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Facts
The assessee, Saryan Vigyan Foundation, a Section 8 company, applied for provisional registration under Section 12A/12AB and approval under Section 80G. The CIT(E) rejected these applications, alleging that the assessee had commenced activities in March 2024, before filing Form INC-20A on 03.05.2024, which is required for a Section 8 company to legally commence business. The assessee contended that the March 2024 activities were carried out by its promoters in their personal capacity and not by the incorporated entity, and that provisional registration was already granted for a specific period.
Held
The Tribunal held that the CIT(E) had wrongly rejected the applications without adequately examining the nature and genuineness of the assessee's charitable activities and objects. It was observed that merely commencing activities is not a statutory ground for rejection, and the CIT(E) did not discharge its duty to examine the genuineness of activities. Therefore, both appeals were remanded back to the CIT(E) for a fresh examination of all aspects and to pass a new order.
Key Issues
1. Whether the CIT(E) was justified in rejecting provisional registration under Section 12A/12AB and approval under Section 80G solely on the premise of pre-incorporation commencement of activities. 2. Whether the CIT(E) failed to examine the genuineness of the assessee's charitable activities as required by law.
Sections Cited
12AB(1)(b)(ii), 80G, 12A(1)(ac)(iii), 12A, 12AB
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Income Tax Appellate Tribunal, CHANDIGARH BENCH, ‘B’, CHANDIGARH
Before: SHRI LALIET KUMAR & SHRI KRINWANT SAHAY
आदेश/Order Per Krinwant Sahay, AM : Both the appeals filed by the Assessee are against the order of Ld. CIT(E), Chandigarh each dated 8.10.2025 for rejection of the Assessee’s applications for grant of registration.
2. We shall deal with each of the appeal separately. First, we shall deal with as under:
ITA No. 1655/Chd./2025:
3. Appeal in this case has been filed against the order dt. 8.10.2025 passed by the Ld. Commissioner of Income Tax (Exemptions), Chandigarh.
4. Grounds of appeal, as mentioned in Form No.36, are as under: -
CIT(E) wrongly treated promoters' March 2024 work as company activity despite
ITA Nos. 1655 and 1656-Chd-2025 3
1. INC-20A being filed only on 03.05.2024, and termed provisional registration "bad in law". Even if any such activity is assumed, it is only a procedural lapse; CIT(E) ignored the genuineness of activities and unlawfully superseded valid registration.
5. The Ld. CIT(E) has given her findings for the rejection of application filed in Form No. 10AB u/s 12A (1)(ac)(iii) of the Act.
1. “3.3 From the facts and law stated above, it is evident that the provisional registration could not have been granted in the case as the applicant had already commenced its activities March, 2024.
In view of the above discussion, the present application of the applicant filed in Form 10AB u/s 12A(1)(ac) (iii) of the Act is hereby rejected since the provisional registration granted is bad in law. This rejection will also supersede any registration granted u/s 12AB by any authority at any earlier time.
The ld. Counsel for the Assessee has filed a written submission which is as under: -
The appellant, Saryan Vigyan Appellant ("the Appellant"/ "Appellant"), PAN ABMCS5877P, is a and 1656-Chd-2025 4 company incorporated under Section 8 of the Companies Act, 2013 on 22.01.2024 with exclusively charitable objects in the field of science, environment, education and social welfare. Certificate of Incorporation of the company is marked as Annexure - 1.
It is stated that, being a Section 8 company limited by shares, the Appellant could not legally commence its business/charitable activities until filing the declaration for commencement of business in Form INC-20A Marked as ANNEXURE - 2 in terms of Section 10A of the Companies Act, 2013. It is to state that the Appellant filed Form INC-20A on 03.05.2024 vide SRN: AA7780741/ BharatKosh Order ID: 1-13593445596, and only thereafter was it legally permitted to commence its activities in its own name.
Before incorporation of the Appellant, the promoters/directors were individually engaged in similar charitable and scientific activities in Kinnaur district, Himachal Pradesh. They continued such work in their personal capacity in March 2024 as part of a continuum of efforts. These activities, conducted before 03.05.2024, were not carried out by the Appellant as a corporate entity, which was, at that time, yet to file INC-20A and thus could not legally commence business.
ITA Nos. 1655 and 1656-Chd-2025 5
4. In the reply to the notice of the learned CIT (Exemptions) dated 11th July, 2025, the Appellant stated that "the charitable activities of Saryan Vigyan Appellant commenced in March 2024" and annexed evidence of activities in Kinnaur.
It is submitted that in Appellant's Reply to said Notice, this phrasing was used in the sense of continuity of the promoters' earlier work and as a successor organization claiming that past work as its legacy/predecessor activity. It was not intended, nor was it legally possible, to assert that the Section 8 company itself had commenced business before filing INC-20A on 03.05.2024.
