SPARSH INDIA FOUNDATION,GURGAON vs. ITO (EXEMPTION), FARIDABAD

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ITA 654/DEL/2026Status: DisposedITAT Delhi28 April 2026AY 2026-20276 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that once registration under Section 12AB is granted, the approval under Section 80G should also be granted, following the precedent set by the Chhattisgarh High Court. The delay in filing the appeal was condoned.

What were the facts?

The assessee's application for registration under Section 12AB(1)(b) was granted. However, their subsequent application for approval under Section 80G(5)(vi)(B) was rejected. The assessee faced a delay in filing the appeal due to a jurisdictional error.

What were the issues?

Whether the rejection of an application for Section 80G approval is justified when Section 12AB registration has already been granted. The issue of delay in filing the appeal was also addressed.

Which sections of the Income-tax Act were involved?

Section 12AB,Section 80G

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI

Before: SHRI YOGESH KUMAR U.S & SHRI SANJAY AWASTHI

Hearing: 23.04.2026Pronounced: 28.04.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI [ DELHI BENCH: “A” NEW DELHI] BEFORE SHRI YOGESH KUMAR U.S, JUDICIAL MEMBER AND SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER ITA No. 654/DEL/2026 Sparsh India foundation Vs Income Tax Officer (Exemption) G7A/8, DLF Phase 1, Income Tax Officer, Faridabad, Gurgaon, Haryana Haryana PAN: ABETS7224D (RESPONDENT) (APPLICANT) Appellant by Sh. S. K. Chaturvedi, CA Respondent by Sh. Jitender Singh, CIT DR

Date of Hearing 23.04.2026 Date of Pronouncement 28.04.2026

ORDER PER YOGESH KUMAR, U.S. JM: The present appeal is filed by the Appellant against the order of

Ld. Commissioner of Income Tax (Exemption) -Chandigarh (‘Ld. CIT(A)’

for short), New Delhi dated 28/10/2025.

2.

There is a delay of 21 days in filing the Appeal. The Assessee

filed an affidavit contending that due to mis-conception, the Appellant

had filed Appeal before Chandigarh Bench of the Tribunal, which has

been returned by the ITAT, Chandigarh mentioning that jurisdiction

falls with ITAT Delhi Bench. Thereafter, Assessee filed the captioned

Appeal, therefore, there is a delay of 21 days in filing the captioned

Appeal.

3.

For the reason stated in the Affidavit filed by the Assessee the

delay of 21 days in filing the present Appeal is hereby condoned.

4.

The Ld. Counsel for the Assessee submitted that the Assessee

has been granted with registration under Section 12AB(1)(b) of the Act

on 23/02/2026 by the CIT(E), however, the application filed by the

Appellant under Section 80G(5)(vi)(B) of the Act has been erroneously

rejected vide order impugned. The Ld. Counsel has also relied on the

Judgment of Hon’ble High Court of Chhattisgarh dated 28/11/2024 in

the case of Commissioner of Income Tax (Exemption) Vs. Dignity

Education Society. Thus, sought for allowing the Appeal.

5.

Per contra, the Ld. Departmental Representativevehemently

submitted that the grant of Registration under Section 12A and 80G

of the Act are entirely different and mere granting of approval under

Section 12A of the Act cannot accrue any right to automatically grant

Registration under Section 80G of the Act. Thus, sought for dismissal

of the Appeal.

6.

We have heard the parties perused the material. It is not in

dispute that the Assessee has granted with registration under Section

12AB(1)(b) of the Act by the CIT(E), Chandigarh on 23/02/2026.

However, the application filed under Section 80G(5)(iv)(B) of the Act

has been rejected subsequently on 28/10/2025. The Hon’ble High

Court of Chhattisgarh in the case of Commissioner of Income Tax

(Exemption) Vs. Dignity Education Society (supra), held as under:-

‘7. We have heard learned counsel for the parties and

considered their rival submissions made herein-above and also went

through the record with utmost circumspection.

8.

It is not in dispute that the assessee’s application under Section 12AA of the IT Act was granted and is continuing in operation and that is the basis which has persuaded the learned ITAT to accept the appeal of the assessee and direct the CIT(E) to grant approval under Section 80G of the IT Act.

9.

