GLOBAL COUNCIL OF ZOROASTRIANS TRUST,MUMBAI V. CIT (EXEMPTIONS), MUMBAI

ITA 4928/MUM/2025

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The Global Council of Zoroastrians Trust appealed against the decisions of the Commissioner of Income Tax (Exemptions), Mumbai, which rejected their applications for final registration under Section 12AB and approval under Section 80G of the Income Tax Act, 1961. The CIT(E) had rejected the applications primarily on grounds that the trust's objects might lead to the application of funds outside India and benefit a particular religious community, which could violate Sections 11 and 13(1)(b) of the Act. The Tribunal, referencing several judicial precedents, found that the CIT(E)'s approach exceeded the permissible limits of enquiry at the registration stage and restored the matter for re-evaluation.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 833520 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: misc
• Appeal Filed On: 05-08-2025
• Other Referred Cases: Dawoodi Bohara Jamat (364 ITR 31), M.K. Nambyar Saheb Law Charitable Trust (269 ITR 556), Sameer Desai Foundation (ITA Nos. 4509 & 4508/Mum/2025)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN KANTI DATTA
• Assessee Lawyers: DHARAN GANDHI; VINITA NARA
• Keywords: Set aside; Opportunity of being heard; Charitable institution
• Section: 11; 80G

