M/S. LIKEMINDED EDUCATION AND WELFARE SOCIETY ,MUMBAI vs COMMISSIONER OF INCOME TAX (EXEMPTION), MUMBAI

Before: SHRI SANDEEP GOSAIN & SHRI PRABHASH SHANKAR

For Respondent: Dr. Gopalrao Deshmukh Marg, Shri Jagdish Shetty, AR, Shri Rajesh Kumar Yadav (CIT-DR)

Pronounced: 11.06.2025

ORDER \nPER PRABHASH SHANKAR [A.M.] :-\nThe above captioned appeals have been filed by the assessee Trust\nagainst two separate orders as passed by the Learned Commissioner of\nIncome-tax (Exemptions), Mumbai [hereinafter referred to as “CIT(E)”]\npertaining to order passed u/s.12AB/80G of the Income-tax Act, 1961\n[hereinafter referred to as “Act”] dated 20.02.2025. Since the issues\ninvolved are interlinked and also the fact that both appeals were heard\ntogether, they are being taken up together for adjudication vide this\ncomposite order for the sake of brevity.\nPage | 2\nITA No. 2647, 2648/Mum/2025\nM/s Likeminded Education and Welfare Society\n2. We take up first. The grounds\nof appeal are as under:-\n(1)\nIncorrect Invocation of the provisions of Section 11 of The Income Tax\nAct, 1961:\nOn the basis of facts and circumstances of the case, the Learned\nCommissioner of Income Tax (Exemptions), Mumbai [Hereinafter\nreferred to as “CIT(Exemptions)”] erred in confirming rejection of\nregistration citing the violation of Provisions of Section 11 of The Income\nTax Act, 1961 without considering the fact that your appellant has not\napplied any of its income outside India till date which is adequately and\nduly supported by documentary evidences submitted to the office of the\nLrnd. CIT(Exemptions).\nFurther, Learned CIT(Exemptions) has erred in invoking the provisions\nof Section 11(1)(c) of The Income Tax Act, 1961 merely on the ground that\nthe MOA and Rules & Regulations provide for the application of Income\noutside India thereby misinterpreting the said section without\nunderstanding the difference between “Actual Application” outside India\nand “Providing for Application” of funds outside India.\nOn the basis of the facts and circumstances of the case, the Learned CIT\n(Exemptions) has erred in law and on facts by misinterpreting the\nprovisions of Section 11 of the Income Tax Act, 1961, in as much as the\nsaid provisions pertain to the denial of exemption to the extent of actual\napplication of income outside India, and not to the denial of registration\nunder Section 12A of the Act.\n(2)\nOn the basis of facts and the circumstances of the case, the Learned CIT\n(Exemptions) erred in failing to appreciate & consider the unforeseen\nmedical circumstances that led to the delay in filing Form 10AB which\nwere explained before the Lrnd. CIT(Exemptions) during the course of\nproceedings.\n(3)\nOn the basis of the facts and circumstances of the case, the Learned\nCommissioner of Income Tax (Exemptions) has erred in failing to\nappreciate that the appellant is a genuine charitable organization, and\nthat the denial of registration would consequently deprive the appellant\nof eligible exemptions under the Act, thereby adversely impacting its\nability to carry out its objectives of social and public welfare merely on\naccount of some procedural lapse due to unforeseen and uncontrollable\ncircumstances.\n3. Brief facts of the case are that the assessee is a registered Public\nCharitable Society under the Societies Registration Act, 1860 and under\nPage | 3\nITA No. 2647, 2648/Mum/2025\nM/s Likeminded Education and Welfare Society\nMaharashtra Public Trust Act, 1950 incorporated on 30th of May,\n2023.It is claimed that it is incorporated with the main objective of\nserving the community at large through the conduct of Social and\nCharitable activities, to facilitate financial assistance and aid to the\nchildren belonging to the underprivileged and weaker sections of the\nsociety particularly for educational and medical purpose and other social\nand cultural activities. It had filed for application of Provisional\nRegistration under Sub Clause (iii) of Clause (ac) of sub-section (1) of\nSection 12A of the Act, vide Form 10A dated 17th July, 2023 and it was\ngranted provisional registration under Section 12A vide order for\nProvisional approval in Form 10AC dated 24th July, 2023.\n4.\nThe ld.CIT(E) on verification of the application for final\napproval for registration in Form 10AB found that the application was\nnot complete, and all the documents required to be accompanying the\napplication were not furnished. Hence, a notice was issued to it\nrequesting to furnish the complete set of documents mentioned in Rule\n17A(2). After a careful perusal of the submissions made, it was noticed\nby him from the trust deed/MOA that as per point 3(iii) and 3(vii) of the\nobjects of the trust deed/MoA, that the applicant intended to apply fund\noutside India which is inviolation of section 11 of the Act. The objects of\nthe trust deed/MOAare reproduced below for reference:\nPage | 4\nITA No. 2647, 2648/Mum/2025\nM/s Likeminded Education and Welfare Society\n• 3(iii): To obtain affiliation with various universities and\ninstitutes, whether in India or abroad.....\n• 3(vii): To assist deserving students in availing overseas\neducation including provision of overseas travelling expenses,\nboarding and lodging expenses, fees and other expenses in\nconnection with the overseas education of such students.\n4.1\nFurther, the Trust filed application in Form 10AB for\nregularization of provisional registration order u/s 12A on 26.08.2024.\nThe trust has obtained provisional approval in Form 10AC dated\n24.07.2023 valid upto AY 2026-27. As per section 12A(1)(ac) (iii) of the\nAct:\n“where the trust or institution has been provisionally registered under\nsection 12AB, at least six months prior to expiry of period of the provisional\nregistration or within six months of commencement of its activities,\nwhichever is earlier;\n4.2\nIt was observed by the ld.CIT( E) that as per above\nprovisions, for provisionally registered trust, an application in Form\n10AB for regularization should be filed within six months of start of\nactivities_which was February, 2024. However, the Trust had filed\napplication in Form 10AB for regularization of provisional registration\norder u/s 12A on 05.08.2024 which is not valid as per the above\nprovisions. Accordingly, a show cause notice was issued to the applicant\nand explanations were called for regarding the above-mentioned\nviolations. Additionally, information regarding proof of expenses, proof\nPage | 5\nITA No. 2647, 2648/Mum/2025\nM/s Likeminded Education and Welfare Society\nof activities, copy of bank statements etc were called for vide the same\nnotice dated 06.02.2025.