MOHAMMEDIYA EDUCATIONAL TRUST ,BIDAR vs. INCOME TAX OFFICER, WARD-1(EXEMPTIONS), GULBARGA

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ITA 2470/BANG/2025Status: DisposedITAT Bangalore30 April 202611 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that there is no bar under the Income Tax Act on an assessee filing a fresh application in Form 10AB for approval under Section 80G of the Act before the same authority, even if a previous application was rejected, provided the assessee satisfies all the conditions for granting approval. The Tribunal found the CIT(E)'s reasoning for treating the fresh application as non-est and void-ab-initio to be unjustified and bad in law. The Tribunal also noted that the CIT(E)'s earlier rejection order dated 30.09.2024 was based on a misinterpretation of Section 80G, as it considered the provisions from the perspective of a donor claiming deduction rather than an institution seeking approval. While acknowledging that the assessee did not respond to a show-cause notice, the Tribunal, in the interest of justice, equity, and fair play, remitted the issue back to the CIT(E). The CIT(E) is directed to consider the application filed on 27.03.2025 and decide in accordance with the law, granting a reasonable opportunity of being heard to the assessee. The Tribunal clarified that the approval, if granted, would be effective from the date of the fresh application, not the original one.

What were the facts?

The assessee, Mohammediya Educational Trust, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Bangalore, challenging an order dated 03.09.2025 passed by the Commissioner of Income Tax (Exemptions), Bengaluru (CIT(E)). The CIT(E) rejected the trust's application for approval under Section 80G of the Income Tax Act, 1961, filed in Form 10AB on 27.03.2025. The trust had previously applied for 80G approval on 30.03.2024, which was rejected by the CIT(E) on 30.09.2024. The trust did not appeal the earlier rejection. The CIT(E) rejected the fresh application, deeming it non-est and void-ab-initio, as an earlier identical application for the same purpose had been rejected and had attained finality. The trust argued that the fresh application was an independent statutory right under a newly notified procedure.

What were the issues?

1. Whether the learned CIT(E) erred in rejecting the Appellant’s application in Form No. 10AB dated 27.03.2025 for grant of approval under section 80G(5)(iii) of the Income-tax Act, 1961, on the ground that a previous identical application was rejected and not appealed, treating the fresh application as non-est and void-ab-initio. Assessee's Contention: The assessee argued that the fresh application was filed under a newly notified procedure in Form 10AB, which is an independent statutory right and could not be treated as collateral to earlier proceedings. They contended that there is no bar to filing a fresh application if all conditions are met. Revenue's Contention: The revenue, through the CIT(E)'s order, contended that the fresh application was a collateral attack on a concluded decision and undermined the appellate framework, as the earlier rejection order had attained finality due to no appeal being filed. 2. Whether the learned CIT(E) erred in rejecting the application without providing an adequate and effective opportunity of being heard and without proper appreciation of facts and law. Assessee's Contention: The assessee submitted that no proper notice or hearing opportunity was effectively granted, and the order was passed in undue haste without considering the factual circumstances and documents. They also argued that the CIT(E) failed to exercise discretion judiciously and conduct proper inquiry. Revenue's Contention: The judgment notes that the CIT(E) observed that the assessee did not respond and failed to appear and submit necessary details/documents as called for, despite being granted an opportunity of being heard. However, it also notes a contradiction where the CIT(E) stated they heard the assessee on 18.08.2025 and perused submissions.

Which sections of the Income-tax Act were involved?

Section 80G,Section 80G(5),Section 80G(5)(iii),Section 80G(1),Section 80G(2),Section 253,Section 12AA,Section 12AB,Section 2(15)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B”;BENCH: BANGALORE

Before: SHRI WASEEM AHMED

For Appellant: Smt. Pratibha R., Advocate A.R
Hearing: 24.02.2026Pronounced: 30.04.2026

PER KESHAV DUBEY, JUDICIAL MEMBER:

This appeal at the instance of the assessee is directed against the order of ld. CIT (Exemptions), Bengaluru dated 3.9.2025 vide DIN & Notice No. ITBA/EXM/F/EXM45/2025-26/1080312385(1) rejecting the application for approval u/s. 80G of the Income Tax Act,1961 (in short” the Act”) filed in form 10AB dated 27/03/2025.

2.

The assessee has raised the following grounds of appeal:-

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ITA No.2470/Bang/2025 Mohammediya Educational Trust, Bidar Page 3 of 11

3.

