BHARTIYA STREE SEVA SANGH ,MUMBAI vs. CIT(EXEMPTION), MUMBAI

The brief facts, shorn of unnecessary details yet retaining the essential substratum necessary for adjudication, are that the assessee trust/institution had filed an application seeking approval under Section 80G of the Act. During the course of proceedings before the learned CIT(E), notices were issued requiring the assessee to furnish various documents and details as prescribed under Rule 11AA of the Income Tax Rules. Thereafter, upon examination of the documents furnished along with Form No.10AB and the material available on the ITBA/CPC portal, the learned CIT(E) observed that as per the trust deed/Memorandum of Association, there was no specific clause relating to irrevocability or dissolution/winding up of the trust/institution. According to the learned CIT(E), such a clause was mandatory in terms of the statutory scheme so as to ensure that, upon dissolution, the assets of the trust would continue to be utilized solely for

Based on the aforesaid observations, a show cause notice dated 05.12.2025 was issued to the assessee requiring it to explain as to why its application under consideration should not be rejected. The learned CIT(E) further observed that the assessee had also not filed the application for renewal/regularization of registration under Section 12AB within the time prescribed under clause (ii) of Section 12AB(1)(ac). It was noted that the assessee had originally been granted provisional registration under Section 12AB vide Form No.10AC dated 24.09.2021, valid from A.Y. 2022-23 to A.Y. 2026-27, and since such registration was expiring on 31.03.2026, the application for renewal ought to have been filed six months prior thereto, i.e., by 30.09.2025. However, according to the learned CIT(E), no such application had been filed till the passing of the impugned order and, therefore, the assessee was not possessed of regular registration under Section 12AB having validity for five years, which, according to him, was an essential condition for grant of approval under Section 80G.

In response to the aforesaid show cause notice, the assessee submitted before the learned CIT(E) that the members of the trust/society had already initiated the

Before us, the learned counsel for the assessee submitted that the primary defect pointed out by the learned CIT(E), namely non filing of application for renewal/regularization under Section 12AB, no longer survives inasmuch as the assessee has already filed the application for renewal of registration under Section 12AB on 19.01.2026 before the learned CIT(E), which application is still pending adjudication. He submitted that once the application for renewal under Section 12AB is pending consideration before

The learned Departmental Representative fairly submitted that he has no serious objection if the matter is restored back to the file of the learned CIT(E) for fresh adjudication after disposal of the assessee’s application under Section 12AB.

We have heard both the parties and perused the material placed on record including the reasoning given in the impugned order. From the facts borne out from the record, it is an admitted position that the assessee had originally been granted provisional registration under Section 12AB vide Form No.10AC dated 24.09.2021 and the said registration admittedly remained valid up to 31.03.2026. It is also not in dispute that the assessee has subsequently filed the application for renewal/regularization under Section 12AB on 19.01.2026 and the same is presently pending consideration before the learned CIT(E). Thus, the very foundation on which the impugned order rejecting approval under Section 80G has been passed, namely non availability of regular registration

In our considered opinion, once the assessee’s application under Section 12AB is pending before the competent authority for consideration, then the issue relating to grant of approval under Section 80G, which is dependent upon and intertwined with the registration under Section 12AB, cannot be viewed in isolation divorced from the outcome of such proceedings. The approach which commends itself to judicial propriety and principles of fair play would require that the application under Section 80G be considered afresh after adjudication of the application filed under Section 12AB, because the outcome of the latter would have a direct bearing upon the former. More so, when even the issue relating to inclusion of irrevocability/dissolution clause was explained by the assessee before the learned CIT(E) stating that the process for incorporation of such clause through supplementary deed had already been initiated and the learned CIT(E) himself, in para 4.2 of the impugned order, had observed that the assessee had duly initiated proceedings for inclusion of such clause and that the explanation furnished by the assessee was acceptable.

Thus, considering the entirety of the factual matrix and in the interest of substantial justice, we deem it fit and proper to

In the result, the appeal of the assessee is treated as allowed for statistical purposes.