RADICAL AND EMERGING APPROCHES FOR DEVELOPMENT FOUNDATION,JAIPUR vs. CIT (EXEMPTION), JAIPUR, JAIPUR

PDF · subscribers
ITA 1896/JPR/2026Status: DisposedITAT Jaipur13 October 20266 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the assessee's application was filed under section 12A(1)(ac)(vi)-Item B. The Tribunal noted that the word 'excluded' in this section means 'actually allowed by the Department', not merely claimed. Since the CPC disallowed the claim for AY 2024-25 and the assessee paid the full tax, no income was excluded. The Tribunal considered the possibility that the application should have been filed under Section 12A(1)(ac)(i) but stated that mentioning a wrong clause in Form 10AB is a procedural irregularity and a curable defect. The Tribunal cited numerous ITAT decisions holding that the CIT(E) should not reject an application solely on the ground of a wrong clause but should treat it under the appropriate clause and decide on merits. The Tribunal found that Section 12A(1)(ac)(i) deals with trusts seeking re-registration under the old law, while sub-clause (vi)-Item B is a residuary provision for cases where activities have commenced but exemption has never been availed. The Tribunal concluded that the twin conditions of Section 12A(1)(ac)(vi)-Item B were satisfied. The CIT(E) had not doubted the charitable objects or activities. Therefore, the rejection on a technical ground was unsustainable. As 12AB registration is a pre-condition for 80G approval, the rejection of 80G was also consequential. The Tribunal set aside the matter to the CIT(E) with a direction to treat Form 10AB as maintainable under Section 12A(1)(ac)(vi)-Item B and pass orders granting registration under section 12AB and 80G.

What were the facts?

The assessee, Radical and Emerging Approaches for Development Foundation, filed an application in Form 10AB on December 13, 2025, seeking registration under section 12A(1)(ac)(iv)(B) and approval under section 80G of the Income Tax Act, 1961. The assessee was previously registered under section 12AA. The Commissioner of Income Tax (Exemption), Jaipur, issued a questionnaire, to which the assessee replied on June 22, 2026. The CIT(E) rejected the application, finding it was filed under an incorrect statutory provision, specifically section 12A(1)(ac)(iv)(B) instead of section 12A(1)(ac)(i). The CIT(E) passed orders dated June 25, 2026, denying registration. The assessee appealed these orders.

What were the issues?

1. Whether the Ld. CIT(Exemption) erred in rejecting the application under section 12A(1)(ac)(vi)-Item B of the Income Tax Act, 1961, and whether registration should be granted? (Question of law and fact, concerning Section 12A(1)(ac)(vi)-Item B). 2. Whether the rejection order by the Ld. CIT(Exemption) is against the principles of natural justice, and if it should be quashed? (Question of law, concerning principles of natural justice). Assessee's Contentions: The Ld. Counsel argued that the CIT(E) issued a show cause notice on June 16, 2026, and the assessee replied on June 22, 2026. Without considering the submissions, the CIT(E) passed the impugned orders. The matter should be set aside to the CIT(E) for fresh consideration. The assessee also contended that it is a Section 8 Company engaged in charitable activities, had prior registration under the old section 12A, and did not avail the benefit of Section 11 for Assessment Years 2021-22, 2022-23, 2023-24, and 2025-26. For AY 2024-25, the CPC disallowed the Section 11 exemption, and the assessee deposited the full tax, thus fulfilling the twin conditions of Section 12A(1)(ac)(vi)-Item B. Mentioning a wrong clause is a procedural irregularity and curable. Revenue's Contentions: The Ld. CIT-DR supported the CIT(E)'s order, arguing that the assessee filed the application under a wrongful statutory provision, making the appeal liable for dismissal.

Which sections of the Income-tax Act were involved?

Section 12A,Section 12AA,Section 12AB,Section 80G,Section 10(23C),Section 11,Section 12

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH, JAIPUR

Before: Smt. Annapurna Gupta & Shri T. R. Senthil Kumar

For Appellant: Shri R. S. Poonia, CA
For Respondent: Shri Sharwan Kumar

आदेश/ORDER

PER : T. R. SENTHIL KUMAR, JUDICIAL MEMBER:- These two appeals are filed by the assessee as against separate orders both dated 25.06.2026 passed by Ld. Commissioner of Income Tax (Exemption), Jaipur, denying the registration u/s. 12AB and 80G(5) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).

2.

Brief facts of the case are that the assessee is a Trust registered u/s. 12AA of the Act dated 12.03.2021 with objective of carrying out

I.T.A No. 1892 & 1896/JPR/2026 Page No 2 Radical and Emerging Approaches for Development Foundation

charitable activities. The assessee filed an application in Form 10AB on 13.12.2025 before Ld. CIT(E), Jaipur, seeking registration u/s. 12A(1)(ac)(iv)(B) and approval u/s. 80G of the Income-tax Act. The Ld. CIT(E) issued a questionnaire on 16.06.2025 which was replied by the assessee on 22.06.2026 explaining the entitlement to apply for registration u/s. 12A(1)(ac)(iv)(B) of the Act. Ld. CIT(E) after examining the explanation given by the assessee found not tenable as the application is filed under an incorrect statutory provision i.e. section 12A(1)(ac)(iv)(B) instead of section 12A(1)(ac)(i) and rejected the registration application as being filed in wrong clause.

3.

Aggrieved by the said rejection orders, the assessee preferred further appeal before us raising the following Grounds of Appeal:-

1.

