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

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH MUMBAI BEFORE MS. KAVITHA RAJAGOPAL, JUDICIAL MEMBER & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER 1. ITA No. 2488/Mum/2026 (Assessment Year: 2026-27) & 2. ITA No. 2369/Mum/2026 (Assessment Year: 2026-27) Inspira Global CIT (Exemptions), Foundation Room No. 601, 6th 3/B, Hind Saurasta Vs. Floor, MTNL TE CHS Ltd. Andheri Kurla Building, Cumballa Road, Marol Naka, Hill, Pedder Road, Mumbai – 400 059 Mumbai-400 026 PAN/GIR No. AAHCI7703E (Applicant) (Respondent) Assessee by Shri Punit Shah, Ld. AR Revenue by Shri Virabhadra Mahajan, Ld. DR Date of Hearing 19.05.2026 Date of Pronouncement 20.05.2026 आदेश / ORDER PER MAKARAND VASANT MAHADEOKAR, AM: These two appeals filed by the assessee are directed against the separate orders passed by the learned Commissioner of Income Tax (Exemptions), Mumbai [hereinafter referred to as

2 ITA No. 2488 & 2369/Mum/2026 Inspira Global Foundation “CIT(E)”], both dated 18.12.2025, passed in Form No.10AD rejecting the assessee’s application for regular registration under section 12AB of the Income-tax Act, 1961[hereinafter referred to as "the Act"]and consequential rejection of approval under section 80G(5) of the Act. Since common facts and common issues are involved in both the appeals, these were heard together and are being disposed of by way of this consolidated order for the sake of convenience.

3 ITA No. 2488 & 2369/Mum/2026 Inspira Global Foundation Act, 1961 ("the Act"), due to non-grant of registration to the appellant u/s 12A(1)(ac). 2. The Ld. CIT(E) has erred in law and in facts in rejecting condonation of delay due to reasonable cause without exercising his powers as per proviso to section 12A(1)(ac). 3. The Ld. CIT(E) has erred in law and in facts in not granting registration to the Appellant under section 12AB on the ground that the object clause of the Appellant allows appellant to apply funds outside India even though it is not mentioned in the object clause and the said application of funds outside India does not fall under any categories of 'specified violation' as mentioned in Explanation to section 12AB(4) of the Act. 4. The appellant craves leave, to add, to alter, to amend, to modify, and/or to delete any of the above grounds of appeal. 4. Brief facts of the case are that the assessee is a charitable institution registered under section 8 of the Companies Act, 2013. The assessee had earlier obtained provisional registration under section 12AB of the Act vide order dated 20.09.2024 valid from A.Y. 2025-26 to A.Y. 2027-28. Thereafter, the assessee filed application in Form No.10AB on 09.10.2025 seeking regular registration under section 12A(1)(ac)(iii) of the Act.

4 ITA No. 2488 & 2369/Mum/2026 Inspira Global Foundation 20.09.2024 and, therefore, according to him, the assessee ought to have filed application for regular registration within six months from commencement of activities. However, the assessee filed Form No.10AB only on 09.10.2025 and therefore, according to the learned CIT(E), there was delay of approximately seven months in filing the application. 7. The learned CIT(E) further observed that clause 3(a) of the Memorandum of Association allegedly enabled the assessee to apply/receive funds outside India and according to him, the same was in violation of section 11 of the Act. A show cause notice dated 18.11.2025 was issued to the assessee on both the issues, namely, delay in filing Form No.10AB and alleged violation of section 11 of the Act. 8. In response thereto, the assessee submitted before the learned CIT(E) that the trust commenced activities in December 2024 and due to unavoidable circumstances and technical issues, the application for regular registration was filed on 09.10.2025 beyond the prescribed period and therefore requested for condonation of delay. 9. However, the learned CIT(E) rejected the application holding that the assessee failed to establish any reasonable cause or genuine hardship for condonation of delay. The learned CIT(E) further held that the object clause permitting application of funds outside India was contrary to section 11 of the Act and accordingly rejected the application for registration under section