\n4.3\nThe applicant in response to the delay in filing Form 10АВ,\nthe applicant had admitted that the Trust must apply for regular\nregistration at least six months before the expiry of the provisional\nregistration or within six months of commencement of activities,\nwhichever is earlier. The applicant has stated that due to unforeseen\nmedical circumstances of the trustee, it was unable to submit the\napplication within the required timeframe. The applicant has also\nrequested for condonation of delay in filing form 10AB for grant of\ncertificate u/s 12A.\n4.4\nThe ld.CIT( E) further that the due date of filing application\non or before 30.06.2024 as per the said circular was an extension\nprovided by the Board to all the Trust/Institution to file/re-file their\napplications under certain conditions. However, the applicant was not\nable to show any reasonable cause, for delay or to establish that the\napplicant trust had genuine hardship in filing of the application within\nthe due date. In absence of a reasonable cause of delay the request of the\napplicant to condone the delay was not acceptable.\n4.5\nRegarding the issue of violation of provisions of section 11\nof the Act the applicant trust had stated that the trust had neither\nPage | 6\nITA No. 2647, 2648/Mum/2025\nM/s Likeminded Education and Welfare Society\nengaged in applying any funds outside India nor has received any funds\nfrom abroad which can be evidenced from the details of sources of funds\nand applications of funds submitted alongwith supporting documents. It\nfurther stated that it will amend the clauses in the MOA which are in\nviolation of provisions of section 11 of the Act.However, it has neither\nsubmitted/presented resolution passed by trust nor submitted any proof\nthat it has applied for amendment in MOA before the MCA.\n4.6\nThus, the application for regularization of provisional\napproval in Form 10AB filed by the assessee was not allowed on the\nground of late filing of application and violation of provisions of section 11 of\nthe Act.\n5.\nIn the course of hearing before us, the ld.AR has submitted\nthat the assessee is a Public Charitable Society incorporated with the\nmain objective of serving the community at large through the conduct of\nSocial and Charitable activities with the vision to facilitate financial\nassistance and aid to the children belonging to the underprivileged and\nweaker sections of the society particularly for educational and medical\npurpose and other social and cultural activities. After obtaining\nprovisional registration under Section 12A vide Order for Provisional\napproval in Form 10AC dated 24th July, 2023, it commenced its\nactivities towards the objectives of the Society. Further, it then filed an\napplication for Final registration in accordance with Sub Clause (iii) of\nPage | 7\nITA No. 2647, 2648/Mum/2025\nM/s Likeminded Education and Welfare Society\nClause (ac) of sub-section (1) of Section 12A in Form 10AB\ndated 26th August, 2024.\n5.1\nIn response to various notices issued by the CIT(E) due\ncompliance was made. Surprisingly, the assessee was in receipt of\nrejection order dated 20th February 2025 in Form 10AD rejecting the\napplication made for registration under Section 124(1)(ac)(iii) of the Act,\nciting the following reasons:\n\"Thus, the application for regularization of provisional approval in Form\n10AB filed by the assessee is not allowable on the ground of late filing of\napplication and violation of provisions of section 11 of the Act\".\n5.2\nIt is contented by the ld.AR that evident that the assessee\nmade all the submissions, details and explanations in respect of\nregistration under Section 12A of the Act, within the prescribed due\ndate. The Ld.CIT(E) passed the rejection order without consideration of\nthe details, documents and explanations submitted by the Trust within\nthe prescribed due dates.\n5.3\nIn so far as the reasons for rejection of registration and\ninvoking the provisions of Section 11 of the Act is concerned, it is\nsubmitted that the Ld.CIT(E) has erred in rejecting the application for\nregistration under Section 12A of the Act, by invoking the provisions of\nSection 11 of the Act due to the following reasons:\nPage | 8\nITA No. 2647, 2648/Mum/2025\nM/s Likeminded Education and Welfare Society\ni.\nThe assessee has applied its income in India by way of carrying\nout charitable activities which align with its objectives such as\nproviding educational assistance to the weaker sections of the\nSociety and medical assistance. The said fact is established by\nway of documentary evidences submitted to the office of the\nLrnd. CIT(Exemptions); however, the same have been\nsummarily disregarded while concluding the proceedings\nii.\nThe ld. CIT(Exemptions) has erred in misinterpreting the\nprovisions of Section 11(1)(c) of the Act. It is pertinent to note\nthat the provisions of Section 11(1)(c) of Act focuses on denial\nof exemption under Section 11 of the Act in case of application\nof funds outside India and not the denial of registration under\nSection 12A of The Income Tax Act, 1961.\niii.\nFurther, if there is a clause in the trust deed which provides for\nactivities outside India, it would not dis-entitle the\norganization from claiming exemption. The provisions of\nsection 11(1)(c) are attracted only if actual expenditure is\nincurred outside India. Section 11(1)(c) cannot be invoked only\non the ground that the constitutional documents provides for\nactivities outside India.\nPage | 9\nITA No. 2647, 2648/Mum/2025\nM/s Likeminded Education and Welfare Society\n5.4\nIt is further pleaded that the constitutional documents of any\nentity contains various activities which are “General Clauses\" ideally\npreferred by the Society Registration authorities. It is a general practice\nand is a set format followed for society registration; it does not\nnecessarily imply actual activities and therefore, the denial of\nregistration on this ground is absolutely baseless and not as per law. The\nLd. CIT(E) has erred in differentiating between \"Actual Application of\nfunds outside India and \"Providing for Application of Funds outside\nIndia. The MOA and rules and regulations of the society are its\nconstitutional documents which shall cover under its bandwidth all the\nactivities which are covered under \"Charitable objects\" under The\nMaharashtra Public Trust Act, 1950. There is no restriction under the\nsaid Act imposed on Trusts / Charitable Organisations and therefore,\nthe rejection cannot be merely based on the same.