Brief facts of the case as narrated by the ld. AR of the assessee are that the assessee in the present case is a Trust constituted by the deed of Trust dated 22/05/2006 along with first Supplementary Deed dated 20/08/2019 and second Supplementary Trust Deed dated 24/07/2020 and registered before the ld. Sub-Registrar, Basavakalyana. The assessee Trust was originally granted Registration u/s 12AA of the Act by the ld. CIT (Exemptions), Bangalore on 13/08/2020 vide Registration No. CIT

ITA No.2470/Bang/2025 Mohammediya Educational Trust, Bidar Page 4 of 11 (EXEMPTIONS) BANGALORE /12AA /2020-21/A/10238 & DIN & Order No. ITBA/EXM/S/12AA/2020-21/1027707438(1). Subsequently, the ld. CIT (Exemptions), Bangalore also granted registration u/s 12AB(1)(b) of the Act on 30/09/2024 vide Unique Registration No. (URN): AAFTM8420P24BL01 effective from AY 2023-24 to AY 2027-28.

3.1 Further, the assessee trust was also granted provisional approval by the ld. PCIT/CIT on 07/04/2022 under clause (iv) of first proviso to sub-section (5) of section 80G of the Act vide Unique Registration Number (URN): AAFTM8420PF20221 effective from 07/04/2022 to AY 2024-25. Thereafter, the assessee trust applied for final approval u/s. 80G of the Act on 30/03/2024 in Form No. 10AB. The ld. CIT(E), Bengaluru vide order dated 30/09/2024 had rejected the application in Form No.10AB dated 30/03/2024 filed for approval u/s. 80G of the Act by referring the provisions of section 80G(1) as well as section 80G(2) of the Act and observing that the receipts in the form of “fees collection” and “RTE fees” do not fall under the definition of donations and therefore provisions of section 80G of the Act are not found applicable in the case of the assessee.

3.2 The assessee trust after a gap of almost one year again filed a fresh application in Form No.10AB on 27/03/2025 for granting the approval u/s. 80G of the Act. The assessee was granted opportunity of being heard by the ld. CIT(E), Bengaluru. In the opinion of the ld. CIT(E), the assessee was mandated to submit necessary documents to prove the genuineness of the activities of the trust or institution and fulfillment of all the conditions laid down in clauses (i) to (v) of section 80G of the Act. In the present case, the assessee did not respond and failed to appear before the ld.CIT(E) and submit the necessary details/ documents as called for. On the other hand, the

ITA No.2470/Bang/2025 Mohammediya Educational Trust, Bidar Page 5 of 11 ld.CIT(E) also observed that on perusal of submissions and also heard on 18/08/2025, the assessee had earlier applied for regularization of the provisional approval u/s. 80G of the Act and the application was rejected vide order dated 30/09/2024. The rejection order has attended finality as no appeal was filed before the Hon’ble ITAT within limitation u/s. 253 of the Act. The proper course was to challenge that order in appeal. Further, ld. CIT(E) is also of the opinion that filing a fresh, identical application before the same authority and for the same purpose, amounts to collateral attack on a concluded decision and undermines the appellate framework recognized by law. As the assessee trust was also show caused for the rejection on the above basis with note sheet entry dated 18/08/2025 and no response had been submitted by assessee, accordingly, the application was held to be not maintainable as non-est and is thus void-ab-initio. In view of the application in Form No.10AB dated 27/03/2025 filed for approval u/s. 80G of the Act was cancelled by the ld. CIT(E).

4.

Aggrieved by the order of ld. CIT(E), Bengaluru dated 03/09/2025, the assessee has filed the present appeal before this Tribunal. The assessee has also filed a paper book comprising of 262 pages containing therein the copy of the trust deed along with the supliment deeds, list of governing body, bank account details, copy of Form No. 10AC, rent agreement copy, copy of audit reports, supporting documents showing the activities of educational trust, copy of Form No.10AB, copy of audited financials as well as income tax returns along with the case law relied upon by the assessee.

5.

Before us, the ld. A.R. of the assessee vehemently submitted that the ld. CIT(E), Bengaluru rejected the Form No. 10AB dated 27/03/2025 filed for approval u/s. 80G of the Act solely on the ground that filing a fresh, identical application before the same

ITA No.2470/Bang/2025 Mohammediya Educational Trust, Bidar Page 6 of 11 authority and for the same purpose amounts to collateral attack on a concluded decision and thus held that the application filed in Form No.10AB on 27/03/2025 is not maintainable as non-est and is thus void-ab-initio. Further, the ld. A.R. of the assessee vehemently submitted that the ld. CIT(E) erred in rejecting the application without providing adequate and effective opportunity of being heard which is a gross violation of principles of natural justice. Lastly, the ld. A.R. submitted that the assessee trust has complied with all the conditions as laid down under clauses (i) to (v) of section 80G of the Act and the genuineness of the activities of the trust had already been examined by the ld. CIT(E), Bengaluru at the time of granting registration u/s. 12AB of the Act and accordingly prayed that one more opportunity may be granted before the ld. CIT(E), Bengaluru to substantiate its claim with a direction to consider the Form No.10AB filed on 27/03/2025 for approval u/s. 80G of the Act.