5 ITA No. 2488 & 2369/Mum/2026 Inspira Global Foundation 12AB vide order dated 18.12.2025 passed under section 12AB(1)(b)(ii) of the Act. 10. Consequent thereto, the learned CIT(E) also rejected the application for approval under section 80G(5) vide separate order dated 18.12.2025 holding that since the assessee was not granted registration under section 12AB, the conditions prescribed under section 80G(5)(i) were not fulfilled. 11. During the course of hearing before us, the learned Authorised Representative (“AR”) submitted that the learned CIT(E) has erred both on facts and in law in refusing to condone the delay and in rejecting the application for registration. The learned AR submitted that the proviso inserted to section 12A(1)(ac) empowers the Commissioner to condone delay where reasonable cause is shown and the learned CIT(E) failed to exercise the said jurisdiction judiciously. 12. The learned AR further relied heavily upon the decision of the co-ordinate bench in the case of Shamkris Charity Foundation vs. CIT(E) reported in [2025] 180 taxmann.com 58 (Mumbai-Tribunal), particularly para 6 thereof, wherein the Co-ordinate Bench held that while considering the application for final registration under section 12A, the approach of the authority should be equitable, balanced and judicious and directed the CIT(E) to condone the delay and consider the application on merits.

6 ITA No. 2488 & 2369/Mum/2026 Inspira Global Foundation 13. The learned AR also relied upon para 8 of the said decision wherein the co-ordinate bench held that mere existence of an object permitting application of income outside India does not amount to a “specified violation” under Explanation to section 12AB(4) and unless and until income is actually applied outside India in contravention of section 11, the same cannot be a ground either for cancellation or denial of registration. 14. The learned AR further submitted that the learned CIT(E) misconstrued clause 3(a) of the Memorandum of Association. According to the learned AR, object clause 3(a) refers to “nationality” only in the context of beneficiaries within India and clause 4 of the Memorandum specifically provides that the area of operation is “whole of India”. Therefore, according to the learned AR, the object clause does not contemplate application of funds outside India. The learned AR further submitted that the assessee has already amended the object clause of the Memorandum of Association removing any possible ambiguity and the amended object clause was also placed on record before the Co-ordinate Bench, though the same was not available before the learned CIT(E). 15. Per contra, the learned Departmental Representative relied upon the orders passed by the learned CIT(E) and submitted that the filing of Form No.10AB within prescribed time is mandatory and the assessee failed to establish sufficient cause for delay. It was further submitted that the object clauses enabled the assessee to apply funds outside India and therefore the learned

7 ITA No. 2488 & 2369/Mum/2026 Inspira Global Foundation CIT(E) was justified in rejecting the application.The learned DR also contended that the subsequent amendment carried out by the assessee in its object clauses itself demonstrates that there existed defects, ambiguities or inconsistencies in the original object clauses. According to the learned DR, had there been no infirmity in the original clauses, there would have been no occasion for the assessee to amend the Memorandum of Association subsequently. 16. We have heard the rival submissions and perused the material available on record. We have also carefully gone through the impugned orders passed by the learned CIT(E), the Memorandum of Association of the assessee, the amended object clauses placed before us, and the judicial precedents relied upon by both the parties. 17. The primary issue arising for our consideration is whether the learned CIT(E) was justified in rejecting the assessee’s application for regular registration under section 12AB of the Act on the grounds of delay in filing Form No.10AB and alleged violation of section 11 of the Act on account of object clause 3(a) of the Memorandum of Association. 18. So far as the issue relating to delay in filing Form No.10AB is concerned, we find that the learned CIT(E) rejected the assessee’s request for condonation of delay primarily on the ground that the assessee had failed to establish any reasonable cause or genuine hardship for not filing the application within the prescribed time limit under section 12A(1)(ac)(iii) of the Act. The

8 ITA No. 2488 & 2369/Mum/2026 Inspira Global Foundation learned DR strongly supported the findings recorded by the learned CIT(E) and submitted that the filing of Form No.10AB within the prescribed statutory time limit is mandatory in nature and cannot be treated as a mere procedural requirement. According to the learned DR, the assessee failed to furnish any cogent or convincing explanation warranting exercise of discretionary power of condonation by the learned CIT(E).

6.From the perusal of the above amendment we notice that the legislature after considering the hardship faced by the Trusts by not filing the necessary Form for final registration within time and in order to reduce the risk of the trust exiting has enabled the Principal Commissioner/ Commissioner to condone the delay with effect from 01.10.2024. The CBDT as per Circular No.7/2024 dated 25.04.2024 extended the time limit to 30.06.2024. In assessee's case, the application has been filed on 24.08.2024 which falls in the interim period where the assessee has submitted before the CIT(E) explaining the cause for delay of 54 days in filing the application. Considering the facts which is unique to the present case and the legislative intent, we are of the considered view that the approach while considering application made by the assessee for final registration under section 12A need to be equitable, balancing and judicious. Accordingly, we