\n5.5\nIt is argued that the fact that the Society is not restricted from\napplying its funds outside India nor restricted to receive any fund from\nabroad under the Societies Registration Act, 1860, as also reflected in its\nMemorandum of Association, inclusion of this clause in the\nMemorandum solely does not lead to violation of the provisions of the\nAct. Further it is also evident from its financials that the Society has not\nindulged in any such transactions. As per section 11(1)(c) of the Act, the\nPage | 10\nITA No. 2647, 2648/Mum/2025\nM/s Likeminded Education and Welfare Society\nsociety is not allowed to apply its fund outside India and such\napplication is not allowed as deduction from its taxable Income. Thus it\nis proved that your appellant has not committed any violation as per\nSection 11(1)(c) of the Tax.\n5.6\nAs regard non-consideration of uncontrollable circumstances\nleading to procedural delays, it is submitted that due to unforeseen\nmedical circumstances of the applicant trustee an active member of the\nsociety), the assessee was unable to submit the application within the\nrequired time frame. The said delay was on account of circumstances\nbeyond the control of the Society. As a result, the application was\nsubmitted in August 2024. Therefore, by passing the rejection order, it is\nbeing penalized on account of unforeseen medical circumstances which\nare beyond its control. It is requested to consider the circumstances\nsurrounding and condone the delay.\n5.7\nIt is further stated that non-consideration of the explanations\nsubmitted by the appellant and issuing an adverse order without giving\nan opportunity of being heard is against the principle of Natural Justice\nand shall cause undue hardship to it. The delay in filing of application\nfor registration was on account of genuine medical reasons of the\nTrustee / President which was beyond its control. Denial of registration\nbased on the above reason shall cause genuine hardship to the assessee.\nPage | 11\nITA No. 2647, 2648/Mum/2025\nM/s Likeminded Education and Welfare Society\nFurther, the Trust is a genuine charitable organization which has\nactively undertaken social welfare activities since its incorporation and\ndenial of such registration it will affect its objectives carrying on of\ncharitable Activities i.e. educational aid, medical relief, providing relief\nto the poor, etc. Reliance is also placed on the case of M.K. Nambyar\nSaarf Law Charitable Trust vs Union Of India (Uoi) And Ors. on 28 May,\n2004wherein it was held that it is necessary for the Commissioner to\nexamine the purpose for satisfying himself that the activities are\ngenuine. It was open for him to make necessary enquiries in this behalf\nand to pass an order as per the procedure laid down under Section 12AA\nof the said Act. So far as income which is applied outside India is\nconcerned, is not a relevant criteria for rejecting the application.\n6.\nThe ld.CIT(DR) has supported the order of the ld.CIT(E)\nstating that the application for final registration was rightly rejected on\naccount of delay without any reasonable cause and also on the ground\nthat object clause of the Trust was violative of the prevalent provisions of\nthe Act in this regard.\n7.\nWe have carefully considered all the relevant facts of the case,\nperused the record, gone through provisions of the Act in this regard\nalso legal position on the issues involved. It is an admitted fact that the\napplication for final registration was delayed as pointed out by the\nPage | 12\nITA No. 2647, 2648/Mum/2025\nM/s Likeminded Education and Welfare Society\nld.CIT(E) though it is claimed that the delay was on account of certain\nmedical reasons attributed to the President although the claim is not\nsupported by any evidence brought on record.\n7.1\nIn so far as the object clause relating to activities outside\nIndia are concerned, we notice that the ld.CIT( E) has mentioned that\nthe assessee was agreeable to modifying the said clause so as to be in line\nwith existing law in this regard. However, the ld.AR has neither placed\nany record nor made any submission in this respect. Apparently, the\nclause remains unamended. It was observed that the use of such words\nin the MOA/trust deed clearly conveyed its intention to utilise fund\noutside India, thereby leaving open the possibility for future endeavours,\nwhich may involve expenditure outside the country. The applicant Trust\nought to have amended these clauses to align with the provisions of the\nAct. However, it has failed to do so. Thus, based on the reasons\nmentioned above, this application for registration u/s 12A was not\nallowable. In conclusion, the application for grant of registration was\nrejected. In this regard, the assessee submitted that though the perusal\nof accounts and other details indicates that the appellant trust has not\nincurred expenses outside India. It may be stated here that the\ncoordinate Bench in the case of Sila for Change Foundation v/s\nCIT(E), in ITA No. 4274/Mum/2024, dated 20.12.2024 on identical\nPage | 13\nITA No. 2647, 2648/Mum/2025\nM/s Likeminded Education and Welfare Society\nfacts after detailed analysis of the provisions of the Act and various\njudicial precedent granted liberty to the assessee to specify the\nmemorandum of the objects and file the application seeking final\nregistration before the competent authority which may be considered in\naccordance with law. We find it appropriate here to quote relevant paras\nof the above mentioned order for the sake of brevity as below:\n“2. The assessee was granted provisional registration on 01.10.2021 pursuant to\nfiling of application in Form 10AB u/s.12A(1)(ac)(iii) before the Ld.CIT(E). It is\nsubmitted that the assessee was formed with following objections:\n12. To provide support and other such developmental services to other\norganisations in India and outside India in the social sector.\n2.

