also filed Form No.10AB on 27.09.2025 seeking registration under section 12AB of the Act under section 12A(1)(ac)(iii). Since the said application for registration under section 12AB was rejected vide order dated 29.03.2026, the learned CIT(Exemptions) held that the assessee did not satisfy the condition prescribed under section 80G(5)(i) of the Act. Accordingly, the application for approval under section 80G was rejected.

3.

The learned Authorised Representative submitted that the rejection of the application under section 80G is merely consequential to the rejection of registration under section 12AB. It was further submitted that the delay in filing Form No.10AB occurred on account of the transition to the new registration regime and that the Central Board of Direct Taxes, recognizing the practical difficulties faced by charitable institutions, issued CBDT Circular No. 7 of 2024 dated 25.04.2024, extending the due date for making applications in Form No.10A/10AB. It was, therefore, contended that a liberal approach ought to have been adopted while

3 ITA No.5572/Mum/2026 Mukhlasi Welfare Association considering the assessee's application and the matter deserves to be restored to the file of the learned CIT(E) for fresh adjudication.

4.

The learned Departmental Representative relied upon the findings recorded by the learned CIT(Exemptions).

5.

We have considered the rival submissions and perused the material available on record. We find that the rejection of the assessee's application for approval under section 80G is solely founded upon the rejection of its application for registration under section 12AB of the Act. There is no independent examination of the fulfilment of the other statutory conditions prescribed under section 80G(5).

6.

We further note that the CBDT, by Circular No. 7 of 2024 dated 25.04.2024, extended the due dates for filing applications under the new registration regime in recognition of the genuine hardship faced by charitable institutions in complying with the procedural requirements. The object of the Circular is to facilitate the migration of genuine charitable institutions to the new regime and to ensure that substantive benefits are not denied merely on account of procedural or technical lapses.

4 ITA No.5572/Mum/2026 Mukhlasi Welfare Association 7. In the present case, since the rejection of the application under section 80G is entirely consequential to the rejection of registration under section 12AB, and considering the beneficial intent underlying the aforesaid CBDT Circular, we are of the considered view that the matter deserves to be restored to the file of the learned CIT(Exemptions). The learned CIT(Exemptions) shall reconsider the assessee's application for approval under section 80G in the light of the outcome of the proceedings relating to registration under section 12AB and after taking into consideration the CBDT Circular and the applicable statutory provisions. Needless to state, reasonable opportunity of being heard shall be afforded to the assessee before passing a fresh speaking order in accordance with law.

8.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced on 10th July, 2026.

Sd/- Sd/- (ARUN KHODPIA) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 10/07/2026 KARUNA, sr.ps

5 ITA No.5572/Mum/2026 Mukhlasi Welfare Association Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy//

BY ORDER,

(Asstt. Registrar) ITAT, Mumbai

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