THE H. N. AND H. H. DADY PUBLIC CHARITABLE TRUST,MUMBAI vs. THE COMMISSIONER OF INCOME-TAX (EXEMPTIONS) -MUMBAI, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH MUMBAI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER ITA No. 3870/Mum/2026 (Assessment Year: 2026-27) The H. N. and H. H. CIT(Exemptions) Dady Public Charitable Room no. 601, 6th Trust Vs. Floor, MTNL Building, Rampart House, 3rd Floor, Pedder Road, Cumballa Rampart Premises Co-Op. Hill, Dr. Gopalrao Housing Society Ltd. Deshmukh Marg, Rampart Road, Mumbai – Mumbai - 400026 400 001 PAN/GIR No. AABTH5133J (Applicant) (Respondent) Assessee by Shri Ketan Ved, Ld. AR Revenue by Shri Yogesh Kamat, Ld. DR Date of Hearing 25.06.2026 Date of Pronouncement 03.07.2026 आदेश / ORDER PER MAKARAND VASANT MAHADEOKAR, AM: This appeal has been preferred by the assessee against the order dated 22.02.2026 passed by the learned Commissioner of Income-tax (Exemptions), Mumbai [hereinafter referred to as “the CIT(E)”], in Form No. 10AD, whereby the application filed by the assessee in Form No. 10AB under clause (iii) of the first proviso to section 80G(5) of the Income-tax Act, 1961[ hereinafter referred to

2 ITA No. 3870/Mum/2026 The H. N. and H. H. Dady Public Charitable Trust as “the Act”], seeking regular approval under section 80G(5) of the Act, was rejected on the ground that the application had been filed beyond the prescribed time limit.

1 : 0 Re: Validity of the Order refusing to grant approval u/s. 80G of the Income-Tax Act, 1961 : 1 : 1 The Commissioner of Income-tax (Exemptions) has erred in passing an Order refusing to grant approval u/s. 80G of the Income-tax Act, 1961. 1 : 2 The Commissioner of Income-tax (Exemptions) has erred in holding that the Appellant had not followed the procedural requirements necessary for regularizing of provisional approval u/s. 80G(5) of the Income-tax Act, 1961 within six months from granting of provisional approval. 1 : 3 The Commissioner of Income-tax (Exemptions) has erred in not considering the facts of the case and documents produced before it. 1 : 4 The Appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject the Order of the Commissioner of Income-tax (Exemptions) rejecting the Appellant’s application is misconceived, erroneous and bad in law. 1 : 5 The Appellant submits that the impugned Order refusing to grant approval u/s. 80G passed by the Commissioner of Income-tax (Exemptions) be struck down. 2 : 0 Re.: General: 2 : 1 The Appellant craves leave to add, alter, amend, substitute and/or modify in any manner whatsoever all or any of the foregoing grounds of appeal at or before the hearing of the appeal. Facts of the Case

3 ITA No. 3870/Mum/2026 The H. N. and H. H. Dady Public Charitable Trust 3. The assessee is a charitable trust. The assessee filed an application in Form No. 10AB on 22.07.2025 under clause (iii) of the first proviso to section 80G(5) of the Act, seeking regularisation of the provisional approval granted under section 80G of the Act. 4. On verification of the application, the learned CIT(E) observed that the application was incomplete and that all the documents required to accompany the application had not been furnished. A notice dated 15.01.2026 was, therefore, issued to the assessee requiring it to furnish the complete set of documents prescribed under Rule 11AA(2) of the Income-tax Rules, 1962.In response to the aforesaid notice, the assessee furnished the relevant details and documents on 29.01.2026, vide letter dated 20.01.2026. Upon examination of the material furnished, the learned CIT(E) noticed that the assessee had been granted provisional approval under section 80G in Form No. 10AC vide order dated 19.01.2023, which was valid from 19.01.2023 up to the assessment year 2025-26. 5. The learned CIT(E), referring to clause (iii) of the first proviso to section 80G(5), observed that an institution which had been provisionally approved was required to apply for regular approval at least six months prior to the expiry of the provisional approval or within six months of commencement of its activities, whichever was earlier. The learned CIT(E) was of the view that the assessee ought to have filed the application for regularisation of the provisional approval by the end of July 2023. Since the assessee

4 ITA No. 3870/Mum/2026 The H. N. and H. H. Dady Public Charitable Trust had filed Form No. 10AB only on 22.07.2025, the learned CIT(E) held that the application had been filed after a delay of more than 23 months and was beyond the permissible time limit. 6. The learned CIT(E), accordingly, issued a further show- cause notice dated 06.02.2026, calling upon the assessee to explain why its application in Form No. 10AB should not be rejected on account of delayed filing. The assessee furnished its response vide letter dated 09.02.2026 through the ITBA e-filing portal. 7. In the said response, the assessee stated that the trust had commenced its activities in the assessment year 2017-18, much prior to the grant of provisional approval dated 19.01.2023. The assessee contended that, since it was already carrying on charitable activities before the grant of provisional approval, the expression “within six months of commencement of its activities” could not be applied by reckoning the period from the date of provisional approval. 8. The learned CIT(E), however, treated the said contention as self-contradictory. According to the learned CIT(E), since the assessee had itself admitted that its activities had commenced in the assessment year 2017-18, it was required to file Form No. 10AB within six months from the grant of provisional approval dated 19.01.2023, namely, by July 2023.The learned CIT(E) further held that the assessee had failed to demonstrate reasonable cause for the delay or establish any genuine hardship

