CHANDIGARH EDUCATIONAL SOCIETY,SAS NAGAR vs. DCIT/ACIT, CENTRAL CIRCLE II

PDF · subscribers
ITA 406/CHANDI/2026Status: DisposedITAT Chandigarh03 June 2026AY 2026-278 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the rejection of the Section 12AB registration, which was the sole basis for rejecting the Section 80G approval, no longer subsisted. However, the other statutory conditions for Section 80G approval were not examined.

What were the facts?

The assessee's application for approval under Section 80G was rejected by the PCIT because their application for registration under Section 12AB was previously rejected. However, the ITAT had subsequently directed the Revenue to grant registration under Section 12AB.

What were the issues?

Whether the rejection of Section 80G approval, based solely on the rejection of Section 12AB registration, is sustainable when the Section 12AB registration has been directed to be granted. Whether the other conditions for Section 80G approval need to be examined.

Which sections of the Income-tax Act were involved?

Section 80G,Section 12AB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DIVISION BENCH, ‘A’ CHANDIGARH

Before: SHRI LALIET KUMAR & SHRI MANOJ KUMAR AGGARWAL

For Appellant: Shri Rohit Kapoor, Advocate
For Respondent: Smt. Jaishree Sharma, CIT DR
Hearing: 03.06.2026Pronounced: 03.06.2026

Heard together (2 matters)

ITA Nos. 406/CHD/2026
ITA Nos. 407/CHD/2026

Read from the judgment's own cause title. This page is filed under one of them.

आयकर अपील�य अ�धकरण,च�डीगढ़ �यायपीठ, च�डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘A’ CHANDIGARH BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER आयकर अपील सं./ ITA Nos. 406/CHD/2026 �नधा�रण वष� / Assessment Year: 2026-27 Chandigarh Educational Society, The DCIT/ACIT, 1914G, Phase-10, Sector 55, Vs Central Circle -II, SO Mohali, Rupnagar. Chandigarh. �थायी लेखा सं./PAN NO: AAAAC8124A अपीलाथ�/Appellant ��यथ�/Respondent आयकर अपील सं./ ITA Nos. 407/CHD/2026 �नधा�रण वष� / Assessment Year: 2026-27 Chandigarh Educational Trust, The DCIT/ACIT, 2368, Phase-10, SAS Nagar, Vs Central Circle -II, Mohali, Rupnagar. Chandigarh. �थायी लेखा सं./PAN NO: AABTC2038D अपीलाथ�/Appellant ��यथ�/Respondent Assessee by : Shri Rohit Kapoor, Advocate Revenue by : Smt. Jaishree Sharma, CIT DR Date of Hearing : 03.06.2026 Date of Pronouncement : 03.06.2026 HYBRID HEARING O R D E R PER LALIET KUMAR, JM

The present two appeals have been filed by the assessee feeling aggrieved by the separate orders dated 26.12.2025 passed

ITA Nos.406 & 407/CHD/2026 A.Y. 2026-27 2

by the ld. Pr.Commissioner of Income Tax (Central) Gurgaon) [in

short ‘the PCIT’] on the grounds mentioned herein below :

ITA No. 406/CHD/2026 : 1. On the facts and circumstances of the case, the order passed by PCIT(C),Gurgaon is bad both in the eye of law and against the circumstances of the case. 2. That the observations recorded by the CIT(C) in the order rejecting registration under section 12AB have already been challenged before the Hon'ble ITAT, and the findings so recorded are erroneous and disputed; consequently, the rejection of approval under section 80G(5), being solely based on such impugned observations, is also bad in law and unsustainable. 3. That the PCIT (Central),Gurgaon erred in law in rejecting the application filed under clause(ii) of first proviso to Section 80G(5), without specifying the exact clause of Section 80G(5) under which the application has been rejected, thereby rendering the impugned order vague, non-speaking, and unsustainable in law. 4. That the Ld. CIT(E) has erred in rejecting the approval under section 80G(5) by observing that registration under section 12AB had already been rejected, whereas as a matter of record, the order rejecting approval under section 80G(5) was passed earlier at 5:38 p.m., and the order under section 12AB was passed subsequently at 6:16 p.m.; therefore, the finding of the Ld. CIT(E)/PCIT is factually Incorrect and based on an erroneous assumption of chronology, rendering the impugned order unsustainable in law. ITA No. 406/CHD/2026 : 1. On the facts and circumstances of the case, the order passed byPCIT(C),Gurgaon is bad both in the eye of law and against the circumstances of the case. 2. That the observations recorded by the CIT(C) in the order rejecting registration under section 12AB have already been challenged before the Hon'ble ITAT, and the findings so recorded are erroneous and disputed; consequently, the rejection of approval under section 80G(5), being solely based on such impugned observations, is also bad in law and unsustainable.

ITA Nos.406 & 407/CHD/2026 A.Y. 2026-27 3 3. That the PCIT (Central),Gurgaon erred in law in rejecting the application filed under clause(ii) of first proviso to Section 80G(5), without specifying the exact clause of Section 80G(5) under which the application has been rejected, thereby rendering the impugned order vague, non-speaking, and unsustainable in law. 4. That the order passed u/s 80G(5) is solely premised on the alleged cancellation of registration u/s 12AB; however, the said order under section 12AB is unsigned and invalid in the eyes of law and therefore cannot be relied upon. Consequently, the rejection under section 80G(5), being founded on an invalid and non-est order, is itself bad in law and liable to be quashed. 5. The appellant craves leave to add, amend or alter any of the grounds of appeal.

2.

