KHP FOUNDATION,BANGALORE vs. COMMISSIONER OF INCOME TAX (EXEMPTIONS), BANGALORE

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ITA 2236/BANG/2026Status: DisposedITAT Bangalore07 October 2026AY 2025-265 pages
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What did the Tribunal hold?

The Tribunal held that the Ld. CIT(E) had erred by conflating the requirements of clause (i) and clause (ii) of the first proviso to Section 80G(5) of the Act. Clause (i) pertains to institutions approved before 01.04.2021, whereas clause (ii) specifically addresses institutions whose existing approval is expiring and are seeking continuation. The assessee's application clearly fell under clause (ii). Therefore, possessing a valid existing approval under Section 80G for A.Ys. 2022-23 to 2026-27 and filing the continuation application within the prescribed period meant that the absence of an approval prior to 01.04.2021 could not be a sole ground for rejection. The Tribunal found no adverse findings regarding the assessee's charitable objects or the genuineness of its activities, especially since its Section 12A application was approved on the same date. Consequently, the Tribunal set aside the CIT(E)'s order and restored the application to the CIT(E) for fresh consideration under the provisions applicable to continuation of an existing approval under Section 80G(5)(ii), without insisting on prior approval before 01.04.2021. The application is to be decided on merits after affording the assessee a reasonable opportunity of hearing. The grounds raised by the assessee were allowed for statistical purposes.

What were the facts?

The assessee, KHP Foundation, filed an appeal against the order of the Commissioner of Income Tax (Exemptions), Bangalore, for Assessment Year 2025-26. The assessee, a charitable institution, had obtained approval under Section 80G of the Income Tax Act for Assessment Years 2022-23 to 2026-27 vide an order dated 30.11.2023. As this approval was nearing expiry, the assessee filed Form No. 10AB on 27.09.2025 seeking continuation/renewal of approval under Section 80G(5)(ii). The CIT(E) rejected the application, citing the assessee's failure to provide evidence of approval under Section 80G prior to 01.04.2021, which the CIT(E) considered a prerequisite for renewal.

What were the issues?

1. Whether the Ld. CIT(E) was justified in rejecting the assessee’s application for approval/renewal under Section 80G of the Act merely on the ground that the assessee had not furnished evidence of approval under Section 80G prior to 01.04.2021, despite having an existing approval for A.Ys. 2022-23 to 2026-27 and the present application being filed for renewal thereof. Assessee's Contentions: - The Ld. AR argued that the Ld. CIT(E) misinterpreted Section 80G(5) of the Act. There is no requirement under clause (ii) of the first proviso to Section 80G(5) that an assessee seeking renewal of an existing approval must also establish prior approval before 01.04.2021. Clause (i) applies to institutions already approved before 01.04.2021, while clause (ii) applies to institutions whose existing approval is expiring. The assessee's application correctly falls under clause (ii). - The assessee had a valid approval up to A.Y. 2026-27 and filed the renewal application before its expiry. - The assessee's application for registration under Section 12A(1)(ac)(ii) was approved by the Ld. CIT(E) on the same date, with no adverse findings on its charitable nature or genuineness of activities. Revenue's Contentions: - The Ld. DR vehemently supported the finding of the Ld. CIT(E).

Which sections of the Income-tax Act were involved?

Section 80G,Section 80G(5),Section 80G(5)(ii),Section 12A,Section 12A(1)(ac)(ii)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: WASEEM AHMED & SHRI SOUNDARARAJAN K.

For Respondent: Shri Somnath S Ukkali

PER WASEEM AHMED, ACCOUNTANT MEMBER: This appeal is filed by the Assessee against the order of Ld. CIT(EXEMPTIONS) BANGALORE vide DIN: ITBA/EXM/F/EXM45/2025-26/1088073179(1) dated 29-Mar-2026 for the Assessment Year 2025-26.

2.

The effective issue raised by the assessee in the grounds of appeal is whether the Ld. CIT(E) was justified in rejecting the assessee’s application for approval/renewal u/s 80G of the Act merely on the ground that the assessee had not furnished evidence of approval u/s 80G of the Act prior to 01.04.2021, despite the assessee having an existing approval for A.Ys. 2022- 23 to 2026-27 and the present application being filed for renewal thereof.

3.

The necessary facts are that the assessee, KHP Foundation, is a charitable institution. It had obtained approval u/s 80G of the Act for A.Ys. 2022-23 to 2026-27 vide order dated 30.11.2023. Since the said approval was due to expire, the assessee filed Form No. 10AB on 27.09.2025 seeking continuation/renewal of approval u/s 80G(5)(ii) of the Act.

3.1 The Ld. CIT(E) observed that the assessee had earlier obtained approval in Form No. 10AC under clause 80G(5)(i) of the Act for A.Ys. 2022-23 to 2026-27. According to the Ld. CIT(E), approval u/s 80G of the Act prior to 01.04.2021 was a prerequisite for obtaining approval under clause 80G(5)(i) of the Act. The Ld. CIT(E) also noted that, though the assessee stated that copies of registration u/s 12A and approval u/s 80G were enclosed, no approval order u/s 80G of the Act prior to 01.04.2021 was found on record. It was further observed that such approval was neither attached with the earlier Form No. 10A nor with the present Form No. 10AB or the submissions filed by the assessee. On this basis, the Ld. CIT(E) held that the assessee was not eligible for renewal of approval and rejected the application.