Ld.CIT(E) observed that object clause no.12 of memorandum of association\nprovides support to other such development services to other organisation in India\nand outside India in the social sector. The Ld.CIT(E) was thus of the opinion that\nthe said object clause, violates section 11 of the Income Tax Act and therefore\nregistration u/s.12AB cannot be granted since the assessee has not established\ngenuniness of the activities. The Ld.CIT(E) also noted that, the assessee has not\nestablished whether this object is in compliance with any other law for the time\nbeing in force as are material for the purposes of achieving its objects. The\nLd.CIT(E) thus rejected the application seeking registration u/s.12AB vide\nimpugned order. As a consequences application seeking 80G registration was also\ndenied.\nAggrieved by the orders of the Ld.CIT(E), the assessee is in appeal before this\nTribunal.\n3.\nThe primary contentions of the Ld.AR was that, the assessee was granted\nprovisional registration in Form 10AC, and therefore the assessee may be granted\nregistration u/s.12AB of the Act. It is submitted that, subsequent to the\nprovisional registration granted to the assessee activities of the trust/institution\ncommenced and once Ld.CIT(E) is satisfied about activities undertaken by the\ntrust/institution were genuine and in consonance with the aims and objectives of\nthe trust/institution, the denial of registration u/s.12AB of the Act is bad in law.\nPage | 14\nITA No. 2647, 2648/Mum/2025\nM/s Likeminded Education and Welfare Society\n3.1.\nThe Ld.AR further submitted that, the activities of the trust/institution are\nbonafide and the assessee has not applied any income for activities outside\nIndia. He thus submitted that the genuineness therefore cannot be doubted.\n3.2.\nThe Ld.AR further submitted that, clause 12 of the memorandum of\nassociation is not meant to enable the assessee to carry out the charitable\nactivities outside India. He submitted that all that the clause states that the\nassessee can render support and coordinate with trust/institution outside India. In\nsupport he placed an example of a student if granted education loan for seeking\neducation outside India and the assessee paid tuition fees to a university outside\nIndia of such student, it cannot mean that the such amount is utilised to apply for\nother charitable activities outside India.\n3.3.\nOn the contrary the Ld.DR submitted that the objectin clause 12 clearly states\nthat, it would provide support and carry out such developmental activities to other\norganisations in India and outside India in the social sector. The Ld.DR\nsubmitted that, sub clause 3A of section 11 requires that, the activities must be\ncarried out in India. As clause 12 of the assessee is clearly in contravention to\nthe primary requirement u/s.11, the claim of exemption by the assessee is rightly\ndenied. He placed reliance on the decision of Hon'ble Amritsar Tribunal in case\nof Sh. Gurudwara Sahib Parbhandan Committee vs. Commissioner of Income-tax\n(Exemptions) reported in [2023] 150 taxmann.com 181 and on the decision of\nHigh Court of Orissa in case of Commissioner of Income-tax (Exemption) vs.\nOrissa Cricket Association reported in [2024] 161 taxmann. Com 588 (Orissa).\nHe submitted that, sub section 4 of section 12AB widened the scope of violations\nspecified under sub section 5.\n3.4.\nThe Ld.DR thus vehemently supported the impugned order and submitted that\nunless and until the Ld.CIT(E) is not satisfied about the objects of the\ntrust/institutions and the genuineness of its activities, registration u/s.\n12AB cannot be granted.\nWe have perused the submissions advanced by both sides in the light of the\nrecords placed before us.\n4.\nThe process of obtaining registration under section 12A has undergone\nchange that is detailed as under:\n1) Up to 31.03.2021 the registration/approval was permanent in nature.\n2) During the period from 01.04.2021 to 31.09.2023, this was the period of two\nstep registration i.e. first provisional and subsequently regular registration.\nPage | 15\nITA No. 2647, 2648/Mum/2025\nM/s Likeminded Education and Welfare Society\n3)\nAmended process w.e.f. 01.10.2023 where in only organizations who have not\nstarted any activity may apply for provisional registration and where the activity\nis commenced then direct application for five-year registration is permissible.\n4.1.\nIn the present facts of the case, the assessee, was incorporated on 28/07/2021\nand filed its application under section. Thus, the assessee falls under the new\nregime of registration process, seeking registration/approval from 01.04.2021 to\n30.09.2023, w.e.f. 01.04.2021 under section 12AB of the Act. The key features of\nregistration under the amended scheme from 01.04.2021 to 30.09.2023\nunder section 12AB are as under:\n(i)\nConcept of provisional registration introduced for charity institutions is\napplicable to all applying for the first time, irrespective of whether they are new\nor existing institutions.