That under the facts and circumstances of the case the Ld. CIT (Exemption), Jaipur has erred in rejecting the application u/s 12A(1)(ac)(vi)-Item B of the Income Tax Act 1961, Kindly direct to grant the registration. 2. That under the facts and circumstances the rejection made by Ld. CIT (Exemption), Jaipur is against the principles of natural justice. Kindly quash the order. 3. That the appellant craves permission to add or to amend any of the above grounds of appeal or to withdraw any of them..

4.

At the outset, Ld. Counsel appearing on behalf of the assessee submitted that Ld. CIT(E) issued a show cause notice dated 16.06.2026 which was replied by the assessee on 22.06.2026. Without considering the above submissions, Ld. CIT(E) passed the impugned orders on 25.06.2026 and rejected the claim of assessee’s registration. Therefore, the matter may be set aside back to the file of Ld. CIT(E) to look into the details filed before him and pass fresh orders of registration.

I.T.A No. 1892 & 1896/JPR/2026 Page No 3 Radical and Emerging Approaches for Development Foundation

5.

Per contra, Ld. CIT-DR appearing for the Revenue supported the order passed by the Ld. CIT(E) and submitted that assessee has filed application for seeking registration under wrongful statutory provision, thereby appeal is liable to be dismissed.

6.

Heard the rival submissions and perused the materials available on record including the Paper Book filed by the assessee. It is an undisputed fact that the assessee filed Form 10AB for permanent registration.

6.1. The assessee has filed an affidavit stating as follows:-

“1. That assessee is a Section 8 Company and engaged in charitable activity.

2.

That assessee company got permanent registration u/s. 12A (i.e. under old Law) vide order dated 12.03.2021.

3.

That assessee-company didn't avail any benefit of Section 11 of the I.T. Act, 1961 till date except A.Y. 2024-25.

4.

That the complete chart showing ITR's filed by assessee-company and the benefit taken by assessee-company since incorporation is as follows:-

Sr. A.Y. ITR Section 11 benefit taken or not. No. Form 1 2021-22 ITR-6 Not Taken 2 2022-23 ITR-6 Not Taken 3 2023-24 ITR-6 Not Taken 4 2024-25 ITR-7 Section 11 benefit taken and benefit disallowed by CPC & demand raised by CPC and complete tax was deposited by assessee- company. So, No benefit of Section 11 was taken. 5 2025-26 ITR-6 Not Taken

5.

(i). During the A.Y. 2024-25, assessee-company claimed exemption u/s. 11, but CPC denied the same.

(ii). Assessee-company didn't file any an appeal against the demand & deposited the tax accordingly.

I.T.A No. 1892 & 1896/JPR/2026 Page No 4 Radical and Emerging Approaches for Development Foundation

(iii). Hence, assessee-company fulfilled twin conditions of Section 12A(1)(ac) (vi)- ITEM-B by not availed the benefit and commenced the activity.

6.

So, in view of the above, I confirm that assessee-company had not taken any benefit of Section 11 since incorporation as on the dated on which this present application on 13.12.2025 for registration u/s. 12A(1)(ac)(vi)-ITEM-B.”

6.2. The assessee has filed application u/s. 12A(1)(ac)(vi)-Item(B) which reads as under:-

"(B) commenced and no income or part thereof of the said trust or institution has been excluded from the total income on account of applicability of sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, or section 11 or section 12, for any previous year ending on or before the date of such application, at any time after the commencement of such activities, and such trust or institution is registered under section 12AB;"

6.3. The word "excluded" in Section 12A(1)(ac)(vi)(B) means actually allowed by the Department, not merely claimed in the return. Since CPC disallowed the claim for A.Y. 2024-25 and assessee paid full tax, it cannot be said that any income was excluded. Without prejudice, even if it is assumed that application should have been filed under Section 12A(1)(ac)(i), mentioning a wrong clause in Form 10AB is only a procedural irregularity and curable defect. The Hon'ble ITAT in large number of cases has held that CIT(E) should not reject application merely on the ground of wrong clause, but should treat it under appropriate clause and decide on merits.

6.4. We find that Section 12A(1)(ac)(i) deals with trusts already registered under old 12A/12AA and seeking re-registration within 3 months. Sub-clause (vi)-Item(B) is a residuary provision for cases where activities have commenced but exemption has never been availed, and the entity has provisional registration u/s 12AB.

I.T.A No. 1892 & 1896/JPR/2026 Page No 5 Radical and Emerging Approaches for Development Foundation

Therefore, in our view, twin conditions of Section 12A(1)(ac)(vi)-Item(B) are satisfied.

6.5. We also note that ld. CIT(E) has not doubted the charitable nature of objects nor recorded any finding that activities are non- genuine or not in accordance with objects. The rejection is purely on technical ground of wrong clause, which we hold as unsustainable in light of above discussion. Since 12AB registration is a pre-condition for 80G approval, and the rejection of 80G is consequential, the same also needs to be set aside. In the interest of Principle of Natural Justice, we deem it fit to set aside the matter back to the file of Ld. CIT(E) with a direction to treat the Form 10AB maintainable under Section 12A(1)(ac)(vi)-Item(B) and then pass orders granting registration u/s. 12AB and 80G of the Act, as per the provisions of law.

7.

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

Order pronounced in the open court on 13-10-2026

Sd/- Sd/- (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated 13/10/2026 Dhananjay K., Sr. PS आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT

I.T.A No. 1892 & 1896/JPR/2026 Page No 6 Radical and Emerging Approaches for Development Foundation 6. Guard file. By order/आदेश से, सहायक पंजीकार आयकर अपील�य अ�धकरण, जयपुर

More judgments on Section 12A

All 6,064 judgments and leading authorities on Section 12A →

Recent GST High Court judgments

Search GST case law →