BHAGWATI FOUNDATION ,MUMBAI V. CIT(EXEMPTIONS), MUMBAI

ITA 4613/MUM/2025

AI Insights

The case involves Bhagwati Foundation, which appealed against the decision of the Commissioner of Income Tax (Exemptions), Mumbai, rejecting their application for registration under section 80G(5) of the Income Tax Act, 1961. The rejection was based on the incorrect mentioning of the clause in the application form, where clause (ii) was cited instead of clause (iii) of the first proviso to section 80G(5). The Tribunal, referencing various decisions from coordinate benches, found merit in the assessee's claim that the incorrect clause was cited inadvertently and directed the CIT(E) to reconsider the application under the correct clause.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 775609 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 21-07-2025
• Other Referred Cases: Modasa Ekda Visha Khadayata Modipunch Kelavani Mandal vs. Commissioner of Income-tax (Exemption), My Ecosocial Planet Foundation vs. Commissioner of Income-tax (Exemptions), Pune, Abhinav Shikshan Sanstha vs. Commissioner of Income-tax (Exemption), Swaraj Foundation vs. Income-tax Officer
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATYAPRAKASH R.SINGH
• Assessee Lawyers: PRIYANK GHIA
• Keywords: Set aside; Principle of natural justice; Procedural lapse
• Section: 80G