\n(ii)\nConcept of perpetuity of registration stands withdrawn under the new scheme\nand provisional registration is valid for a maximum period of 3 years. The\nprovisional registration is subsequently required to be regularized into five years\nregular registration within six months of commencement of activities or at least 6\nmonths before the expiry of the provisional registration period.\n(iii)\nAll the existing trusts or institutions which were registered under section\n12A/12AA or approved under section 10(23C) and section 80G are mandatorily\nrequired to obtain registration under new scheme of registration under section\n12AB or to obtain approval under section 10(23C) and section 80G. The\nregistration/approval shall remain valid for a period of five years from 1 April,\n2021 i.e. from the AY: 2022-23.\n(iv)\nRegistration/approval was subject to renewal every 5 years.\n4.2.\nThe assessee in the present facts of the case preferred application for the first\ntime post July 2021. Thus, as per section 12AB and Rule 17, the assessee is\nrequired to pass through following two stages:\n1) Firstly, the application is to be filed in Form 10A for provisional registration.\nThe assessee in the present facts filed Form 10A r.w. Rule 17, on 06/09/2022.\nBased on the application made, a provisional registration was issued to the\nassessee u/s.12AB effective from 01/10/2021.\n4.2.1.\nFor seeking Provisional Registration, apart from the documents and\ninformation required for filing application under Form 10A, no other information\nwill be sought for granting provisional registration.\nThe relevant provision of section 12AB is reproduced as under:\n(1)\nThe Principal Commissioner or Commissioner, on receipt of an application\nmade under clause (ac) of sub-section (1) of section 12A, shall,\nPage | 16\nITA No. 2647, 2648/Mum/2025\nM/s Likeminded Education and Welfare Society\n(a)... (b)...\n(c)\nwhere the application is made under sub-clause (vi) of the said clause, pass an\norder in writing provisionally registering the trust or institution for a period of\nthree years from the assessment year from which the registration is sought, 4.2.2.\nThus, it is apparent that, upon filing application in Form 10A (for Provisional\nregistration) the concerned Income-tax Authority (CIT or PCIT) has to issue\nprovisional registration certificate without any further verification or\nexamination.\n4.3.\nIn the second stage, this provisional registration is required to be converted\ninto regular registration. The application for conversion is to be filed in Form\n10AB at least 6 months before the expiry of the provisional registration period or\nwithin 6 months of the commencement of its activities, whichever is earlier. For\nConverting provisional registration into final registration, procedure is identical\nto what it was prevailing prior to 01.04.2021, under section 12AB(1)(b)(i). That\nis, the Ld.PCIT/CIT shall call for such documents or information or make such\ninquiries as he thinks necessary in order to satisfy himself about genuineness of\nthe activities of the trust or institution and the compliances of other laws.The\nrelevant provisions are as under:\n(1)\nThe Principal Commissioner or Commissioner, on receipt of an application\nmade under clause (ac) of sub-section (1) of section 12A, shall, --\na) where the application is made under sub-clause (i) of the said clause, pass an\norder in writing registering the trust or institution for a period of five years;\nb) where the application is made under sub-clause (ii) or sub-clause (iii) or sub-\nclause (iv) or sub-clause (v) 66[or item (B) of sub-clause (vi)] of the said clause,--\ni)\ncall for such documents or information from the trust or institution or make\nsuch inquiries as he thinks necessary in order to satisfy himself about--\na) the genuineness of activities of the trust or institution; and\nb) the compliance of such requirements of any other law for the time being in\nforce by the trust or institution as are material for the purpose of achieving its\nobjects;(emphasis supplied)\n4.3.1.\nThus once the Ld.PCIT/CIT is satisfied on above aspects, then registration\nshall be granted in Form 10AD. In other case the application will stand rejected\nafter granting an opportunity of being heard (as per section 12AB(1)(b)(ii) of the\nAct). Further, according to Sub-section 4 and 5 of section 12AB inserted\nby Finance Act, 2022, with effect from 01/04/2022, Ld.PCIT/CIT may cancel\nregistration (after providing reasonable opportunity of being heard) if it is\nfound that, the activities are not genuine or are not carried out in accordance\nwith the objects of trust/institution.At this juncture, we note the fact that\nprovisions of sub sections are applicable to the present assessee based on the date\nof application filed seeking registration under section 12B of the Act.