9 ITA No. 2488 & 2369/Mum/2026 Inspira Global Foundation direct the CIT(E) to consider the application made by the assessee for final registration on merits and allow the same in accordance with law. 20. We further notice that the co-ordinate bench had also reproduced and considered the proviso inserted by the Finance Act (No.2), 2024 which reads as under: “Provided that where the application is filed beyond the time allowed in sub-clauses (i) to (vi), the Principal Commissioner or Commissioner may, if he considers that there is a reasonable cause for delay in filing the application, condone such delay and such application shall be deemed to have been filed within time.” 21. The Co-ordinate Bench further reproduced the Memorandum explaining the provisions of the Finance Bill which clarified that the amendment was introduced considering the hardship faced by charitable institutions on account of delayed filing and to avoid permanent exit from the exemption regime. 22. In the facts of the present case also, we notice that the assessee had furnished an explanation before the learned CIT(E) stating that the charitable activities were actually commenced in December 2024 and due to unavoidable circumstances and technical issues, the application for regular registration could not be filed within the prescribed time. The learned AR specifically contended that the learned CIT(E) proceeded on an incorrect assumption that the delay was of about seven months reckoning the period from the date of provisional registration granted on 20.09.2024, whereas the relevant statutory period was required to be considered from the commencement of actual activities, which according to the assessee commenced only in December

10 ITA No. 2488 & 2369/Mum/2026 Inspira Global Foundation 2024. Therefore, according to the learned AR, even assuming the delay computation adopted by the Revenue, the actual delay was substantially lesser and the same deserved liberal consideration particularly in the light of the proviso inserted in section 12A(1)(ac) empowering the Commissioner to condone delay upon existence of reasonable cause. 23. We find considerable force in the aforesaid submission of the assessee. The proviso inserted in section 12A(1)(ac) specifically confers discretionary jurisdiction upon the Commissioner to condone delay where reasonable cause is shown. In our considered view, the said provision deserves to be interpreted in a purposive, pragmatic and justice-oriented manner particularly while dealing with charitable institutions seeking continuation of exemption regime. The legislative intent behind insertion of the proviso itself was to mitigate hardship faced by charitable institutions and to avoid denial of exemption merely on account of technical or procedural lapses. Therefore, the approach of the authority, as rightly observed by the co- ordinate bench in the case of Shamkris Charity Foundation (supra), has to be equitable, balanced and judicious rather than hyper-technical. 24. The next objection raised by the learned CIT(E) pertains to alleged violation of section 11 on the ground that object clause 3(a) of the Memorandum of Association enables the assessee to apply funds outside India. The learned DR vehemently argued that the subsequent amendment carried out by the assessee in

11 ITA No. 2488 & 2369/Mum/2026 Inspira Global Foundation the object clauses itself demonstrates that there existed ambiguity or infirmity in the original object clauses and therefore the learned CIT(E) was justified in rejecting the application. According to the learned DR, if there was no defect in the original clauses, there was no necessity for the assessee to amend the Memorandum of Association subsequently. 25. We have carefully considered the aforesaid contention of the learned DR. In our considered view, merely because the assessee has amended certain clauses in the Memorandum of Association by way of abundant caution or to remove any possible ambiguity, the same by itself cannot lead to an automatic inference that the original objects were illegal or inherently violative of section 11 of the Act. Charitable institutions frequently amend or clarify their object clauses so as to align the same more specifically with statutory requirements and to avoid future interpretational disputes. Such amendment, in our considered opinion, cannot by itself constitute conclusive proof of any “specified violation” within the meaning of Explanation to section 12AB(4) of the Act. 26. At this stage, it would be relevant to refer in some detail to the decision of the co-ordinate bench in the case of Shamkris Charity Foundation (supra), wherein the Co-ordinate Bench , after considering the earlier decision in the case of TIH Foundation for IOT and IOE vs. CIT(E), examined an identical controversy relating to denial of registration on the ground that the objects allegedly permitted application of funds outside India. The Co-ordinate Bench noticed that in the said case, the assessee

12 ITA No. 2488 & 2369/Mum/2026 Inspira Global Foundation was a not-for-profit company incorporated under section 8 of the Companies Act pursuant to the directions of the Ministry of Science and Technology, Government of India and hosted by IIT Bombay under the National Mission on Interdisciplinary Cyber- Physical Systems (NM-ICPS). The learned CIT(E) therein had rejected registration merely on the apprehension that the object clauses created possibility of future expenditure outside India. After considering the statutory framework of section 12AB, the judgment of the Hon’ble Delhi High Court in the case of M.K. NambyarSaarf Law Charitable Trust vs. Union of India reported in 269 ITR 556 (Delhi), and the scope of “specified violations” under Explanation to section 12AB(4), the co-ordinate bench held as under:

