MGIDEI FOUNDATION,JAIPUR vs. ITO WARD-6(1), JAIPUR

ITA 492/JPR/2026Status: DisposedITAT Jaipur08 October 2026AY 2025-202611 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the impugned orders of the learned CIT(E) could not be sustained. Regarding the delay in filing the applications, the Tribunal condoned the delay for both the section 12AB and section 80G applications, treating them as filed within time, as the reasons for delay were common and bona fide. Concerning the characterization of activities as business or commercial, the Tribunal noted that the learned CIT(E) did not identify the specific limb of section 2(15) under which the activities fell or examine the applicability of the proviso. The Tribunal found that these were questions of fact requiring examination of the assessee's objects, MOUs, project proposals, utilization certificates, and accounts, which should be done by the learned CIT(E) in the first instance. Therefore, no finding was recorded on this issue, leaving it open for a fresh decision. On the issue of honorarium paid to a director, the Tribunal referred to section 13(1)(c) read with section 13(2)(c) of the Act, stating that the statute does not forbid payment for services rendered, but the test is whether services were rendered and if the amount is reasonable. The absence of a degree was one circumstance, but the reasonableness of the amount and other factual aspects required proper examination. The Tribunal set aside both orders of the learned CIT(E) and restored the applications to the file of the learned CIT(E) for a fresh decision on merits. The learned CIT(E) was directed to examine the nature and genuineness of activities, the honorarium, and any other relevant aspect, and to grant a reasonable opportunity of hearing to the assessee. The cancellation of provisional registration and approval was also set aside, to abide by the fresh decision.

What were the facts?

The assessee, Mgidei Foundation, a company registered under section 8 of the Companies Act, 2013, was granted provisional registration under section 12A and provisional approval under section 80G on September 1, 2023. The assessee commenced activities on November 1, 2023. On September 30, 2025, it filed applications for final registration under section 12AB and approval under section 80G(5). The Commissioner of Income Tax (Exemptions) [CIT(E)], Jaipur, rejected both applications and cancelled the provisional registrations/approvals by orders dated February 9, 2026. The assessee appealed these orders to the Income Tax Appellate Tribunal (ITAT), Jaipur Bench, for assessment years 2025-26. The appeals were heard together due to common facts and issues.

What were the issues?

The Tribunal had to decide the following issues: 1. Whether the learned CIT(E) erred in rejecting the final registration application under section 12AB of the Income Tax Act, 1961, and cancelling the provisional registration. 2. Whether the learned CIT(E) erred in rejecting the application for approval under clause (iii) of the first proviso to section 80G(5) of the Act and cancelling the provisional approval. Assessee's Contentions: * The rejection of the registration and approval applications was incorrect and invalid in law. * The learned CIT(E) erred in refusing to condone the delay in filing Form No. 10AB without appreciating the bona fide and reasonable causes for the delay, which were beyond the assessee's control. * The learned CIT(E) erroneously characterized the assessee's charitable activities as business or commercial activities without properly appreciating their true nature, objects, and manner of execution. * The learned CIT(E) erred in rejecting the applications on the ground of non-genuineness of activities and siphoning off funds, as the activities and utilization of funds were genuine and explainable. * The cancellation of provisional registration and approval was incorrect and unlawful. Revenue's Contentions: The judgment does not explicitly record the revenue's contentions. However, the findings of the learned CIT(E) indicate the revenue's stance on delay, business activity, non-genuineness, and siphoning of funds.

Which sections of the Income-tax Act were involved?

Section 12AB,Section 80G(5),Section 12A(1)(ac)(iii),Section 2(15),Section 13(1)(c),Section 13(2)(c),Section 13(3),Section 253(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, JAIPUR

Before: Shri Kuldip Singh & Shri Prakash

PER : PRAKASH, ACCOUNTANT MEMBER:-

1.

These two appeals by the Assessee are directed against two orders of the learned Commissioner of Income Tax (Exemptions), Jaipur [hereinafter referred to as “the learned CIT(E)”], both dated 09.02.2026, passed in Form No. 10AD. By the first order, the learned CIT(E) rejected the application of the assessee for registration under section 12AB of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) and cancelled its provisional registration. By the second order, the learned CIT(E) rejected the application of the assessee for approval under clause

ITA Nos. 492 & 493/JPR/2026 Mgidei Foundat

The order continues below.

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