6. It is a matter of fact that the Appellant applied for provisional registration under Section 12A and approval under Section 80G under the faceless scheme, treating itself as a newly incorporated entity that had not yet commenced its own activities in the legal sense, as its first year of existence and compliance under Companies Act had just begun. Provisional registration under Section 12A/12AB and 80G bearing No ABMCS5877PE20241 & ABMCS5877PF20241 was granted by CPC on 26.07.2024 for the period 26.07.2024 to 26.07.2027, as recorded in the records and in the Appellant's reply. A copy of Provisional registration under Section 12A/12AB and 80G granted to the and 1656-Chd-2025 6 Appellant is annexed herewith and marked as Annexure-3 (Colly).
In due course, the Appellant filed Form 10AB on 17.04.2025 bearing No 937539860170425 seeking regular registration under Section 12A(1)(ac)(iii) read with Section 12AB and corresponding approval under Section 80G, on the basis that charitable activities, now properly carried out in the name of the Appellant post-INC- 20A, had commenced and were genuine and in line with its objects.
8. The learned CIT (Exemptions), Chandigarh ["CIT(E)"] issued notices/queries on 28.05.2025, 13.06.2025, and 04.07.2025 calling for compliance with objects. A copy of said notice of learned "CIT(E)"Chandigarh is annexed herewith and marked as Annexure-5.
9. The Appellant furnished detailed replies along with documents (MOA, activity reports, photographs, media coverage, bank statements etc.) via email and through the e-proceeding module, including a detailed point-wise reply dated 11.07.2025. In response to Query No. 4, the Appellant explained that charitable activities in the Kinnaur region were being undertaken since March 2024 and annexed a detailed Table-A of projects and events along with supporting evidence.
ITA Nos. 1655 and 1656-Chd-2025 7
10. By order dated 08.10.2025 in Form 10AD, DIN ITBA/EXM/F/EXM45/2025-26/1081561265(1), the learned CIT(E), Chandigarh rejected the application in Form 10AB under Section 12A(1)(ac)(iii), holding that: “On the basis of the reply, the Appellant's activities had "commenced in March 2024": Therefore, the Appellant was not eligible for provisional registration, which according to the CIT(E) is only for institutions which have "not yet commenced" activities; and The provisional registration granted earlier was "bad in law" and the rejection would "also supersede any registration granted u/s 12AB by any authority at any earlier time."
11. No adverse finding was recorded on the genuineness of the activities, the charitable nature of the objects, or compliance with other laws the rejection was solely on the above legal premise.
The appellant is aggrieved because: a. The learned CIT(E) has misconstrued the reply referring to March 2024 activities and ignored the legal requirement that a Section 8 company cannot commence business before filing INC-20A on 03.05.2024. The March 2024 activities were in fact those of the promoters/predecessor, not of the incorporated entity, and could not be and 1656-Chd-2025 8 relied upon to invalidate provisional registration; b. Even otherwise, the text of Section 12A(1)(ac)(vi) itself contemplates cases where activities have commenced, and the mere commencement of activities is not a statutory ground to reject registration; and The CIT(E) did not discharge the statutory duty under Section 12AB to examine the genuineness of activities and compliance with objects, and acted beyond jurisdiction in purporting to "supersede" an earlier provisional registration without following cancellation procedure.
7. During proceedings before us, the ld. Counsel for the Assessee argued on the lines of written submissions filed before us.
Per Contra, the ld. DR relied on the orders of the Ld. CIT(E).
We have considered the findings given by the Ld. CIT(E) in her order for rejection of application filed for registration u/s 12A and consequently refusing registration for 80G. We have also considered the written submissions filed and arguments made by the Ld. counsel of the Assessee. We are of this view that the Ld. CIT(E) should have looked into the nature of activities of the and 1656-Chd-2025 9 Assessee before arriving at any conclusion. The details of such activities have been given by the Counsel in the written submissions. After going through the details filed by the Ld. counsel, we are inclined to remand this case back to the file of the Ld. CIT(E) to relook into different aspect and pass order accordingly.
In the result, the Assessee’s appeal is allowed for statistical purposes.
ITA No. 1656/Chd./2025 (u/s 80G)
In this appeal the Assessee has raised the following grounds:
1. 1. “CIT(E) wrongly rejected 80G approval solely on the alleged invalidity of the provisional registration, thereby denying registration under Section 12A and consequently refusing the 80G application without examining the appellant's charitable objects and genuine activities as required under Section 80G.”
12. From the record, we find that the facts and issue involved in this appeal is identical to that of and the submissions of the Ld. and 1656-Chd-2025 10 Representative are altogether similar. The findings of Ld. CIT(E) are also similar. The only difference is that here the claim of the Assessee is that the Ld. CIT(E) has wrongly rejected 80G approval without examining the appellant charitable objects u/s 80G.
We have considered the findings given by the Ld. CIT(E) in her order for rejection of application filed for registration u/s 12A(1)(ac)(iii). We have also considered the written submissions filed and arguments made by the Ld. counsel of the Assessee. We are of this view that the Ld. CIT(E) should have looked into the nature of activities of the Assessee before arriving at any conclusion. The details of such activities have been given by the Counsel in the written submissions. After going through the details filed by the Ld. counsel, we are inclined to remand this case back to the file of the Ld. CIT(E) to relook into different aspect and pass order accordingly.
In the result, the Assessee’s appeal is allowed for statistical purposes.
ITA Nos. 1655 and 1656-Chd-2025 11