\nPage | 17\nITA No. 2647, 2648/Mum/2025\nM/s Likeminded Education and Welfare Society\n4.3.2.\nRegistration will also stand cancelled under section 12AB, if the\nauthorities notice that, the activities of the trust or institution are carried out in\na manner that the provisions of section11 and 12 do not apply due to operation\nof section 13(1), or, the trust or institution has not complied with the\nrequirement of any other law for the time being in force as is material for the\npurpose of achieving its objects etc. In case there is a specified violation as\nmentioned in Explanation to sub section 4, the Registration under section\n12AB would be denied or stand cancelled, as the case may be. For the sake of\nconvenience, relevant portion of sub section 4 are reproduced as under:\n(4)\nWhere registration or provisional registration of a trust or an institution has\nbeen granted under clause (a) or clause (b) or clause (c) of sub-section (1) or\nclause (b) of sub-section (1) of section 12AA, as the case may be, and\nsubsequently,--\n(a)\nthe Principal Commissioner or Commissioner has noticed occurrence of one\nor more specified violations during any previous year; or\n(b)\nthe Principal Commissioner or Commissioner has received a reference from\nthe Assessing Officer under the second proviso to sub-section (3) of section\n143 for any previous year; or\n(c)\nsuch case has been selected in accordance with the risk management strategy,\nformulated by the Board from time to time, for any previous year, the Principal\nCommissioner or Commissioner shall--\n(i)\ncall for such documents or information from the trust or institution, or make\nsuch inquiry as he thinks necessary in order to satisfy himself about the\noccurrence or otherwise of any specified violation;\n(ii)\npass an order in writing, cancelling the registration of such trust or\ninstitution, after affording a reasonable opportunity of being heard, for such\nprevious year and all subsequent previous years, if he is satisfied that one or more\nspecified violations have taken place;\n(iii)\npass an order in writing, refusing to cancel the registration of such trust or\ninstitution, if he is not satisfied about the occurrence of one or more specified\nviolations;\n(iv)\nforward a copy of the order under clause (ii) or clause (iii), as the case may\nbe, to the Assessing Officer and such trust or institution.\nExplanation.--For the purposes of this sub-section, the following shall mean\n\"specified violation\",--\n(a)\nwhere any income derived from property held under trust, wholly or in part for\ncharitable or religious purposes, has been applied, other than for the objects of\nthe trust or institution; or\nPage | 18\nITA No. 2647, 2648/Mum/2025\nM/s Likeminded Education and Welfare Society\n(b) the trust or institution has income from profits and gains of business which\nis not incidental to the attainment of its objectives or separate books of account are\nnot maintained by such trust or institution in respect of the business which is\nincidental to the attainment of its objectives; or\n(c) the trust or institution has applied any part of its income from the property\nheld under a trust for private religious purposes, which does not endure for the\nbenefit of the public; or\n(d) the trust or institution established for charitable purpose created or\nestablished after the commencement of this Act, has applied any part of its income\nfor the benefit of any particular religious community or caste; or\n(e) any activity being carried out by the trust or institution--\n(i) is not genuine; or\n(ii) is not being carried out in accordance with all or any of the conditions subject\nto which it was registered; or\n(f) the trust or institution has not complied with the requirement of any other law,\nas referred in item (B) of sub-clause (i) of clause (ac) of sub-section (1), and the\norder directing to declare by whoever named, calling that such non-\ncompliance has occurred, has either not been disputed or has attained finality.\n(5)\nThe order under clause (ii) or clause (iii) of sub-section (4), as the case may\nbe, shall be passed before the expiry of a period of six months, calculated from the\nend of the quarter in which the first notice is issued by the Principal\nCommissioner or Commissioner, or on or after the 1st day of April, 2022, calling for\nany document or information, or for making any inquiry, under clause (i) of sub-\nsection (4).\n4.3.3.\nOne of the intention of Legislature to introduce sub clause (4) and (5) to\nthe section 12AB is to address the issue related to the process of approval or\ncancellation or withdrawal thereof.\nClause 3.3(a)(i) of memorandum explaining the provisions in finance bill, 2022 is\nas under:\n"3.