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT AND SHRI JAGADISH, ACCOUNTANT MEMBER I.T.A. No. 4928/Mum/2025 & I.T.A. No. 4930/Mum/2025 Global Council of Zoroastrians Trust E-604,Remi Bizcourt, Off Veera Desai Road, Andheri West, Mumbai-400053 PAN: [AAETG3442J] Vs. CIT (Exemptions) Room No.601, 6th Floor, Cumballa Hill MTNL TE Building, Peddar Road, Cumballa Hill, Mumbai-400026 (Appellant) (Respondent) Appellant by Shri Dharan Gandhi & Vinita Nara Respondent by Shri Arun Kanti Datta - CIT DR Date of Hearing 14.01.2026 Date of Pronouncement 06.02.2026 ORDER Per: SHRI JAGADISH, A.M.: 1. These two appeals by the assessee are directed against separate but connected orders both dated 25.06.2025 passed by the Commissioner of Income Tax (Exemptions), Mumbai. In I.T.A. No. 4930/Mum/2025, the Ld. CIT(E) rejected the assessee’s application for final registration under Section 12A(1)(ac)(iii) read with Section Printed from counselvise.com ITA Nos.4928 & 4930/M/2025 Global Council of Zoroastrians Trust 2 12AB of the Income-tax Act, 1961. In I.T.A. No.4928/Mum/2025, the Ld. CIT(E) rejected the assessee’s application for approval under section 80G(5) of the Act. Since the issue under section 80G is consequential to the decision under Section 12AB and the facts are common, both appeals were heard together and disposed of by this consolidated order. I.T.A. No.4930/Mum/2025 2. The assessee has filed this appeal on following grounds:- “1. The Learned Commissioner of Income Tax Exemption [CIT(E)] has erred both on facts and in law in passing the order dated 25th June, 2025, rejecting the application for final registration u/s 12A(1)(ac) (iii) of the Income Tax Act, 1961 [\"the Act\"] in Form No. 10AB and not granting the final registration u/s 12A(1)(ac)(iii) of the Act. The reason given in this regard are improper, unwarranted, unjustified and contrary to the provision of the Act. It be held that on facts and circumstances prevailing in the case, the registration should have been granted. 2. The Learned CIT(E) has failed to appreciate Appellant's contentions and has erred in passing the order for rejection of application for final registration u/s 12A(1)(ac)(iii) of the Act without considering the evidences placed on record and submissions made by the Appellant in response to the notices issued during proceedings u/s 12A(1)(ac) (iii) of the Act. Therefore, Appellant prays that the impugned order be set aside and appellant be granted final registration u/s 12A(1)(ac) (iii) of the Act. 3. The Learned CIT(E) has erred in not providing reasonable opportunity of being heard to the Appellant before passing the rejection order u/s 12AB(1)(b)(ii)(B) of the Act. The Appellant, therefore, prays that the said impugned order be set aside. Printed from counselvise.com ITA Nos.4928 & 4930/M/2025 Global Council of Zoroastrians Trust 3 4. Appellant craves leave to add, amend, alter or modify any of the aforesaid grounds of appeal, as the circumstances may arise or demand.” 3. The assessee is a charitable trust constituted with the stated objects of undertaking charitable activities. It was earlier granted provisional registration and, thereafter, filed Form No. 10AB seeking final registration under Section 12AB of the Act. The Ld. CIT(E) rejected the application for registration under Section 12AB mainly on the grounds that: a. the objects of the trust indicate possible application of funds outside India, which according to the Ld. CIT(E) would be in violation of Section 11 of the Act; b. the objects allegedly benefit a particular religious community, attracting the provisions of Section 13(1)(b); 4. Aggrieved, the assessee is in appeal before the Tribunal. 5. The Ld. Authorised Representative submitted that the approach adopted by the Ld. CIT(E) is contrary to the settled legal position governing registration proceedings. It was contended that, at the stage of Section 12AB, the authority is required to confine itself to examination of the objects of the trust and the genuineness of activities, and not to embark upon an enquiry regarding possible future application of income or apprehended violations. 6. It was further submitted that the mere fact that the trust’s objects refer to a particular community does not automatically attract Section 13(1)(b) at the stage of registration. Reliance was placed on the judgment of the Hon’ble Supreme Court in Dawoodi Bohara Jamat (364 ITR 31) and the judgment of the Hon’ble Delhi High Court in M.K. Nambyar Saheb Law Charitable Trust (269 ITR 556). The Ld. AR also relied on the recent decision of the Mumbai Bench of the Tribunal in Sameer Desai Foundation (ITA Nos. 4509 & 4508/Mum/2025). The Ld Printed from counselvise.com ITA Nos.4928 & 4930/M/2025 Global Council of Zoroastrians Trust 4 AR further draws our attention to the clause 2(vii) of objects where it has been stated providing relief irrespective of caste, creed, religion to poor. 7. The Ld. Departmental Representative supported the orders of the Ld. CIT(E). 8. We have carefully considered the rival submissions and perused the material available on record. The scheme of section 12AB makes it clear that registration is to be granted after the prescribed authority satisfies itself about the objects of the trust or institution and the genuineness of its activities, and compliance with such other laws as are material for achieving its objects. The scope of enquiry at this stage is therefore limited and does not extend to examination of actual application of income in a particular manner or to hypothetical future conduct of the trust. 9. The Hon’ble Supreme Court in Dawoodi Bohara Jamat (364 ITR 31) has held that even where the objects of a trust are for the benefit of a particular community, registration cannot be denied at the threshold, and the applicability of Section 13 is to be examined at the stage of assessment. Similarly, the Hon’ble Delhi High Court in M.K. Nambyar Saheb Law Charitable Trust (269 ITR 556) has held that the registration authority cannot reject registration based on presumptions or apprehensions of future violations. 10. In the present case, a perusal of the impugned order shows that the Ld. CIT(E) has proceeded substantially on the basis of apprehended future application of funds outside India and possible violation of Section 13(1)(b). Such an approach, in our considered view, travels beyond the permissible limits of enquiry under Section 12AB. The Act itself provides adequate safeguards by way of cancellation of Printed from counselvise.com ITA Nos.4928 & 4930/M/2025 Global Council of Zoroastrians Trust 5 registration under Section 12AB(4) if the trust actually violates the statutory conditions in future. 11. Having regard to the totality of facts and the judicial precedents, we are of the considered opinion that the impugned orders dated 25.06.2025 cannot be sustained in their present form. 12. Accordingly, we set aside the orders passed by the Ld. CIT(E) rejecting the assessee’s applications under section 12AB and restore the matter to the file of the Ld. CIT(E) for fresh consideration in accordance with law, after affording reasonable opportunity of being heard to the assessee. The Ld. CIT(E) shall confine the examination strictly to the parameters laid down under the respective provisions. I.T.A. No.4928/Mum/2025 13. The application under Section 80G has been rejected consequent to the rejection of registration under Section 12AB. As the matter relating to Section 12AB has been restored to the file of Ld. CIT(E) for fresh consideration, this appeal is also restored to the file of Ld. CIT(E). 14. In result, both the appeals filed by the assessee are allowed for statistical purposes. Order pronounced in the open court on 06/02/2026 at Mumbai. Sd/- Sd/- (SAKTIJIT DEY) VICE PRESIDENT (JAGADISH) ACCOUNTANT MEMBER Mumbai, Dated: 06/02/2026. Ashwani Rao Sr. Private Secretary Printed from counselvise.com ITA Nos.4928 & 4930/M/2025 Global Council of Zoroastrians Trust 6 Copy of the order forwarded to: 1. Appellant 2. Respondent 3. The CIT 4. The CIT (Appeals) 5. The DR, I.T.A.T. By order (Assistant Registrar) ITAT, Mumbai Printed from counselvise.com "