4.

Being aggrieved by the order of the Ld. CIT(E), the assessee is in appeal before us and filed a paper book running from pages 1 to 58.

4.1 Before us, the Ld. AR for the assessee submitted that the Ld. CIT(E) had proceeded on an incorrect understanding of section 80G(5) of the Act. It was submitted that there is no requirement under clause (ii) of the first proviso to section 80G(5) of the Act that an assessee seeking renewal of an existing approval must also establish that it had approval prior to 01.04.2021. The Ld. AR explained that clause (i) applies to institutions which were already approved under the provisions existing immediately before 01.04.2021, whereas clause (ii) applies to an institution whose existing approval is going to expire. It was submitted that the assessee had a valid approval u/s 80G of the Act up to A.Y. 2026-27 and had filed the present application on 27.09.2025 before expiry of the existing approval. Therefore, the application was required to be considered under clause (ii) and not by applying the condition relating to approval prior to 01.04.2021.

4.2 The Ld. AR further submitted that the assessee's application u/s 12A(1)(ac)(ii) of the Act was approved by the Ld. CIT(E) vide order dated 29.03.2026 for A.Ys. 2026-27 to 2030-31. There was no adverse finding regarding the charitable nature of the assessee or the genuineness of its activities. Therefore, rejection of the application u/s 80G of the Act merely for want of an approval prior to 01.04.2021 was not justified.

5.

The learned DR, on the contrary, vehemently supported the finding of the Ld. CIT(E).

6.

We have heard the rival submissions of both the parties and perused the materials available on record. The limited issue before us is whether the application filed by the assessee for continuation of approval u/s 80G(5)(ii) of the Act could be rejected only because the assessee did not have, or could not produce, an approval u/s 80G of the Act which existed prior to 01.04.2021. It is an admitted fact that the assessee was already granted approval u/s 80G of the Act for A.Ys. 2022-23 to 2026-27. It is also not disputed that the assessee filed Form No. 10AB on 27.09.2025 seeking continuation of the said approval. Thus, on the date of filing of the application, the assessee was holding a valid approval u/s 80G of the Act.

6.1 In our considered view, the Ld. CIT(E) has mixed up the requirements of clause (i) and clause (ii) of the first proviso to section 80G(5) of the Act. Clause (i) deals with institutions which were already approved under the provisions existing immediately before 01.04.2021. Clause (ii), however, deals with an institution whose existing approval is going to expire and which seeks continuation of such approval. The assessee's application admittedly falls under clause (ii). Therefore, once the assessee had an existing approval u/s 80G of the Act for A.Ys. 2022-23 to 2026-27 and had filed an application for its continuation within the prescribed period, the absence of an approval prior to 01.04.2021 could not, by itself, be treated as a ground for rejecting the application. The requirement relating to approval prior to 01.04.2021 cannot be imported into an application filed under clause (ii).

6.2 We also note that the impugned order does not contain any adverse finding regarding the charitable objects of the assessee or the genuineness of its activities. In fact, the assessee's application for registration u/s 12A(1)(ac)(ii) of the Act was approved by the Ld. CIT(E) on the very same date for A.Ys. 2026-27 to 2030-31. Thus, the rejection of the present application is based only on the absence of approval prior to 01.04.2021.

6.3 In view of the above, we are unable to sustain the order of the Ld. CIT(E). The requirement relied upon by the Ld. CIT(E) was not relevant for deciding the assessee's application filed u/s 80G(5)(ii) of the Act. Accordingly, we set aside the impugned order and restore the application to the file of the Ld. CIT(E). The Ld. CIT(E) is directed to consider the assessee's application afresh under the provisions applicable to continuation of an existing approval u/s 80G(5)(ii) of the Act, without insisting upon production of an approval u/s 80G of the Act prior to 01.04.2021. The application shall be decided on merits in accordance with law after giving reasonable opportunity of hearing to the assessee. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.

7.

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

Order pronounced in the open court on 7th October, 2026

Sd/- Sd/- SOUNDARARAJAN K. WASEEM AHMED JUDICIAL MEMBER ACCOUNTANT MEMBER Bangalore Dated: 7th October, 2026 Vms Copy to: HP FOUNDATION, NO.15, 2ND PHRASE, PEENYA 1 INDUSTRIAL AREA, BENGALURU-560058, KARNATAKA COMMISSIONER OF INCOME TAX (EXEMPTIONS), 2 COMMISSIONER OF INCOME TAX (EXEMPTIONS), BENGALURU-560027, KARNATAKA 3 THE PCIT / CIT, 4 THE D.R., ITAT, BANGALORE BENCH 5 GUARD FILE

By Order

ASSISTANT REGISTRAR / I.T.A.T., BANGALORE

Digitally signed P G by P G RAJANI Date: RAJANI 2026.10.22 15:54:00 +05'30'

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