5 ITA No. 3870/Mum/2026 The H. N. and H. H. Dady Public Charitable Trust which prevented it from filing the application within the prescribed time. The learned CIT(E) also referred to CBDT Circular No. 07/2024 dated 25.04.2024 and observed that the assessee had failed to avail itself of the relaxation granted thereunder within the stipulated period. 9. The learned CIT(E), therefore, held that the application for regularisation of the provisional approval was not allowable on the ground of delayed filing of Form No. 10AB and, vide order dated 22.02.2026 passed in Form No. 10AD, rejected the assessee’s application for approval under section 80G of the Act. 10. Before us, the learned Authorised Representative (AR) reiterated the factual and legal submissions which had been advanced before the learned CIT(E). The learned Authorised Representative submitted that the assessee was granted registration under section 12AA(1)(b)(i) of the Act vide certificate dated 07.12.2016. Subsequently, provisional registration under section 12A(1)(ac)(i) was granted vide order dated 31.05.2021, which was regularised and renewed under section 12AB(1)(b) vide order dated 04.02.2026. The registration under section 12AB was stated to be valid up to 31.03.2036.It was further submitted that the assessee had initially applied for approval under section 80G of the Act, which was rejected vide order dated 19.09.2019. The said order was challenged before the Tribunal. The Tribunal, vide order dated 05.07.2021 in ITA No. 6712/Mum/2019, restored the matter to the file of the learned CIT(E) for fresh adjudication. Pursuant to the said order of the Tribunal, the assessee was

6 ITA No. 3870/Mum/2026 The H. N. and H. H. Dady Public Charitable Trust granted approval under section 80G(5) vide order dated 19.03.2022. Thereafter, the assessee was also granted provisional approval under section 80G(5) vide order dated 19.01.2023. 11. The learned AR submitted that the assessee had commenced its charitable activities in the assessment year 2017- 18 and had been regularly filing its returns of income from that year onwards. Copies of the acknowledgements of returns of income and the audited accounts were stated to have been furnished before the learned CIT(E). 12. The learned AR contended that the learned CIT(E) had proceeded on an erroneous premise that the assessee had commenced its activities only after the grant of provisional approval dated 19.01.2023. It was submitted that the expression “within six months of commencement of its activities” appearing in clause (iii) of the first proviso to section 80G(5) applies in the case of a newly formed trust or institution and ought not to be mechanically applied to an existing trust which had commenced its activities several years before the grant of provisional approval. 13. The learned AR placed reliance upon the decision of the co- ordinate Bench in the case of Trimurti Educational Charitable Trust v. ITO, Exemption Ward, ITA No. 6533/Mum/2025, order dated 27.01.2026. It was submitted that the co-ordinate Bench had set aside the rejection of an application in Form No. 10AB where the application had been rejected solely on account

7 ITA No. 3870/Mum/2026 The H. N. and H. H. Dady Public Charitable Trust of delay, without examining the eligibility of the trust and genuineness of its charitable activities on merits. 14. The learned AR submitted that there was no adverse finding in the present case regarding the charitable objects of the assessee, the genuineness of its activities, or its compliance with the substantive conditions of section 80G(5). He, therefore, prayed that the impugned order be set aside and the matter be restored to the file of the learned CIT(E) for consideration of the application on merits. 15. The learned Departmental Representative relied upon the findings recorded in the impugned order passed by the learned CIT(E). He, however, did not raise any objection to the matter being restored to the file of the learned CIT(E) for fresh adjudication in accordance with law. 16. We have heard the rival submissions and perused the material available on record. It is not in dispute that the assessee was granted provisional approval under section 80G(5) in Form No. 10AC vide order dated 19.01.2023 and that the assessee filed Form No. 10AB on 22.07.2025. It is also not in dispute that the learned CIT(E) rejected the application solely on the ground that Form No. 10AB had not been filed within the prescribed time limit. 17. We find that the assessee had specifically placed before the learned CIT(E) its factual explanation that it was an existing charitable trust which had commenced its activities in the

8 ITA No. 3870/Mum/2026 The H. N. and H. H. Dady Public Charitable Trust assessment year 2017-18, much prior to the grant of provisional approval dated 19.01.2023. The assessee had also relied upon judicial precedents in support of its contention that the time limit linked with commencement of activities was intended to operate in the case of newly constituted trusts or institutions.