The issue involved herein is no longer res integra and stands decided by a decision of the Gujarat High Court in the matter of Hiralal Bhagwati v. Commissioner of Income-Tax (2000) 246 ITR 188 and that has been approved to be the correct law by a decision of the Supreme Court in the matter of Assistant Commissioner of Income Tax v. Surat City Gymkhana (2008) 14 SCC 169.

10.

In Hiralal Bhagwati (supra), application of the assessee therein for exemption under Section 80G of the IT Act was rejected and the competent authority refused to grant exemption which the assessee challenged before the Gujarat High Court and the Gujarat High Court, considering the case of the assessee therein, held that once the registration under Section 12A(a) of the IT Act is granted, the grant of benefit under Section 80G of the IT Act cannot be denied, and observed as under:-

“18. It is also required to be noted that once the registration under section 12A(a) of the Act is granted, the grant of benefit cannot be denied. The Income-tax Officer was not justified in refusing the benefits which would otherwise accrue under the registration. If there was no registration, as contemplated under section 12A(a) read with rule 17A, the Revenue would have been justified in making a submission that the benefit cannot be granted, but where the application for registration is submitted and the registration has been granted, the benefit cannot be denied on the ground that the scheme is not for the benefit of the public at large.”

11.

The principle of law laid down by the Gujarat High Court in Hiralal Bhagwati (supra) was considered by the Supreme Court in Surat City Gymkhana’s case (supra) in which two questions of law were framed, (A) whether the objects of the trust restricting benefit to the members of the club would fall within the purview of the act of ‘general public utility’ under Section 2(15) of the Income Tax Act constituting as a section of public and not a body of individuals and (B) whether registration under Section 12-A was a fait accompli to hold that assessing officer back from further probe into the objects of the trust, and it has been held by their Lordships that once application under Section 12A of the IT Act is granted, there is no need of further enquiry with regard to the parties to the lis, whether it is for charitable purposes or otherwise, and the two stated questions have been answered in paragraphs 4 and 5 of the report as under: -

“4. This Court, on 22-7-2002, granted leave in respect of Question ‘B’ only. The appeals were not entertained in respect of Question ‘A’ and it was noted that the appeals were rightly dismissed by the High Court insofar as Question ‘A’ is concerned as the appellant did not challenge the correctness of the judgment in Hiralal Bhagwati1.

5.

On a perusal of the judgment of the Gujarat High Court in Hiralal Bhagwati1 we now find that Question ‘B’ is also concluded by the said judgment (refer to the 1st paragraph of ITR p. 196). Since the Revenue did not challenge the decision in the said case, the same has attained finality. Question ‘B’, therefore, is to meet the same fate as Question ‘A’ as this Court had declined to grant leave in respect of Question ‘A’ on the ground that the Revenue did not challenge the correctness of the decision in Hiralal Bhagwati1. It appears that the fact, that Question ‘B’ was also covered by the aforementioned judgment, was not brought to the notice of Their Lordships and, therefore, leave granted was restricted to Question ‘B’.”

12.

In view of the decision rendered by the Gujarat High Court in Hiralal Bhagwati (supra) approved by the Supreme Court in Surat City Gymkhana’s case (supra), we have no hesitation to hold that since the respondent assessee stands registered as charitable institution under Section 12AA of the IT Act, the only corollary is, its application under Section 80G(5) of the IT Act also deserves to be allowed which the learned ITAT has rightly noticed to be the correct legal position and directed the CIT(E) to grant approval to the assessee under Section 80G(5) of the IT Act. As such, the

substantial question of law is answered in favour of the assessee and against the Revenue and accordingly, the tax appeal deserves to be and is hereby dismissed leaving the parties to bear their own cost(s).’

7.

Considering the fact that the Assessee has been granted with

registration under Section 12AB(1)(b) of the Act after verifying the

details the CIT(E) should have granted approval under Section

80G(5)(iv)(B) of the Act. By respectfully following the Judgment of the

Hon’ble High Court of Chhattisgarh in the case of Commissioner of

Income Tax (Exemption) Vs. Dignity Education Society (supra), we

direct the CIT(E) to grant registration by allowing the application filed

by the Assessee under Section 80G(5)(iv)(B) of the Act.

8.

In the result, the appeal of the Assessee is allowed.

Order pronounced in the Open Court on this 28th Day of April, 2026 Sd/- Sd/- (SANJAY AWASTHI) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 28/04/2026 R. Naheed * Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT

ASSISTANT REGISTRAR ITAT NEW DELHI

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