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI BEFORE SHRI NARENDRA KUMAR BILLAIYA, ACCOUNTANT MEMBER SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA No. 4613/MUM/2025 (Assessment Year : N.A) Bhagwati Foundation, 1304, Regent Chambers, Jamnalal Bajaj Road, Nariman Point, Mumbai-400021. PAN : AADTB3235B ............... Appellant v/s CIT(Exemptions), Cumballa Hill, MTNL Telephone Exchange Building, Pedder Road, Dr Gopalrao Deshmukh Marg, Mumbai – 400026. ……………… Respondent Assessee by : Shri Priyank Ghia Revenue by : Shri Satyaprakash R. Singh, Sr.DR Date of Hearing – 09/09/2025 Date of Order - 11/09/2025 O R D E R PER SANDEEP SINGH KARHAIL, J.M. The assessee has filed the present appeal against the impugned order dated 23.06.2025, passed by the learned Commissioner of Income Tax (Exemptions), Mumbai, [“learned CIT(E)”] in Form no.10AD rejecting the application filed by the assessee for seeking registration under section 80G(5) of the Income Tax Act, 1961 (“the Act”). 2. In this appeal, the assessee has raised the following grounds: – Printed from counselvise.com ITA No.4613/Mum/2025 (A.Y. N.A) 2 “1. On the facts and circumstances of the case and in law, the Learned Commissioner of Income Tax (Exemptions) (\"Ld. CIT(E)\") has erred in rejecting the application for approval under section 80G of the Income Tax Act, 1961 (\"The Act\"), on the ground that the application was filed under an incorrect clause, without appreciating that the appellant trust has otherwise fulfilled all the conditions prescribed for obtaining final approval. 2. The Ld. CIT(E) has erred in rejecting the application purely on technical grounds without granting a proper opportunity to rectify or cure the alleged defect, which amounts to a violation of the principles of natural justice. 3. The Ld. CIT(E) has erred in rejecting the application solely on procedural grounds, without considering the substantive compliance and the eligibility of the trust, is arbitrary, unjustified, and contrary to the principles of natural justice. 4. The Ld. CIT(E) has erred in not considering that the eventual filing in November 2024 was delayed solely due to procedural lapse and portal glitches, and the delay ought to have been condoned in the interest of justice, particularly when there is no malafide intent or lapse on the part of the trust. 5. Without prejudice to the above, the Ld. CIT(E) has erred in not considering that the appellant had held certificate u/s 80G of the Act prior to the insertion of the amendment effective from 01.04.2021. The appellant craves leave add, alter or delete to the grounds of appeal at the time of or before hearing.” 3. The solitary grievance of the assessee is against the rejection of its application for registration under section 80G(5) due to the wrong mentioning of the clause of the first proviso to section 80G(5) of the Act. 4. We have considered the submissions of both sides and perused the material available on record. The brief facts of the case are that the assessee is a trust and was granted provisional registration. Subsequently, the assessee filed an application in Form 10AB, seeking approval under section 80G(5) of the Act. However, due to inadvertence, the assessee mentioned clause (ii) instead of clause (iii) of the first proviso to section 80G(5) of the Act. The learned CIT(E), vide impugned order dated 23/06/2025, rejected the application filed by the assessee on the basis that the same has been filed Printed from counselvise.com ITA No.4613/Mum/2025 (A.Y. N.A) 3 under wrong section, as provisional registration was already granted to the assessee, and therefore, the assessee is not qualified to make the application under clause (ii) of the first proviso to section 80G(5) of the Act. 5. We find that this issue is no longer res integra and has been decided in favour of the taxpayer by various decisions of the coordinate benches of the Tribunal. We find that recently the coordinate Ahmedabad bench of the Tribunal, in Modasa Ekda Visha Khadayata Modipunch Kelavani Mandal vs. Commissioner of Income-tax (Exemption), reported in [2025] 177 taxmann.com 545 (Ahd - Trib.), observed as follows: – “4. We have heard the parties and perused the materials placed on record and Paper Book filed by the assessee. Before we proceed to examine the facts in assessee's case, it is necessary to first look at the relevant provisions of the second proviso to sub-section (5) of section 80G which read as under - Provided that the institution or fund referred to in clause (vi) shall make an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for grant of approval, (i) where the institution or fund is approved under clause (vi) [as it stood immediately before its amendment by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020), within three months from the 1st day of April, 2021; (ii) where the institution or fund is approved and the period of such approval is due to expire, at least six months prior to expiry of the said period; (iii) where the institution or fund has been provisionally approved, at least six months prior to expiry of the period of the provisional approval or within six months of commencement of its activities, whichever is earlier; -[or] (iv) where activities of the institution or fund have (A) not commenced, at least one month prior to the commencement of the previous year relevant to the assessment year from which the said approval is sought; (B) commenced at any time after the commencement of such activities:] Printed from counselvise.com ITA No.4613/Mum/2025 (A.Y. N.A) 4 4.1. As per the above provisions, application to be made to the Principal Commissioner or Commissioner for approval of the fund/institution u/s. 80G(5)(vi) of the Act is guided by the second proviso to sub-section (5) of section 80G of the Act. In the present case the assessee had filed its application on 28.09.2024 but its activities had commenced long back from 1974. Therefore, the assessee's case was covered in clause (iii) of proviso to sub-section (5) of section 80G of the Act, as it was granted provisional registration in Form 10AC for the period from Asst. Years 2022-23 to 2025- 26. However, the assessee trust mistakenly applied under clause (ii) of the second proviso to sub-section (5) of section 80G of the Act. The Id. CIT(E) rejected the application on the ground that he has no power and facility under the Act to amend the section code wrongly selected by the assessee in Form 10AB and denied registration. 4.2 This issue of wrong quoting of provisions is no more res-integra since Co- ordinate Bench decision in ITA No. 1085/Ahd/2025 dated 16-07-2025 in the case of Modasa Ekda Visha Khadayata Kovadia Kelavani Mandal v. CIT (Exemption) [2025] 176 taxmann.com 569 (Ahd - Trib.) held as follows: \".....various decisions by the Tribunal namely Aatman Foundation v. CIT(E) 174 taxmann.com 1109 (Ahmedabad-Trib.), Gandhinagar Ayyapa Pooja Samiti Vis. CIT(E) 174 taxmann.com 901(Ahmedabad-Trib.) & Rotary Charity Trust v. CIT(E) 170 taxmann.com 797 (Mumbai - Trib) and more particularly Kolkata Tribunal decision in the case of Nitdaa Foundation -Vs- CIT [E] [cited supra] held that where assessee was an existing trust but it filed an application under clause (iii) of second proviso to section 80G(5) in Form No. 10AB on 24-5-2023 for approval and Commissioner held that application was not maintainable as it was not filed within stipulated period. Since whole controversy arose due to incorrect mention of clause in Form No. 10AB, which was mentioned as clause (iii); whereas same should have been mentioned as clause (1), Commissioner was to be directed to consider application as filed under clause (1) for grant of approval\". 5. Following the above decisions, we are of the considered view that there is merit in the claim of the Id. AR that the assessee had selected the wrong section code inadvertently while filing the application for approval in Form 10AB. In view of these discussions and respectfully following the decision of the Kolkata Bench, we remit the issue back to the file of ld. CIT(E), with a direction to consider the application of the assessee as under Clause (iii) to second proviso to section 80G(5) of the Act, and thereafter grant approval accordingly, if assessee is otherwise found eligible.” 6. We find that similar findings have been rendered by the coordinate benches of the Tribunal in the following decisions: – (a) My Ecosocial Planet Foundation vs. Commissioner of Income-tax (Exemptions), Pune [2025] 177 taxmann.com 148 (Pune - Trib.) Printed from counselvise.com ITA No.4613/Mum/2025 (A.Y. N.A) 5 (b) Abhinav Shikshan Sanstha vs. Commissioner of Income-tax (Exemption) [2025] 176 taxmann.com 97 (Pune - Trib.) (c) Swaraj Foundation vs. Income-tax Officer [2025] 176 taxmann.com 329 (Visakhapatnam – Trib.) 7. Therefore, respectfully following the aforesaid decisions of the coordinate bench of the Tribunal, we deem it appropriate to set aside the impugned order and restore the matter back to the file of the learned CIT(E) with a direction to treat the application already filed by the assessee as filed under the proper section of the Act and decide the same, as per facts and law, after affording a reasonable and adequate opportunity of hearing to the assessee. As a result, grounds raised by the assessee on merits are allowed for statistical purposes. 8. In view of our aforesaid directions, the other grounds raised by the assessee have been rendered academic, and therefore, are left open. 9. In the result, the appeal by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 11/09/2025 Sd/- NARENDRA KUMAR BILLAIYA ACCOUNTANT MEMBER Sd/- SANDEEP SINGH KARHAIL JUDICIAL MEMBER MUMBAI, DATED: 11/09/2025 Printed from counselvise.com ITA No.4613/Mum/2025 (A.Y. N.A) 6 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order Assistant Registrar ITAT, Mumbai Printed from counselvise.com "