Reference to the Principal Commissioner or Commissioner (PCIT/CIT) for\nthe cancellation of registration/approval:\na) The following issues related to the process of approval or registration,\ncancellation or withdrawal thereof, have been noticed, namely:-\n1) Registration or approval of non-genuine trusts or institution under automated\napproval system; First and second provisos to clause (23C) of section 10 of the\nAct were substituted by new provisos by the Taxation and Other Laws (Relaxation\nPage | 19\nITA No. 2647, 2648/Mum/2025\nM/s Likeminded Education and Welfare Society\nand Amendment of Certain Provisions) Act, 2020 w.e.f. 01.04.2021. These\nprovisos provided that the application for the approval of any trust or institution\nunder the first regime, shall be made to the jurisdictional Principal Commissioner\nor Commissioner and such Principal Commissioner or Commissioner shall grant\napproval after examination of the application. Earlier such applications were\nrequired to be filed before the prescribed authority. Similarly, provisions of clause\n(ac) of sub-section (1) of section 12A provide that application for the trusts or\ninstitution under the second regime shall be made to the principal Commissioner\nor Commissioner. The provisional registrations or provisional approval or re-\nregistrations or approvals in certain cases, under these clauses, are granted in an\nutomated manner and the respective rules have been amended accordingly. It is\nessential to ensure that non-genuine trusts or institutions do not get exemption\nprovided by these provisions.\"\nThus, we do not agree with the argument advanced by the Ld.AR that since\nprovisional registration is granted to the present assessee before u/s.12AB, final\nregistration cannot be denied.\n4.4.\nIn the present facts, the assessee's objects include clause 12, which is not in\nconsonance with the main purpose to grant exemption under section 11(1)(a) of\nthe Act for sale of convenience, the relevant portion are excluded as under. It is\nnoted that, the assessee was offered opportunity of being heard, is apparent from\nthe paper book filed before us. However, nothing on record is filed, to\ndemonstrate that, the assessee took necessary steps to amend the objects which\nis in contravention to section 11(1)(a) of the Act. Admittedly it is not the case\nthat, the assessee has already applied its funds as per object clause 12 of the\nmemorandum.\n4.4.1.\nIt is relevant to note that section 11 (1) (a) was on statute from its inception\nto the provisions of section 11(1)(c ) that reads as under:\nSection 11....\n(1)....\n(a) to (b).....\n(c) income derived from the property held under trust--\n(i) created on or after the 1st day of April, 1952, for a charitable purpose which\ntends to promote international welfare in which India is interested, to the extent to\nwhich such income is applied to such purposes outside India, and\n(ii) for charitable or religious purposes, created before the 1st day of April, 1952,\nto the extent to which such income is applied to such purposes outside India:\nProvided that Board, by general or special order, has directed in either case that\nit shall not be included in the total income of the person in receipt of such income;\nPage | 20\nITA No. 2647, 2648/Mum/2025\nM/s Likeminded Education and Welfare Society\n4.4.2.\nFrom the above provisions, it is clear that, even otherwise, organisations\ncreated after 01/04/1952 were not empowered to do activities outside India, prior\nto the insertion of amended section under section 12A/AB. However, CBDT in\ncertain circumstances may direct by a general or special order permitting certain\nactivities, which tend to promote international welfare in which India is\ninterested.\n\"11. (1) Subject to the provisions of sections 60 to 63, the following income shall\nnot be included in the total income of the previous year of the person in receipt of\nthe income--\n(a) income derived from property13 held under trust wholly13 for charitable or\nreligious purposes13, to the extent to which such income13 is applied13 to such\npurposes in India13; and, where any such income is accumulated or set apart for\napplication to such purposes in India, to the extent to which the income so\naccumulated or set apart16 is not in excess of 17[fifteen] per cent of the income\nfrom such property;\"\n5.\nBe that as it may, by insertion of sub section 4 & 5 inserted by Finance Act,\n2022 widened the scope of violations by including violations specified in\nexplanation therein. This was not the legal position u/s.12A/12AA prior to\namendment. The condition to satisfy that the objects of the trust are not in\nviolation to compliance under any other law for time being in force towards\nachieving the material purposes of the objects is now become necessary to be\nestablished by the assessee at the time when its application is scrutinised for\nconverting provisional to final registration. The explanation (f) to sub clause (4)\nof 12AB mandates compliance with the requirement of any other law as referred\nto item (B) of sub-clause (i) of clause (b) to subsection (1) of 12AB.\nWith such compliance required at the stage of registration, pertaining clause 12 in\nthe memorandum of the assessee trust will be an hurdle to grant final registration.\n6.\nWe therefore do not find any merit in the arguments advanced by the Ld.AR and\nthe same stands rejected based on the discussions and analysis of the relevant\nprovisions and decisions on the issue. As a consequence, the application seeking\n80G also stands rejected. Accordingly, the Grounds raised by the assessee in both\nappeal stands dismissed.\n7.\nLiberty is granted to the assessee to specify the memorandum of the objects\nand file the application seeking final registration before the competent authority\nwhich may be considered in accordance with law.\n7.2\nWe have considered the rival submissions. As per the ld.\nCIT(E), the aforesaid object leaves room for potential endeavour by the\nPage | 21\nITA No. 2647, 2648/Mum/2025\nM/s Likeminded Education and Welfare Society\nassessee trust which would result in expenditure outside India. During\nthe hearing before him, the assessee trust had submitted for amending\nthis object. It may be stated here that the coordinate bench in the case of\nSila for Change Foundation v/s CIT(E)(supra) gave liberty to the\nassessee to specify the memorandum of the objects and file the\napplication seeking final registration before the competent authority\nwhich may be considered in accordance with law. Therefore, having\nconsidered the facts and circumstances of the present case and the in the\nlight of amended provisions, we deem it appropriate to restore the\napplication for seeking registration under section 12AB of the Act to the\nfile of the ld. CIT(E) for de novo adjudication with a direction to the\nassessee to file its amended object at the earliest before the ld. CIT(E),\nwhich may be considered in accordance with law.