6.

The ld. D.R. on the other hand vehemently supported the order of ld. CIT(E), Bengaluru and submitted that as the assessee did not prefer the appeal against the rejection order dated 30/09/2024 passed by the ld. CIT(E), Bengaluru and the same attained the finality, the ld. CIT(E), Bengaluru has rightly treated the second application filed on 27/03/2025 as not maintainable and void-ab-initio. Further, the ld. D.R. submitted that during the course of proceedings before the ld. CIT(E), the assessee also did not respond and failed to appear before the ld. CIT(E), Bengaluru and submit the necessary details/ documents as called for and accordingly, the ld. CIT(E), Bengaluru had no option but to reject the application filed for approval u/s. 80G of the Act.

7.

We have heard the rival submissions and perused the material available on record. It is an undisputed fact that the

ITA No.2470/Bang/2025 Mohammediya Educational Trust, Bidar Page 7 of 11 assessee trust is registered u/s. 12AB(1)(b) of the Act on 30/09/2024 vide Unique Registration No. (URN): AAFTM8420P24BL01 effective from AY 2023-24 to AY 2027-28. Thus, there is no dispute with regard to registration of the trust u/s. 12AB of the Act. Further, the assessee trust had also been granted provisional approval by the ld. PCIT/CIT on 07/04/2022 under clause (iv) of first proviso to sub-section (5) of section 80G of the Act vide Unique Registration Number (URN): AAFTM8420PF20221 effective from 07/04/2022 to AY 2024-25. Thereafter, the assessee trust applied for final approval u/s. 80G of the Act on 30/03/2024 in Form No. 10AB. The ld. CIT(E), Bengaluru vide order dated 30/09/2024 had rejected the application in Form No.10AB dated 30/03/2024 filed for approval u/s. 80G of the Act by referring provisions of section 80G(1) as well as section 80G(2) of the Act and hold that the receipts in the form of “fees collection” and “RTE fees” do not fall under the definition of donations and therefore the provisions of section 80G of the Act are not found applicable in the present case. Further, we also observed that the ld. CIT(E), Bengaluru vide order dated 27/03/2025 had rejected the application filed in Form No.10AB for approval u/s. 80G of the Act by observing that the assessee had earlier filed an application for regularization of provisional approval u/s. 80G of the Act and the application was rejected vide order dated 30/09/2024 and accordingly was of the view that the rejection order has attend finality as no appeal was filed before the ITAT within the limitation u/s. 253 of the Act. Therefore, the ld. CIT(E), Bengaluru hold that filing a fresh, identical application before the same authority and for the same purpose amounts to collateral attack on a concluded decision.

7.1 We are of the considered opinion that on receipt of an application for approval u/s. 80G of the Act, the ld. CIT(E) shall call

ITA No.2470/Bang/2025 Mohammediya Educational Trust, Bidar Page 8 of 11 for such documents or information or make such inquiries as he/she thinks necessary in order to satisfy himself/ herself about- (A) the genuineness of activities of such institution or fund; and (B) the fulfillment of all the conditions laid down in clauses (i) to (v). After satisfying himself/ herself about the genuineness of the activities and fulfillment of all the conditions laid down in clauses (i) to (v), the ld. CIT(E) shall pass an order in writing granting approval for a period of 5 years or if he/ she is not so satisfied, pass an order in writing rejecting such application and also cancelling the approval after affording reasonable opportunity of being heard. Thus, we are of the considered opinion that there is no such bar/restriction under the Act on the assessee trust in filing the application in form 10AB for granting approval u/s. 80G of the Act before the same Authority subsequently if the assessee trust satisfy all the conditions for granting approval u/s. 80G of the Act. The ld. CIT(E) on receipt of the application on each occasion has to satisfy himself/herself only about the genuineness of the activities of the trust and fulfillment of all the conditions laid down in clauses (i) to (v) of Section 80G(5) of the Act. Merely because, the assessee trust had not preferred an appeal against the earlier order dated 30/09/2024 passed by ld.CIT(E), the assessee trust can not be barred from exercising its statutory right subsequently before the same Authority if it fulfills the conditions as laid down for approval u/s. 80G of the Act. The only consequence of subsequent filing of application before the ld.CIT(E) will be the effective date of granting the approval which will ultimately be the date of the application. Thus, while entertaining the application in Form 10AB filed on 27/03/2025, the ld. CIT(E) cannot grant the approval effective from the date of original application i.e. 30/03/2024. Therefore, in our considered opinion treating the application filed in Form No.10AB

