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Facts
The assessee, Jaiswal Youth Federation, applied for approval under Section 80G of the Income-tax Act. The CIT(E) rejected the application, observing that the assessee's Memorandum of Association (MOA) allowed for the receipt and spending of funds outside India, which was deemed a violation of Section 11 of the Act. The assessee contested this rejection, raising issues of procedural fairness and the rejection of a similar Section 12AB registration application.
Held
The Tribunal noted that the assessee's application for registration under Section 12AB was also rejected for identical reasons, and that matter had been restored to the CIT(E) by a coordinate bench for a fresh decision. Following this precedent, the Tribunal restored the present appeal for Section 80G approval to the CIT(E), granting the assessee liberty to file an amended MOA/objects clause for fresh consideration.
Key Issues
Whether the CIT(E) was justified in rejecting the Section 80G approval application on the grounds that the assessee's MOA allowed for receipt/spending of funds outside India, allegedly violating Section 11, and whether sufficient opportunity of being heard was provided.
Sections Cited
80G, 11, 12AB
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Before: MS. KAVITHA RAJAGOPAL & SMT. RENU JAUHRI
स िवाई की िारीख / Date of Hearing 30.06.2025 घोर्णा की िारीख/Date of Pronouncement 30.06.2025 आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order of the Learned Commissioner of Income-tax (Exemptions), Mumbai [hereinafter referred to as “CIT(E)”] dated 25.12.2024, rejecting the approval u/s 80G of the Income-tax Act, 1961 [hereinafter referred to as “Act”].
A.Y. 2025-26 Jaiswal Youth Federation 2. The assessee has raised the following grounds of appeal:
1. Based on the facts and circumstances of the case, and in accordance with the law, the learned CIT (Exemptions), Mumbai wrongly interpreted the ancillary object clause that appellant intends to receive/spend funds outside India hence the same is in violation of the provisions of section 11, and rejected the application, which is not justified.
2. Based on the facts and circumstances of the case, and in accordance with the law, the learned CIT (Exemptions), Mumbai was not justified in giving only 5 days' time in final SCN dt. 12/12/2024, thereby denying the appellant sufficient opportunity of being heard, hence, violated the principal of natural justice.
3. Based on the facts and circumstances of the case, and in accordance with the law, the learned CIT (Exemptions), Mumbai erred in not giving sufficient opportunity as the appellant was unaware of the final SCN issued on 12/12/2024 and rejected the application in a hurried manner.
4. Based on the facts and circumstances of the case, and in accordance with the law, the learned CIT (Exemptions), Mumbai failed to consider the documents already filed, which proved the charitable activities carried on and rejected the application on technical grounds of non-submission of details/documents asked for.
5. Based on the facts and circumstances of the case, and in accordance with the law, the appellant contends that the rejection of the 12A application by the CIT (Exemptions), Mumbai was procedurally flawed, as it was carried out hastily, with misinterpretation of the object clause and without providing sufficient opportunity for representation. Consequently, the rejection of the 80G application, based on the absence of 12A registration, is unjustified. The appellant seeks a fair review of both applications, ensuring adherence to the principles of natural justice and procedural propriety.
6. Based on the facts and circumstances of the case, and in accordance with the law, the learned CIT (Exemptions), Mumbai was not justified in denying the registration ignoring the fact that the appellant is a section 8 company and involved in charitable activities, as proved from the documents already filed.
3. Brief facts of the case are that the assessee filed an application in Form 10AB on 12.06.2024 requesting for approval u/s 80G of the Act. The assessee filed information in response to the notice issued by Ld. CIT(E) on 05.11.2024, wherefrom the Ld. CIT(E) noted that the MOA provides for application/receipt A.Y. 2025-26 Jaiswal Youth Federation of funds outside India under the objects clause 3(b)(2). He therefore held that the objects of the assessee are in violation of the provisions of Section 11 of the Act, and accordingly, the application was rejected vide order dated 25.12.2024. Aggrieved with the order of Ld. CIT(E), the assessee has preferred an appeal before the Tribunal.
Before us, Ld. AR has submitted that the assessee company is a Section 8 registered company, which is involved in genuine charitable activities. He has also submitted that for the same reasons, the assessee’s application for registration u/s 12AB was also rejected, against which the assessee’s appeal was heard by the coordinate bench. He has further submitted that the proposed modification of the object clauses is underway.
We have heard the rival submissions and perused the material placed before us. It is seen that the assessee’s application for registration u/s 12AB of the Act was also rejected for identical reasons. The assessee’s appeal against the rejection order u/s 12AB has been decided vide the coordinate bench’s order dated 25.05.2025, whereby the matter has been restored to the Ld. CIT(E) for a fresh decision after giving sufficient opportunity to the assessee and liberty to it to file the amended MOA/objects clause. Accordingly, the present appeal is also restored to the Ld. CIT(E) for a fresh decision after giving due opportunity to the assessee. The assessee is at liberty to file the amended MOA/objects clause A.Y. 2025-26 Jaiswal Youth Federation before the Ld. CIT(E), which should be taken into account while deciding the application.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 30.06.2025.