TIH FOUNDATION FOR IOT AND IOE,POWAI vs. CIT (EXEMPTIONS), MUMBAI, MUMBAI
Before: SHRI SAKTIJIT DEY, VP & SHRI PRABHASH SHANKAR, AM TIH Foundation For IOT & IOE 3rd Floor, IITB Monash Research Academy, IITB Bombay Campus, A S Marg, Powai, Mumbai – 400 076 Vs. CIT(Exemptions) Room No. 601, Cumballa Hill MTNL TE Building, Pedder Road Dr. Gopalrao Deshmukh Marg, Cumballa Hill, Mumabi-400 026 PAN/GIR No. AAICT 0857 F (Appellant) : (Respondent)
Per Saktijit Dey, VP:
This is an appeal by the assessee against order dated 19.12.2024, passed by learned
Commissioner of Income Tax (Exemptions), Mumbai (‘ld.CIT(E) for short), rejecting assessee’s application seeking approval u/s. 80G of the Income Tax Act, 1961 (‘the Act’
for short).
We have considered rival submissions and perused the materials on record. Facts on record reveal that the assessee was incorporated as a Company u/s. 8 of the Companies Act, 2013 on 25.08.2020 with the primary object of promoting Technology Research and Development under Central Government grants and mission. The assessee was set up under the Aegis of Indian Institute of Technology, Bombay in terms with the direction of the Ministry of Science and Technology and funded by grant sanction under (National Mission
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TIH Foundation For IOT and IOE vs. CIT(Exemptions) on Interdisciplinary Cyber-Physical Systems (NM-ICPS) scheme) of the Central
Government. Being a Company registered u/s. 8 of the Companies Act, 2013, the assessee applied for registration u/s. 12AA as well as approval u/s. 80G of the Act. While verifying the applications filed by the assessee, the competent authority found that as per the objects, the assessee may incur expenses abroad for running the trust, which contravenes the provisions of section 11 of the Act. Accordingly, assessee’s application seeking registration was rejected by the competent authority. Expressing identical view, even the application seeking approval u/s. 80G of the Act was also rejected.
Against the aforesaid rejection order, the assessee has filed the present appeal. In the meanwhile, the appeal filed by the assessee challenging the rejection of application of registration u/s. 12AA of the Act came up for consideration before the co-ordinate bench on 03.07.2025. While deciding the appeal in ITA No. 2904/Mum/2025, the Tribunal in order dated 10.07.2025 had directed the competent authority to grant registration u/s. 12AB of the Act to the assessee with the following observations: 9. We have carefully considered the rival submissions and perused the material available on record. It is an undisputed fact that the assessee is a not-for-profit company incorporated under Section 8 of the Companies Act, 2013, established pursuant to the directions of the Ministry of Science and Technology, Government of India, and hosted by IIT Bombay. The assessee has been granted registration under Section 12AB of the Act for earlier assessment years, ie, A.Y. 2021-22 to AY 2025-26, and the present application was filed for continuation of registration. The only basis for rejection of registration by the Id. CIT(E) is the possibility of the assessee incurring expenditure outside India in furtherance of its objects, which, according to the Ld. CIT(E), contravenes the provisions of Section 11 of the Act. However, such reasoning does not find support either in the statutory scheme of Section 12AB or in judicial precedents. In this regard, the Hon'ble Delhi High Court in the case of N.K. Nambyar Saarf Law Charitable Trust (supra) has categorically held that the scope of Section 12AA (now Section 12AB) is limited to examining the genuineness of activities and the objects of the trust, and not the place of application of income. The Hon'ble Court observed that the fact that the trust may apply income outside India does not constitute a valid ground for denial of registration, since Section 11 itself provides a framework for allowing or disallowing exemption based on application of income in or outside India. Thus, this objection, being premature and irrelevant at the stage of registration, cannot be sustained.
Similarly, the Coordinate Bench of the ITAT, Mumbai in Dedhia Music Foundation (supra) has held that the mere existence of an object permitting application of income outside India does not amount to a "specified violation" under Explanation to Section 12AB(4) of the Act. The Tribunal
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The objects of the assessee are in line with the mission of the Central Government under the NM-
ICPS initiative, and the activities are genuine and aimed at technological development in public interest. In view of the foregoing legal position and judicial precedents, we find the order passed by the Ld. CIT(E) to be unsustainable in law.
The aforesaid observations of the co-ordinate bench squarely apply to the facts of the present appeal. Thus, in view of the aforesaid, we set aside the impugned order of ld. CIT(E) and direct him to grant approval u/s. 80G of the Act to the assessee. At this stage, we must make it clear, the competent authority retains the power to review the approval granted in case of violation of any conditions prescribed u/s. 80G of the Act.
In the result, the appeal is allowed. Order pronounced in the open court on 22.07.2025 (Prabhash Shankar) (Saktijit Dey) Accountant Member Vice President Mumbai; Dated : 22.07.2025 Roshani, Sr. PS
Copy of the Order forwarded to :
The Appellant 2. The Respondent 3. The CIT(A) 4. CIT - concerned 5. DR, ITAT, Mumbai 6. Guard File BY ORDER,
(Dy./Asstt.