ITA No.2470/Bang/2025 Mohammediya Educational Trust, Bidar Page 9 of 11 on 27/03/2025 to be not maintainable as non-est and void-ab- initio is highly unjustified and bad in law as there are no such provisions under the Act that once the application for approval is rejected then the assessee can never apply for approval before the same Authority for ever.

7.2 Further, on going through the order of ld.CIT(E), Bengaluru dated 30/09/2024, we noticed that the ld.CIT(E), Bengaluru had rejected the application on the sole ground that the receipts in the form of “fess collection” and “RTE fees” do not fall under the definitions of donations as defined in section 80G(2) of the Act and therefore, held that provisions of section 80G of the Act are not found applicable in the present case. Although the assessee trust had not preferred any appeal against the said Order, however we are of the considered opinion that the ld.CIT(E) without application of mind and more particularly without properly understanding the fact of the case had completely misdirected herself in holding that provisions of section 80G of the Act are applicable in the cases of receipts in the form of donations to certain funds as defined in section 80G(2) of the Act by reproducing some portion of sub- section(1) and sub-section(2) of section 80G of the Act. In our considered opinion the ld.CIT(E), Bengaluru had decided the issue from the perspective of donor who claims the deduction u/s. 80G of the Act (Chapter- VIA) from gross total income after paying donations and not from the perspective of the institutions/ trust being the donee, who is seeking approval u/s. 80G of the Act. Further, section 80G(1) of the Act affirm that in computing the total income of the assessee there should be deducted, in accordance with and subject to the provisions of this section. Sub- section (2) of 80G of the Act specify the sum referred to in sub- section(1), and therefore we are of the considered opinion that while considering the application of the assessee trust for granting of

ITA No.2470/Bang/2025 Mohammediya Educational Trust, Bidar Page 10 of 11 approval u/s. 80G(5) of the Act, the ld.CIT(E) on a wrong stand point had relied upon and reproduced the provisions of section 80G(1) of the Act and 80G(2) of the Act, which in our view is from the perspective of donor claiming deduction u/s. 80G of the Act. However, the assessee trust had applied for approval u/s. 80G(5) of the Act and therefore the provisions of section 80G(1) as well as 80G(2) of the Act are not applicable in the case of the assessee. In our view for the purposes of granting approval u/s. 80G of the Act, the relevant provisions are 80G(5) of the Act and not section 80G(1) and section 80G(2) of the Act.

7.3 In the present case, we observed that on the one hand the ld.CIT(E), Bengaluru contended that the assessee trust has not responded and failed to appear before the ld.CIT(E) and submit the necessary details/ documents as called for, however on the other hand also stated that he also heard the assessee on 18/08/2025 & perused the submissions of the assessee which itself is contradictory. However, we also noticed that in response to show cause notice, the assessee did not response. This being so, in the interest of justice, equity and fair play and as requested by ld. A.R. of the assessee, we deem it fit and proper to remit the entire issue to the file of ld.CIT(E), Bengaluru with a direction to consider the application filed in Form No.10AB on 27/03/2025 for approval u/s. 80G of the Act and decide in accordance with law as in our opinion there is no restriction under the Act on the assessee in applying the approval subsequently if the assessee able to demonstrate before the ld.CIT(E) about the fulfillment of conditions as required for granting the approval u/s. 80G(5) of Act. Needless to say, a reasonable opportunity of being heard must be granted to the assessee. It is ordered accordingly.

ITA No.2470/Bang/2025 Mohammediya Educational Trust, Bidar Page 11 of 11

8.

In the result, the appeal filed by the assessee is partly allowed for statistical purposes.

Order pronounced in the open court on 30th Apr, 2026

Sd/- Sd/- (Waseem Ahmed) (Keshav Dubey) Accountant Member Judicial Member

Bangalore, Dated 30th Apr, 2026. VG/SPS

Copy to:

1.

The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file

By order

Asst. Registrar, ITAT, Bangalore.

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