“16. We also deem it appropriate to take note of the spirit and underlying intent of the Circulars issued by the Central Board of Direct Taxes extending the due dates for filing applications in Form No.10A and Form No.10AB under the new charitable registration and approval regime. The Board, by issuing successive extensions, has itself acknowledged that the transition to the new regime involving multiple forms, staggered timelines, and overlapping validity periods has resulted in widespread practical difficulty and genuine hardship to charitable institutions across the country. 17. Though it is true that such circulars do not confer an unfettered power of condonation beyond the dates specified therein, they clearly reflect an administrative recognition of bona fide lapses and interpretational confusion faced by charitable trusts while complying

9 ITA No. 3870/Mum/2026 The H. N. and H. H. Dady Public Charitable Trust with the newly introduced framework. In the present case, the assessee’s explanation for delay is wholly consistent with the very circumstances which necessitated issuance of the said circulars, namely, confusion arising from multiple approvals carrying different terminal years of validity under the transition regime. 18. Viewed in this backdrop, a rigid and mechanical rejection of the assessee’s application solely on the ground of limitation, without examination on merits, would run contrary to the beneficial object sought to be achieved by the statutory scheme read in the light of the Board’s own understanding of ground realities. This aspect further supports the view that the impugned order cannot be sustained. 19. In our considered view, rejection of the assessee’s application under the new regime, without addressing the status of the existing approval which is operative till withdrawal, further reinforces the conclusion that the impugned order has been passed in a mechanical manner, focusing solely on procedural limitation, and without appreciating the complete factual and legal position governing the assessee’s entitlement under section 80G(5). 20. This aspect, when viewed cumulatively with the bona fide explanation offered by the assessee and the absence of any adverse finding on merits, fortifies our conclusion that the impugned order cannot be sustained. 21. Accordingly, in view of the totality of facts and circumstances of the case, and for the reasons discussed hereinabove, we set aside the impugned order passed by the learned CIT(E) and restore the matter to his file with the following directions: i. The learned CIT(E) shall condone the delay in filing the assessee’s application in Form No.10AB, the same having been satisfactorily explained as bona fide, unintentional, and arising out of genuine confusion under the transition regime, and not attributable to any deliberate or contumacious conduct on the part of the assessee; and ii. The learned CIT(E) shall thereafter examine the assessee’s application for approval under section 80G(5) on merits, strictly in accordance with law, and shall grant approval if the assessee is otherwise found to be eligible, after verifying compliance with the statutory conditions prescribed under the Act and the genuineness of its

10 ITA No. 3870/Mum/2026 The H. N. and H. H. Dady Public Charitable Trust charitable activities, after affording due and reasonable opportunity of being heard to the assessee.” 20. We find that the principle enunciated by the co-ordinate Bench in the aforesaid decision is applicable to the present case. The assessee has furnished an explanation that it was an existing charitable trust carrying on activities since the assessment year 2017-18 and that it had acted under a bona fide understanding regarding the applicability of the time limit under clause (iii) of the first proviso to section 80G(5). There is no finding in the impugned order that the explanation was mala fide or that the delayed filing was attributable to any deliberate or contumacious conduct. 21. Further, the application has not been examined on merits. There is no adjudication in the impugned order regarding the nature of the assessee’s objects, the genuineness of its charitable activities, or its compliance with the substantive conditions prescribed under section 80G(5) of the Act. The rejection is confined solely to the procedural ground of delayed filing. 22. Respectfully following the decision of the co-ordinate Bench in the case of Trimurti Educational Charitable Trust v. ITO, Exemption Ward, and having regard to the fact that the learned Departmental Representative has also not objected to restoration of the matter, we deem it appropriate to set aside the impugned order dated 22.02.2026 passed by the learned CIT(E) and restore the matter to his file for fresh adjudication.

11 ITA No. 3870/Mum/2026 The H. N. and H. H. Dady Public Charitable Trust 23. The learned CIT(E) is directed to condone the delay in filing Form No. 10AB and thereafter examine the assessee’s application for approval under section 80G(5) on merits, strictly in accordance with law. The learned CIT(E) shall verify the assessee’s compliance with the statutory conditions prescribed under the Act and the genuineness of its charitable activities and shall pass a reasoned and speaking order after affording due and reasonable opportunity of being heard to the assessee. We clarify that we have not expressed any opinion on the merits of the assessee’s eligibility for approval under section 80G(5).

Order pronounced in the open court on 03.07.2026.

Sd/- Sd/- (SAKTIJIT DEY) (MAKARAND VASANT MAHADEOKAR) VICE PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated 03/07/2026 Dhananjay, Sr.PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. संबंधधत आयकर आयुक्त / The CIT(A) आयकर आयुक्त(अपील) / Concerned CIT 4. धिभागीय प्रधतधनधध, आयकर अपीलीय अधधकरण, मुम्बई / DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. 6. आदेशानुसार/ BY ORDER, सत्याधपत प्रधत //True Copy// 1. उि/सहायक िंजीकार ( Asst. Registrar) आयकर अिीिीय अतिकरण, मुम्बई / ITAT, Mumbai