Briefly stated, the facts of the case are that the assessee is a charitable institution engaged in carrying out activities stated to be charitable in nature. The assessee had filed an application before the competent authority seeking approval under section 80G of the Act. During the course of proceedings, the ld. noticed. PCIT that the assessee's application for registration under section 12AB of the Act had already been rejected by the Revenue authorities vide order dated 26.12.2025. Taking note of the said fact, the ld. PCIT held that one of the essential conditions for the grant of approval under Section 80G stood unfulfilled and, accordingly, rejected the application of the assessee.

3.

Aggrieved by the aforesaid order, the assessee has preferred the present appeal before the Tribunal. 4. During the course of hearing, the ld. Authorised Representative submitted that the sole and substantive basis on

ITA Nos.406 & 407/CHD/2026 A.Y. 2026-27 4 which the application under section 80G had been rejected was the rejection of registration under section 12AB of the Act. Inviting our attention to the order of the Coordinate Bench of the Tribunal dated 21.04.2026, passed in ITA Nos. 225 & 226/CHD/2026, the ld. AR submitted that the Tribunal has already adjudicated the controversy relating to registration under section 12AB and has directed the Revenue authorities to grant registration to the assessee under section 12AB of the Act. It was contended that once the registration under section 12AB has been directed to be granted by the Tribunal, the very foundation of the impugned order ceases to exist and, therefore, the approval under section 80G deserves to be granted. It was further submitted that the charitable nature of the institution and its objects already stand accepted by the Tribunal and no impediment survives for the grant of approval under section 80G.

5.

Per contra, the ld. Departmental Representative fairly admitted that the application under section 80G was rejected primarily on account of the rejection of registration under section 12AB of the Act. However, she submitted that the competent authority had not examined the assessee's case on merits vis-à- vis the other statutory requirements prescribed under section 80G of the Act. It was argued that, since the authority had proceeded on the premise that the assessee did not possess a

ITA Nos.406 & 407/CHD/2026 A.Y. 2026-27 5 valid registration under section 12AB, there was no occasion to examine the remaining conditions necessary for the grant of approval. It was, therefore, submitted that in the event the Tribunal finds merit in the contention of the assessee, the matter may be restored to the file of the competent authority for examining the fulfilment of the remaining statutory requirements.

6.

We have heard the rival submissions and perused the material available on record. We have also carefully gone through the impugned order as well as the order passed by the Coordinate Bench of the Tribunal in the assessee's own case concerning registration under section 12AB of the Act.

7.

The controversy involved in the present appeal lies in a narrow compass. The record reveals that the application seeking approval under section 80G was rejected principally on the ground that the assessee was not holding registration under section 12AB of the Act, the application for such registration having been rejected by the competent authority vide order dated 26.12.2025. It is not in dispute before us that the aforesaid rejection order has subsequently been examined by the Coordinate Bench of the Tribunal in ITA Nos. 225 & 226/CHD/2026 and vide order dated 21.04.2026 the Tribunal

ITA Nos.406 & 407/CHD/2026 A.Y. 2026-27 6 has directed the Revenue authorities to grant registration to the assessee under section 12AB of the Act.

8.

Thus, the primary objection which formed the basis of the impugned order no longer survives. The requirement regarding registration under section 12AB, which was considered fatal by the competent authority while rejecting the application under section 80G, now stands satisfied in view of the directions issued by the Tribunal. To that extent, the impugned order cannot be sustained. 9. At the same time, we find substance in the contention advanced by the ld. DR that the application of the assessee under section 80G was not independently examined on the touchstone of the remaining statutory conditions prescribed under the Act. Section 80G contemplates fulfilment of various conditions relating to the nature and objects of the institution, maintenance of regular books of account, application of income and assets for charitable purposes, and other statutory requirements. Since the application itself was rejected at the threshold for the absence of registration under section 12AB, the competent authority had no occasion to verify whether the remaining requirements were fulfilled.

10.

We further note that while directing the grant of registration under section 12AB, the Tribunal has already

ITA Nos.406 & 407/CHD/2026 A.Y. 2026-27 7 accepted the charitable character of the assessee and has recognised that the institution exists for charitable purposes. The issue regarding the charitable nature of the assessee and its eligibility for registration under section 12AB, therefore, stands concluded and need not be re-examined by the competent authority while considering the application under section 80G.

11.

In these circumstances, and in the interest of substantial justice, we deem it appropriate to set aside the impugned order and restore the matter to the file of the competent authority, under the Act, for the grant of approval for Section 80G.

12.

The competent authority shall reconsider the assessee's application for approval under section 80G afresh in accordance with law and shall examine whether the assessee fulfils the remaining statutory requirements prescribed for the grant of such approval. However, the issue relating to registration under section 12AB and the charitable nature of the assessee's activities shall be treated as concluded in view of the directions contained in the Tribunal's order dated 21.04.2026. The competent authority shall afford an adequate opportunity of hearing to the assessee and thereafter pass a speaking order in accordance with law, expeditiously.

13.

In the result, the appeal of the assessee is allowed for

ITA Nos.406 & 407/CHD/2026 A.Y. 2026-27 8

statistical purposes.

14.

Since the facts and issues involved in the connected appeal are identical, our findings and conclusions recorded herein shall apply mutatis mutandis to the said appeal as well.

15.

In the result, both the appeals filed by the assessee are allowed for statistical purposes.

Order pronounced on 3rd June,2026.

Sd/- Sd/-

(MANOJ KUMAR AGGARWAL) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER “Poonam” आदेश क� �ितिलिप अ�ेिषत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�/ CIT 4. िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड� फाईल/ Guard File

सहायक पंजीकार/ Assistant Registrar

More judgments on Section 80G

All 6,482 judgments and leading authorities on Section 80G →

Recent GST High Court judgments

Search GST case law →