12.1. It may be noticed that clauses (a), (c), (d) and (e) would be attracted only when there is application of income as mentioned in those clauses. Hence "actual application of income" is the condition to he satisfied for attracting the above said four clauses. 13. In our view, the provisions of sec.11(1) would not fall under the category of "any other law", since it is only a computation provision. The provisions of sec.11(1) do not require the charitable trust or institution to comply with any requirements, which are essential to achieve the objects of the Further provision of sec. 11(1) do not state that the application of income derived from property held under trust for activities carried outside India results in violation of any law. Sec. II only states that the exemption under that section is restricted to income applied for charitable purposes in India. Ledues not permit exemption of income applied outside India. Hence income, if any, applied for objects outside India cannot be construed to be violation of any other law' falling within the meaning of clause (1) it Explanation to sec. 12AB(4) of the Act. 14. The foregoing discussions would show that the application of income of a charitable trust or institution outside India for carrying out

13 ITA No. 2488 & 2369/Mum/2026 Inspira Global Foundation is objects will not fall under any of the categories of specified violation as mentioned in the Explanation to sec.12AB(4) of the Act. Hence, the decision rendered by Hon'ble Delhi High Court in the case of M.K. NambyarSaarf Law Charitable Trust v. Union of India [2004] 140 Taxman 616/269 ITR 556 (Delhi) will apply to the provisions of sec12AB of the Act also, since the provisions of sec. 12AB also do not refer to the activities carried in India or outside India 15. In view of the foregoing discussions, it can be concluded that existence of any object for carrying out any activity outside India will not enable the Ld. CIT(E) to deny registration u/s 12AB of the Act. As observed earlier, such kind of application of income outside India (unless it is permitted by the CBDT) will not be exempted u/s 11 of the Act." 27. Thereafter, while deciding the appeal in the case of Shamkris Charity Foundation, the co-ordinate bench followed the aforesaid decision and categorically held that mere existence of an object permitting application of income outside India does not amount to a “specified violation” under Explanation to section 12AB(4) and unless and until income is actually applied outside India in violation of section 11, the same cannot be construed as a ground either for cancellation or denial of registration.

14 ITA No. 2488 & 2369/Mum/2026 Inspira Global Foundation The assessee has also placed on record amended object clauses clarifying the position, though admittedly the same were not before the learned CIT(E). 29. In our considered opinion, the learned CIT(E) ought to have examined the Memorandum of Association and the actual activities of the assessee in proper perspective instead of proceeding merely on hypothetical apprehensions and presumptions. Registration under section 12AB cannot be denied merely on speculative assumptions in absence of any actual violation of statutory provisions. The scheme of section 12AB requires satisfaction regarding the objects and genuineness of activities and not adjudication based upon remote possibilities or hypothetical future contingencies. 30. Considering the entirety of facts and circumstances of the case and respectfully following the ratio laid down by the co- ordinate bench in the cases of Shamkris Charity Foundation (supra), TIH Foundation for IOT and IOE (supra) and Dedhia Music Foundation (supra), we deem it appropriate to set aside the impugned order passed by the learned CIT(E) rejecting registration under section 12AB of the Act and restore the matter back to his file for fresh adjudication in accordance with law. The learned CIT(E) shall examine the assessee’s application afresh after considering the amended object clauses, the actual activities carried out by the assessee and after affording reasonable opportunity of hearing to the assessee. The learned CIT(E) shall also consider the assessee’s request for condonation of delay in a

15 ITA No. 2488 & 2369/Mum/2026 Inspira Global Foundation fair, equitable and judicious manner keeping in view the legislative intent behind insertion of proviso to section 12A(1)(ac).

Order pronounced in the open court on 20.05.2026.

Sd/- Sd/- (KAVITHA RAJAGOPAL) (MAKARAND VASANT MAHADEOKAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated 20/05/2026 Dhananjay, Sr.PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : अपीलाथी / The Appellant 1. प्रत्यथी / The Respondent. 2. 3. संबंधधत आयकर आयुक्त / The CIT(A) 4. आयकर आयुक्त(अपील) / Concerned CIT 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