\n8.\nAs regard the delay in making application for regularisation of\nprovisional registration, the ld.AR has admitted the delay and requested\nfor condoning the same as the delay was on account of medical reasons.\nWe find that the assessee filed provisional registration application in\ntime which is undisputed. Moreover, the delay in fling application for\nfinal approval was marginally delayed for which it is attributed to the\nmedical reasons of the main Trustee and President of the Trust. We find\nthat on identical issue of delay in the coordinate bench of ITAT, Mumbai\nPage | 22\nITA No. 2647, 2648/Mum/2025\nM/s Likeminded Education and Welfare Society\nin the case of Narke Green Foundation Charitable Institution\nITA no.1864/Mum/2025 gave following directions:\n“5.9 At this juncture we refer to the pragmatic approach advocated by Justice\nV.R. Krishna Iyer, wherein he advocated a flexible approach to procedural\nlaw, that serve as \"handmaid\" to justice, and not a hinder it. The Principle of\nJustice Krishna Iyer emphasised that procedural laws should be tools to\nfacilitate administration of justice various decisions of Hon'ble Supreme Court\nhas emphasised to strike a balance between strict adherence to procedural\nrules and the need to ensure that justice is not denied due to technicalities.\n5.10 We agree with the above preposition observed by Hon'ble Pune Tribunal.\nHowever genuine and bonafide reason stated by the assessee cannot be over\nlooked. Further we also note that, flexible and pragmatic approach to such\nprocedural laws is necessary as against recognising a strict adherence to do\nwhich could sometime lead to injustice. Hon'ble Supreme Court in plethora of\ncases always emphasised that while considering delay, one must first ascertain\nbonafides of the explanation offered by the party seeking condonation.\nThereafter there must be sufficient cause which is substantianable based on the\ngenuine reasonable explanation.\n5.11 While condoning the delay it is crucial to ensure the party seeking\ncondonation provide genuine explanation for the delay. In present facts of the\ncase, we note that, the reason that caused delay is based on a bonafide belief\non behalf of the assessee without there being any malafide intention.\n6.\nIn our considered opinion assessee must get an opportunity to present its\ncase before the Ld.CIT(E) and to explain the reason that caused the delay. The\nLd.CIT(E) shall consider the application of assessee seeking condonation of\ndelay in accordance with law keeping in view to the above principles of\nnatural justice.”\n9.\nRespectfully following the above decision, we deem it\nappropriate to restore the application for seeking registration\nunder section 12AB of the Act to the file of the learned CIT(E) for de\nnovo adjudication on the delay in submission of relevant application\nbefore the ld. CIT(E), which may be considered in accordance with law.\n10.ITA No.2648/MUM/2025\nPage | 23\nITA No. 2647, 2648/Mum/2025\nM/s Likeminded Education and Welfare Society\n1. Incorrect Invocation of the provisions of Section 11 of The\nIncome Tax Act, 1961:\nOn the basis of facts and circumstances of the case, the Learned\nCommissioner of Income Tax (Exemptions), Mumbai [Hereinafter\nreferred to as “CIT(Exemptions)”) erred in confirming rejection of\nregistration citing the violation of Provisions of Section 11 of The Income\nTax Act, 1961 without considering the fact that your appellant has not\napplied any of its income outside India till date which is adequately and\nduly supported by documentary evidences submitted to the office of the\nLrnd. CIT(Exemptions).\nFurther, Learned CIT(Exemptions) has erred in invoking the provisions\nof Section 11(1)(c) of The Income Tax Act, 1961 merely on the ground that\nthe MOA and Rules & Regulations provide for the application of Income\noutside India thereby misinterpreting the said section without\nunderstanding the difference between “Actual Application” outside India\nand “Providing for Application” of funds outside India.\nOn the basis of the facts and circumstances of the case, the Learned CIT\n(Exemptions) has erred in law and on facts by misinterpreting the\nprovisions of Section 11 of the Income Tax Act, 1961, in as much as the\nsaid provisions pertain to the denial of exemption to the extent\nof actual application of income outside India, and not to the\ndenial of registration under Section 80G of the Act.\n2.\nOn the basis of facts and the circumstances of the case, the Learned CIT\n(Exemptions) erred in rejecting the registration under Section\n80G(5)(i) on the grounds of rejection of application under\nSection 12AB of the Act.\n3.\nOn the basis of the facts and circumstances of the case, the Learned\nCommissioner of Income Tax (Exemptions) has erred in failing to\nappreciate that the appellant is a genuine charitable organization, and\nthat the denial of registration would consequently deprive the appellant\nof eligible exemptions under the Act, thereby adversely impacting its\nability to source funds for application towards its objectives of social and\npublic welfare.\n11. As we have remanded the issue of grant of registration\nunder section 12AB of the Act to the file of the learned CIT(E) for de\nnovo adjudication, therefore the order of the learned CIT(E) for rejecting\nthe application for registration under section 80G of the Act is also set\nPage | 24\nITA No. 2647, 2648/Mum/2025\nM/s Likeminded Education and Welfare Society\naside and the matter is restored to the file of the learned CIT(E) for\ndeciding it afresh. As a result, the grounds raised by the assessee are\nallowed for statistical purposes.\n12. In the result, both appeals by the assessee are allowed\nfor statistical purposes.\nOrder pronounced in the open court on 16.06.2025.\nSd/-\nSANDEEP GOSAIN\n(न्यायिक सदस्य /JUDICIAL MEMBER)\nPlace: मुंबई/Mumbai\nदिनांक / Date 16.06.2025\nLubhna Shaikh / Steno\nSd/-\nPRABHASH SHANKAR\n(लेखाकार सदस्य/ACCOUNTANT MEMBER)\nआदेश की प्रतिलिपि अग्रेषित/

M/S. LIKEMINDED EDUCATION AND WELFARE SOCIETY ,MUMBAI vs. COMMISSIONER OF INCOME TAX (EXEMPTION), MUMBAI