INDIA CARES,MUMBAI vs. ITO EXEMPTION WARD 1(3), MUMBAI

This appeal is directed against the order dated 28.02.2026 passed by the Ld. Commissioner of Income Tax (Exemptions), Mumbai [hereinafter referred as "Ld. CIT(E)"] rejecting the assessee's application for renewal of registration under section 12AB of the Income-tax Act, 1961.

The assessee has raised grounds challenging the rejection of its application for renewal of registration under section 12AB on the ground that no charitable activities had been carried out and also alleging violation of principles of natural justice.

The brief facts are that the assessee had filed an application in Form No.10AB seeking renewal of registration under section 12AB. During the course of proceedings, the Ld. CIT(E) examined the Income & Expenditure Accounts for Assessment Years 2022-23 to 2025-26 and observed that the assessee had not incurred any expenditure towards its charitable objects during the said period. On that basis, he concluded that the assessee had failed to establish the genuineness of its activities and accordingly rejected the application for renewal of registration.

The Ld. Authorised Representative submitted that the rejection is contrary to the decision of the Hon'ble Supreme Court in Ananda Social and Educational Trust v. CIT (426 ITR 340), wherein it has been held that commencement of charitable activities is not a sine qua non for grant of registration. He further submitted that, without prejudice to the above legal contention, subsequent to the passing of the impugned order the assessee has now commenced charitable activities, received donations and applied the funds towards its charitable objects. It was submitted that the assessee is now in possession of documentary evidence to establish the activities undertaken and, therefore, the matter may be restored to the file of the Ld. CIT(E) for verification of these subsequent developments.

The Ld. Departmental Representative, on the other hand, supported the impugned order. He submitted that the trust has been in existence for several years but had admittedly not carried out any charitable activities during the relevant period. According to him, the Ld.

We have considered the rival submissions and perused the material available on record. We find that the impugned order has been passed solely on the premise that the assessee had not undertaken any charitable activity during the relevant assessment years and, therefore, the genuineness of its activities could not be established. Before us, however, the assessee has made a categorical statement that subsequent to the passing of the impugned order it has commenced charitable activities, received donations and applied the funds towards its charitable objects and is in a position to substantiate the same with documentary evidence.

The submission regarding commencement of activities and availability of supporting evidence relates to subsequent developments which admittedly were not before the Ld. CIT(E) We are of the considered view that these subsequent facts require proper examination by the competent authority before an informed decision can be taken regarding renewal of registration under section 12AB. Though the Ld. Departmental Representative sought to distinguish the decision of the Hon'ble Supreme Court in Ananda Social and Educational Trust on facts, we do not consider it necessary to adjudicate that controversy in the peculiar facts of the present case. Since the assessee itself seeks an opportunity to demonstrate that it has now actually carried out charitable activities, the

We accordingly set aside the impugned order and restore the matter to the file of the Ld. CIT(E). The assessee shall place on record all documentary evidence in support of the charitable activities now claimed to have been undertaken, including the details of donations received, application of funds and other supporting records. The Ld. CIT(E) shall examine the same in accordance with law and thereafter pass a speaking order after affording reasonable opportunity of being heard to the assessee. We make it clear that we have expressed no opinion on the merits of the claim and all issues are left open for adjudication.

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