KAMLABEN BABULAL CHARITY TRUST ,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 ITA No. 3903/Mum/2026 (Assessment Year: 2026-27) Kamlaben Babulal Commissioner Of Charity Trust Income Tax Vs. (Exemptions) 18th Floor,DLH Park, S V Road,Near MTNL , MTNL Building, 6th Bangur Nagar S.O, Floor, Pedder Road, Goregaon, Mumbai, Cumballa Hill, Mumbai, 400104, Maharashtra Mumbai-400026 PAN/GIR No. AAATK6161E (Applicant) (Respondent) Assessee by Shri Mani Jain, Ld. AR Revenue by Shri Yogesh Kamat, Ld. DR Date of Hearing 25.06.2026 Date of Pronouncement 30.06.2026 आदेश / ORDER PER MAKARAND VASANT MAHADEOKAR, AM: This appeal by the assessee is directed against the order dated 28.02.2026 passed by the learned Commissioner of Income Tax (Exemptions), Mumbai [“the learned CIT(E)”], in Form No. 10AD, whereby the application filed by the assessee in Form No. 10AB under section 12A(1)(ac)(ii) of the Income Tax Act, 1961

2 ITA No. 3903/Mum/2026 Kamlaben Babulal Charity Trust [“the Act”], seeking renewal of registration under section 12AB of the Act, was rejected. 2. The assessee has raised the following grounds of appeal: 1. On the facts and circumstances of the Appellant’s case and in law, the Ld. CIT (Exemptions) has erred in rejecting the application made by the applicant u/s 12A(1)(ac)(ii) seeking renewal registration under section 12AB of the Income Tax Act, 1961, for the reasons mentioned in the impugned order or otherwise. 2. The Appellant craves leaves to alter, amend withdraw or substitute any ground or grounds or to add any new ground or grounds of appeal on or before the hearing. 3. The relevant facts, as emanating from the impugned order, are that the assessee is stated to be engaged in charitable activities. The assessee filed an application in Form No. 10AB on 26.09.2025 under section 12A(1)(ac)(ii) of the Act, seeking renewal of its registration under section 12AB of the Act. 4. Upon 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. Accordingly, a notice dated 12.01.2026 was issued to the assessee, requiring it to furnish the complete set of documents specified under rule 17A(2) of the Income Tax Rules, 1962. In response to the said notice, the assessee furnished a reply dated 16.01.2026 along with certain details and documents. 5. On examination of the reply and the documents furnished by the assessee, the learned CIT(E) observed that the assessee had not furnished a copy of the registration certificate granted

3 ITA No. 3903/Mum/2026 Kamlaben Babulal Charity Trust under section 12A or section 12AA of the Act, or an approval granted under section 10(23C) of the Act, under the erstwhile regime prevailing prior to 01.04.2021. The learned CIT(E) noted that, vide notice dated 12.01.2026, the assessee had specifically been required to furnish a self-certified copy of its earlier registration under section 12A, section 12AA or section 10(23C) of the Act, but the assessee had failed to furnish the same. 6. The learned CIT(E) further observed that the assessee had obtained regular registration under section 12AB of the Act in Form No. 10AC dated 27.10.2021, which was valid for a period of five years, namely, from assessment year 2022-23 to assessment year 2026-27. The learned CIT(E) referred to the amended registration regime introduced with effect from 01.04.2021 and observed that trusts or institutions already registered under section 12AA or approved under section 10(23C) of the Act under the erstwhile regime were required to apply for fresh registration under section 12AB by filing Form No. 10A under sub-clause (i) of clause (ac) of section 12A(1) of the Act. 7. The learned CIT(E) also observed that trusts or institutions which did not possess any prior registration under section 12AA or approval under section 10(23C) of the Act were required to apply for provisional registration under section 12AB by filing Form No. 10A under sub-clause (vi) of clause (ac) of section 12A(1) of the Act. According to the learned CIT(E), since the assessee was seeking renewal of regular registration under section 12AB, it was incumbent upon the assessee to establish

4 ITA No. 3903/Mum/2026 Kamlaben Babulal Charity Trust that it had been validly registered under section 12AA or approved under section 10(23C) of the Act prior to 01.04.2021. 8. The learned CIT(E) held that, in the absence of the registration certificate under the erstwhile regime, the validity of the registration granted to the assessee under section 12AB in Form No. 10AC dated 27.10.2021 could not be established. He, therefore, concluded that the registration obtained by the assessee under section 12AB could not be regarded as valid in law and that the assessee did not satisfy the basic eligibility conditions for seeking renewal of registration, since the regular registration sought to be renewed was itself considered invalid. 9. The learned CIT(E), referring to section 12AB(1)(b) of the Act, further observed that registration could be granted only upon satisfaction regarding the objects of the trust or institution, the genuineness of its activities and compliance with such other laws as may be material for achieving its objects. In view of the alleged absence of the requisite documentary evidence, the learned CIT(E) rejected the application filed by the assessee in Form No. 10AB. The operative conclusion of the impugned order records that the application seeking renewal of regular registration was not allowable on the ground that the registration obtained under section 12AB for five years in Form No. 10AC was invalid. The application for grant of registration under section 12A of the Act was accordingly rejected.

