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

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH MUMBAI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER 1. ITA No. 3702/Mum/2026 (Assessment Year: 2026-27) 2. ITA No. 3703/Mum/2026 (Assessment Year: 2026-27) Gandhar Foundation CIT(Exemptions) 18th Floor, DLH Park, S MTNL Building, 6th V. Road, Goregaon Vs. Floor, Pedder Road, West, Goregaon S.O. Cumballa Hill, Mumbai-400 104 Mumbai-400 026 PAN/GIR No. AAKCG5169M (Applicant) (Respondent) Assessee by Shri Mani Jain, Ld. AR Revenue by Shri Yogesh Kamat, Ld. DR Date of Hearing 23.06.2026 Date of Pronouncement 29.06.2026 आदेश / ORDER PER MAKARAND VASANT MAHADEOKAR, AM: These two appeals filed by the assessee are directed against two separate orders passed by the learned Commissioner of Income Tax (Exemptions), Mumbai [hereinafter referred to as "the CIT(E)"] in Form No.10AD, both dated 24.03.2026, whereby the

2 ITA No. 3702 7 3703/Mum/2026 Gandhar Foundation application filed by the assessee seeking regular registration under section 12AB of the Income-tax Act, 1961 ("the Act") came to be rejected and, consequentially, the application seeking approval under section 80G of the Act was also rejected. Since common facts are involved and the issues are interconnected, both the appeals were heard together and are disposed of by this consolidated order.

3 ITA No. 3702 7 3703/Mum/2026 Gandhar Foundation assessee to furnish the requisite details and documents. The assessee furnished its reply and supporting documents vide letter dated 06.02.2026. 5. On examination of the application, the learned CIT(E) observed that since the assessee had commenced its activities after obtaining provisional registration on 26.08.2023, the application for regular registration ought to have been filed within six months from commencement of such activities in terms of section 12A(1)(ac)(iii) of the Act. According to the learned CIT(E), the application filed on 30.09.2025 was delayed by more than eighteen months. The learned CIT(E) further observed that the assessee had failed to furnish any satisfactory explanation for the delay and also failed to avail the benefit of CBDT Circular No.07/2024 dated 25.04.2024. Placing reliance upon the decisions of the Hon'ble Supreme Court in PCIT vs. Wipro Ltd. and Commissioner of Customs vs. Dilip Kumar & Co., the learned CIT(E) held that compliance with the statutory time limit was mandatory and, accordingly, rejected the application for regular registration under section 12AB. 6. The learned Authorised Representative submitted that the assessee had filed the application within six months prior to the expiry of the period of provisional registration and, therefore, the application satisfied the requirement prescribed under section 12A(1)(ac)(iii) of the Act. It was, therefore, contended that the learned CIT(E) was not justified in rejecting the application as

4 ITA No. 3702 7 3703/Mum/2026 Gandhar Foundation being barred by limitation. He accordingly prayed that the impugned order be set aside. 7. The learned Departmental Representative relied upon the impugned order. 8. We have heard the rival submissions and perused the material available on record. The learned CIT(E) has rejected the assessee's application solely on the ground that the same was not filed within the period contemplated under section 12A(1)(ac)(iii) of the Act. According to the learned CIT(E), since the assessee had commenced its activities after obtaining provisional registration on 26.08.2023, the application ought to have been filed within six months from the commencement of such activities and, therefore, the application filed on 30.09.2025 was beyond the prescribed period. 9. At the outset, we find that the expression "within six months of commencement of its activities, whichever is earlier" necessarily presupposes a finding as to the date on which the trust actually commenced its charitable activities. Unless such date is first determined on the basis of cogent material available on record, the limitation contemplated under section 12A(1)(ac)(iii) cannot be computed. In the impugned order, the learned CIT(E) has merely observed that the assessee had been carrying on its activities since obtaining provisional registration on 26.08.2023 and, therefore, concluded that the application ought to have been filed by February, 2024. However,

5 ITA No. 3702 7 3703/Mum/2026 Gandhar Foundation the impugned order neither records the actual date on which the assessee commenced its charitable activities nor refers to any material establishing such date. The conclusion that the application was delayed by more than eighteen months is, therefore, founded on an assumption rather than on the determination of the jurisdictional fact required under the statute. 10. We further find that the statutory provisions governing applications for registration underwent a material change by virtue of the substitution brought about by the Finance Act, 2023 with effect from 01.10.2023. The substituted provisions were in force on the date the impugned order dated 24.03.2026 was passed. The substituted provision materially altered the statutory framework and also inserted a proviso (w.e.f. 1-10-2024) empowering the Principal Commissioner or Commissioner to condone the delay, if any, upon being satisfied that there existed a reasonable cause for filing the application beyond the prescribed period. The learned CIT(E), however, has proceeded to adjudicate the application by applying the earlier statutory framework without examining the applicability and effect of the substituted statutory provisions, including the amended provision empowering condonation of delay, which governed the assessee's application on the date of adjudication.` 11. Having regard to the aforesaid facts and the legal position, we are of the considered opinion that the matter requires fresh examination by the learned CIT(E). We, therefore, set aside the

6 ITA No. 3702 7 3703/Mum/2026 Gandhar Foundation impugned order and restore the matter to the file of the learned CIT(E) with a direction to adjudicate the assessee's application afresh in accordance with law after determining the relevant facts, including the date of commencement of the assessee's charitable activities, examining the applicability of the statutory provisions as substituted by the Finance Act, 2023, including the proviso relating to condonation of delay, wherever applicable, and thereafter pass a reasoned order after affording the assessee an adequate opportunity of being heard. We clarify that we have not expressed any opinion on the merits of the rival contentions and all issues are kept open for fresh adjudication. 12. We shall now take up ITA No.3703/Mum/2026, directed against the order dated 24.03.2026 passed by the learned CIT(E) in Form No.10AD under section 80G(5) of the Act rejecting the assessee's application for approval under section 80G. 13. The learned CIT(E) rejected the assessee's application for approval under section 80G solely on the ground that the assessee's application for registration under section 12AB had already been rejected and, therefore, the condition prescribed under section 80G(5)(i) of the Act was not fulfilled. Thus, the rejection under section 80G is entirely consequential to the rejection of the application under section 12AB. 14. The learned Authorised Representative submitted that since the rejection of the application under section 80G is purely consequential to the rejection of the application under section

7 ITA No. 3702 7 3703/Mum/2026 Gandhar Foundation 12AB, the impugned order under section 80G also deserves to be set aside. The learned Departmental Representative relied upon the impugned order.

Order pronounced in the open court on 29.06.2026.

Sd/- Sd/- (SAKTIJIT DEY) (MAKARAND VASANT MAHADEOKAR) VICE PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated 29/06/2026 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.

8 ITA No. 3702 7 3703/Mum/2026 Gandhar Foundation गार्ड फाईल / Guard file. 6. आदेशानुसार/ BY ORDER, सत्याधपत प्रधत //True Copy// 1. उि/सहायक िंजीकार ( Asst. Registrar) आयकर अिीिीय अतिकरण, मुम्बई / ITAT, Mumbai