JHAVERBHAI PATEL RESERCH CENTRE ,MUMBAI vs. COMMISSIONER OF INCOME TAX (EXEMPTION), MUMBAI

Regarding the issue of delay in filing of application, the applicant has stated that the Charity Commissioner order dated 29.11.2024 was received by the applicant on 17.01.2025 as the Joint Charity Commissioner was on leave, Applicant has further requested for condonation of delay of 38 days in filing of application. The contention of the applicant is found acceptable and hence, the delay of 38 days in filing of application is condoned.

Since registration under section 12AB is to be granted in terms of the provisions of section 12AB(1)(b) of the Act after being satisfied about the objects of the trust 4 Jhaverbhai Patel Research Centre or institution, the genuineness of activities, and the compliance of any other law for the time being in force as are material for the purposes of achieving its objects. In view of the violation mentioned above, the undersigned is left with no other option but to reject the application seeking registration under section 12AB of the Act. However, the applicant is at liberty to pursue the remedies available in Statute, without any prejudice.

In the view of the above, the application for regularization of provisional registration in Form 10AB filed by the assessee is not allowable on the ground of violation of provisions of section 11. In conclusion, this application for grant of registration stands rejected.”

Referring to the aforesaid observations of ld. CIT(E), ld. AR submitted that the observations of ld. CIT(E) are not lawful, being misconceived in terms of the provisions of Act, as well as the facts of the case. To substantiate the aforesaid contentions the ld. AR took us to page 37 of the assessee’s Paper Book (PB) containing therein the reply of assessee to ld. CIT(E), that the order passed by Charity Commissioner dated 29.11.2024 was received by the assessee’s society only on 17.01.2025, thus the application for grant of registration under section 12AB, which was filed on 04.02.2025 was within 30 days of reply of aforesaid order. Regarding Clause-3(10), 3(12) & 3(16) of the objects of the Trust-deed/MOA, the assessee intends to apply funds outside India, the assessee had passed a resolution in its Executive Committee on 11.09.2025, amending the said Clause. (copy enclosed in the PB page 1-16). Further such Clause were there in the MOA of the assessee society since 1976, but were never used / undertaken through any activity falling under the scope of Jhaverbhai Patel Research Centre such objects. It is thus submitted that there was no alleged violation of the provisions of section 11 of the Income Tax Act, 1961. Regarding the expenditure towards the activities for the Financial Year (FY) 2024-25, the assessee society has donated Rs. 2,50,000/- towards education expenses for Dr. Anand Gokani Rs. 50,000/- and for Ms. Annushree Ajit Kumar Rs. 2,00,000/-. The documents pertaining to such payments were also furnished in the PB before us according to which the payment of Rs. 2,00,000/- to Ms. Annushree Ajit Kumar for study in Washington University was made, paid to her in Indian rupees in her bank account and thereafter remitted by her in equivalent USD under her own arrangements, but was wrongly construed by ld. CIT(E) as expenditure incurred outside India.

The ld. AR submitted that all the aforesaid issues were duly explained by assessee before the ld. CIT(E), however those were treated as violation to the provisions of section 11(1)(c) of the Act and based on such observations, the application of assessee was rejected. It was the prayer that there was no violation on the part of assessee under provisions of section 11(1)(c) of the Act, the clauses which needs amendment are also acted upon by the Executive Committee of assessee society for necessary amendments, further argued that the scholarship to Indian resident paid in India for higher education outside India, should not be treated as payment made outside India. Reliance was placed on Mangaldas Charitable Trust, Mumbai Vs. CIT(E), Mumbai, in Jhaverbhai Patel Research Centre dated 31.10.2025 and ITA 7006/Mum/2013 in the case of Jamsetji Tata Trust Vs. JCIT(E), Mumbai vide order dated 26.03.2014. It is submitted that, the decision of ld. CIT(E) was not in accordance with the provisions of law, the same is liable to be set-aside and be direct to allow the assessee’s registration under section 12AB of the Act.

Per contra, ld. CIT-DR vehemently supported the order of ld. CIT(E).

We have considered the rival submissions perused the material available on record. Admittedly in present case the application of assessee in Form 10AB was furnished with a delay of 38 days for which it is submitted by the assessee that the order was served to them on 17.01.2025 and the application was filed within 30 days from receipt of the said order. Regarding the issue of delay Hon’ble Bombay High Court in the case of Columbia Global Center in India vs The Income Tax Officer (Exemptions) on 7 October, 2025, WRIT PETITION (L) NO. 23170 OF 2025, had held that, “the approach of the authority ought to be equitious, balancing and judicious and availing of exemption should not be denied merely on the bar of limitation. This is more so when the Legislature has, under Section 119(2)(b) of the Act, conferred discretionary powers to condone the delay on the authorities concerned with a view to avoid genuine hardship.”, we, thus, are of the opinion that, the delay of 38 days, that too explained, to be on account of delay in receipt of Order from Charity Commissioner, the assessee should not be penalized for that, even otherwise the Jhaverbhai Patel Research Centre authority needs to adopt a liberal and justice oriented approach to while condoning the delay. We this direct to condone the delay in filing of for 10AB in present case.

On other issues, which forms the belief of Ld. CIT(E) to reject the application of assessee, that the payment in India for study outside India does equate to payments / expenses incurred outside India, does not inspire any confidence, particularly when the scholarship is granted to an Indian citizen in Indian rupees. This issue was decided ITAT Mumbai in the case of R. Mangaldas Charitable Trust, Mumbai Vs. CIT(E) (supra), observing that, “if the scholarship is granted by a charitable institution in accordance with their objects, whereby such financial assistance is provided in India in Indian rupees and that too, to Indian student, such application of income will happen for educational purposes in India. The financial assistance so provided will be utilized by students for abroad cannot be read and understood as providing financial assistance outside India and consequent upon application of income outside India. Assessee trust also taken necessary steps to amend the objects of trust to put at rest any doubts in this respect.” The facts of the present matter, being identical to facts of aforesaid case of R. Mangaldas Charitable Trust (supra), in absence of any distinguishing fact, we find no merits in the decision of Ld. CIT(E) in treating the grant of financial assistance to Ms. Annushree AjitKumar in India, to be an expenditure incurred out side India. We, thus, direct the same to be treated as a permissible action by the trust and not in Jhaverbhai Patel Research Centre violation of section 11(1)(c) of the Act. A similar issue raised in the appeal in ITA 7006/Mum/2013 in the case of Jamsetji Tata Trust Vs. JCIT(E), Mumbai vide order dated 26.03.2014 (supra), the tribunal holds that, education grant given to the Indian students in India for education / higher education abroad fulfils the conditions of application of money for such purpose in India.

In backdrop of the aforesaid facts, circumstances and decisions, which could not be contradicted by the revenue, we deem it appropriate to restore this matter back to the file of Ld. CIT(E) to revisit / reconsider the application of assessee in for 10AB for grant of registration u/s 12AB and decide the same om merits of the case.

In result, impugned order of Ld. CIT(E) is set aside and the appeal of assessee is allowed for statistical purposes, in accordance with our observations as indicate above.