5 ITA No. 3903/Mum/2026 Kamlaben Babulal Charity Trust 10. Before us, the learned Authorised Representative (AR) placed on record a copy of the registration certificate issued to the assessee under the erstwhile regime. Referring to the said certificate, he submitted that the assessee-trust was created on 21.10.2002 and was granted registration under section 12AA(1)(b)(i) of the Act pursuant to its application dated 16.05.2003. The registration was granted with effect from 21.10.2002 and the certificate was issued on 16.10.2003. 11. The learned AR submitted that the old registration certificate conclusively establishes that the assessee was duly registered under section 12AA of the Act prior to 01.04.2021. He contended that the very basis on which the learned CIT(E) treated the registration granted in Form No. 10AC dated 27.10.2021 as invalid no longer survives once the old registration certificate is taken into consideration. 12. The learned AR further submitted that the learned CIT(E) had issued only one notice dated 12.01.2026 and, upon the alleged failure of the assessee to furnish the old registration certificate in response thereto, proceeded to reject the application without issuing any further notice or granting an effective opportunity to produce the certificate. It was submitted that the certificate was available with the assessee and has now been placed before the Tribunal. He, therefore, prayed that the impugned order be set aside and the matter be restored to the file of the learned CIT(E) for fresh adjudication after taking the certificate and the other relevant materials into consideration.

6 ITA No. 3903/Mum/2026 Kamlaben Babulal Charity Trust 13. Per contra, the learned Departmental Representative relied upon the impugned order passed by the learned CIT(E). He, however, raised no objection to the matter being restored to the file of the learned CIT(E) for fresh adjudication after considering the registration certificate placed on record by the assessee and after affording the assessee a reasonable opportunity of being heard. 14. We have heard the rival submissions and perused the material placed on record. The sole reason substantially prevailing with the learned CIT(E) for rejecting the assessee’s application was that the assessee had failed to furnish documentary evidence of its registration under section 12A or section 12AA of the Act under the erstwhile regime prior to 01.04.2021. On that basis, the learned CIT(E) held that the regular registration granted to the assessee in Form No. 10AC dated 27.10.2021 could not be regarded as valid and, consequently, the assessee was not eligible to seek renewal of such registration. 15. The assessee has now placed before us a copy of the certificate dated 16.10.2003 issued under section 12AA(1)(b)(i) of the Act. The certificate records that the assessee-trust was created on 21.10.2002 and that registration was granted with effect from 21.10.2002 pursuant to the application dated 16.05.2003. Thus, the document now placed before us goes to the root of the reason assigned in the impugned order for rejecting the application.

7 ITA No. 3903/Mum/2026 Kamlaben Babulal Charity Trust 16. It is also evident from the impugned order that only one notice dated 12.01.2026 was issued to the assessee and the application was thereafter rejected on 28.02.2026, principally for non-production of the old registration certificate. Considering the nature of the deficiency and the materiality of the certificate to the eligibility of the assessee, we are of the considered view that the interests of justice would be adequately served by restoring the matter to the file of the learned CIT(E) for examination of the certificate and for deciding the application afresh in accordance with law. 17. We further find that the approach adopted by the learned CIT(E) in treating the registration already granted to the assessee as invalid is not in consonance with the statutory scheme. Once registration has been granted by the competent authority, the same continues to remain operative unless it is cancelled or withdrawn in accordance with the procedure prescribed under the Act. Such registration cannot be treated as non est or invalid in collateral proceedings merely because the assessee failed to furnish a copy of the earlier registration certificate in response to a notice. The non-production of the certificate may warrant verification or an opportunity to cure the deficiency, but, by itself, it cannot confer jurisdiction upon the learned CIT(E) to declare an existing registration invalid without following the statutory procedure prescribed for its cancellation. 18. In the present case, the assessee has placed before us a copy of the registration certificate dated 16.10.2003 issued under

8 ITA No. 3903/Mum/2026 Kamlaben Babulal Charity Trust section 12AA(1)(b)(i) of the Act, evidencing that registration was granted with effect from 21.10.2002. The said certificate directly addresses the deficiency noticed in the impugned order and goes to the root of the matter. Since the learned CIT(E) did not have occasion to examine the certificate and reconcile the same with the departmental records, we consider it appropriate to restore the matter for this limited purpose. However, while doing so, we make it clear that the registration already granted to the assessee cannot be treated as invalid merely on account of the earlier non- production of the certificate. 19. In view of the foregoing discussion, we set aside the impugned order dated 28.02.2026 and restore the application filed by the assessee in Form No. 10AB to the file of the learned CIT(E). The learned CIT(E) shall verify the registration certificate dated 16.10.2003 issued under section 12AA(1)(b)(i) of the Act from the relevant departmental records and thereafter adjudicate the assessee’s application for renewal of registration under section 12AB of the Act afresh, in accordance with law. The assessee shall be at liberty to furnish the original certificate, a certified copy thereof and such other supporting documents as may be required. 20. Needless to state, the learned CIT(E) shall afford the assessee a reasonable and effective opportunity of being heard before passing the fresh order. The assessee is also directed to extend due cooperation and furnish the requisite documents and explanations within the time allowed. The learned CIT(E) shall

9 ITA No. 3903/Mum/2026 Kamlaben Babulal Charity Trust decide the application on its merits after taking into consideration the registration certificate placed on record and shall not treat the subsisting registration as invalid except in accordance with the procedure specifically prescribed under the Act. Save as observed hereinabove, all other issues relating to the assessee’s entitlement to renewal are left open for adjudication by the learned CIT(E).

Order pronounced in the open court on 30.06.2026.

Sd/- Sd/- (SAKTIJIT DEY) (MAKARAND VASANT MAHADEOKAR) VICE PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated 30/06/2026 Dhananjay, Sr.PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. संबंधधत आयकर आयुक्त / The CIT(A) 3. 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