SARASWATI VEDIC SANSTHA,FARIDABAD V. CIT EXEMPTION, CHANDIGARH

ITA 5465/DEL/2025

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Saraswati Vedic Sanstha, an organization running an orphanage for poor girls, appealed against the decision of the Commissioner of Income Tax (Exemptions), Chandigarh, which granted them 80G registration effective from Assessment Year 2026-27 instead of the requested 2025-26. The organization argued that the delay in processing their application should not affect the retrospective approval of their 80G registration, citing procedural defects and amendments in the Income Tax Act. The Tribunal considered the organization's long-standing charitable activities and the procedural complexities introduced by recent amendments to the Act.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 840108 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2025-2026
• Appeal Filed On: 02-09-2025
• Other Referred Cases: Sri Nrisimha Priya Charitable Trust v. CBDT [2024] 161 taxmann.com 209 (Mad.)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: JITENDER WADHWA
• Keywords: Condonation of delay; Set aside; Retrospective amendment; Charitable institution; Procedural lapse
• Section: 12A; 80G

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘F’: NEW DELHI BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No.5465/Del/2025 (ASSESSMENT YEAR: 2025-26) Saraswati Vedic Sanstha, H.No.461A, Sector-15, Faridabad-121001, Haryana. PAN-AAETS6640J Vs. CIT (Exemption), Chandigarh. (Appellant) (Respondent) Assessee by Shri Jitender Wadhwa, CA Department by Ms. Monika Singh, CIT-DR Date of Hearing 20.01.2026 Date of Pronouncement 25.02.2026 O R D E R PER VIMAL KUMAR, JM: This appeal filed by the Assessee is against the order of Learned Commissioner of Income Tax (Exemptions), Chandigarh [hereinafter referred to as ‘the Ld. CIT(E)’] passed u/s 250 of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’), through which application under clause (ii) of 2nd Proviso to Section 80G(5) of Income Tax Act was approved for Assessment Year 2026-27 to 2030-31 instead of granting approval w.e.f Assessment Year 2025-26. 2. Brief facts of the case are that applicant is running an orphanage for poor girls since 09.07.2022. Provisional registration u/s 12A was effective from AY 2021-22 to AY 2023-24. Provisional approval u/s 80G was effective from 31.12.2021 to AY Printed from counselvise.com 2 ITA No.5465/Del/2025 Saraswati Vedic Sanstha vs. CIT(E) 2024-25. The applicant filed application for registration under 80G on 03.11.2024 but same was rejected on 18.03.2025 as the applicant had no valid registration u/s 12A. The procedural defect was corrected and the applicant refiled 10AB for approval u/s 80G w.e.f AY 2025-26 on 18.05.2025. Ld. CIT(E) granted registration u/s 80G vide order dated 20.08.2025 w.e.f Assessment Year 2026-27 to 2030-31 instead of approval from Assessment Year 2025-26. 3. Being aggrieved applicant preferred present appeal on following grounds: “1) That the Ld. CIT(E) has erred in rejecting the initial application of 80G approval on 18.03.2025 made by the applicant on 03.11.2024 citing that applicant lacks regular 12A registration. The Ld. CIT(E) ignored the facts that applicant society is running its charitable society since 09.07.2002 and Prior to the Income Tax Act, 1961 amendments effective from April 1, 2021, the Society held valid permanent registrations under both Section 12A and Section 80G of the Act. 2) That the Ld. CIT(E) has erred in granting registration under section 80G of the Income Tax Act, 1961 effective from AY 2026-27 instead of AY 2025-26, despite the fact that the assessee society had specifically applied for registration from AY 2025-26. Reliance is also placed on the Judgment of Hon'ble Madras High Court in case of Sri Nrisimha Priya Charitable Trust v. CBDT [2024] 161 taxmann.com 209 (Mad.) 3. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other. Prayer: It is prayed to provide the retrospective effect of the existing 80G approval to commence from FY 2024-25; or To allow the appeal of the assessee with the Condonation of delay on account of rejection of 80G approval on 18.03.2025.” 4. Ld. Authorized Representative for applicant submitted that due to amendment retrospective that Section 80G(5) proviso mandates approval where 12A registration exists, ensuring donors' benefits under Section 80G(1). Post-Finance Act 2020 amendments, 12A/12AB registration is prerequisite for 80G, but rejection on this ground alone implies curative effect upon subsequent 12A grant. The scheme under Printed from counselvise.com 3 ITA No.5465/Del/2025 Saraswati Vedic Sanstha vs. CIT(E) first proviso to Section 80G(5) (clauses i-iv) treats prior rejections due to procedural defects (like missing 12A) as rectifiable, with approval effective from the original application date to prevent litigation and hardship. Judicial Precedents Supporting Retrospectivity  Loyola Charitable Society v. CIT(E) (ITAT Kolkata, 2024): ITAT directed treating misfiled 80G applications under correct clause (1) for existing entities, remanding for approval from original period, ignoring technical defects.  Friends of Kolkata (ITAT Kolkata, 2024, ITA 105/Kol/2024): Technical errors in clause selection (e.g., (iii)/(iv) instead of (i)) not fatal; CIT(E) must consider merits for old trusts, granting approval as filed within extended timelines. These rulings affirm that post-12A grant, 80G operates from the AY of original filing to uphold donors' rights and statutory intent. 4.1 Appellant incorporated on 09.07.2002 as society managing orphanage for poor girls, providing shelter, education, food, maintenance, and marriage support objects purely charitable under Section 2(15). 4.2 Holds valid final registration u/s 12AB and prior 80G approval till A.Y. 2024- 25 and the objects remained unchanged since inception. 4.3 Only because of procedural lapse during the transition uncertainties, the approval u/s 80G cannot be denied to the assessee as there is no change in objects/activities and the correct form was also filed as soon as the defect was known. Printed from counselvise.com 4 ITA No.5465/Del/2025 Saraswati Vedic Sanstha vs. CIT(E) 4.4 Denial of 80G approval for the A.Y. 2025-26 effects the corresponding deductions of the donors also, spelling hardship for poor girls' welfare. 4.5 Reliance is also placed on the Judgment of Hon'ble Madras High Court in case of Sri Nrisimha Priya Charitable Trust v. CBDT [2024] 161 taxmann.com 209 (Mad.) 5. The Learned Departmental representative submitted that the assessee's reliance on pre-2021 permanent registration status is statutorily untenable. The Finance Act 2020 fundamentally restructured the registration regime by introducing Section 12AB and mandating fresh registration for ALL entities by 30.06.2021-a mandatory compliance threshold, not optional. The assessee's perpetual registration automatically lapsed on 01.04.2021. By filing its first 80G application on 03.11.2024 (approximately 3.5 years after the statutory deadline), the assessee had no valid 12AB registration. The CIT(E)'s rejection on 18.03.2025, citing lack of regular 12AB registration, was statutorily justified and procedurally sound. Historical charitable activities, while commendable, cannot revive extinguished registration rights under a materially amended statutory framework. A. Statutory Framework Rule 11AA of the Income Tax Rules, 1962, as amended by CBDT Notification GSR 399(E) dated 30.05.2023, expressly provides: \"provisional approval shall be effective from the assessment year relevant to the previous year in which such application is made.\" The effective AY is determined by the CIT(E) based on the FY in which the approval order is processed, NOT by the assessee's stated preference in Form 10A. Printed from counselvise.com 5 ITA No.5465/Del/2025 Saraswati Vedic Sanstha vs. CIT(E) B. Form 10A vs. Statutory Determination The assessee conflates two distinct procedural elements: (1) the optional form-field preference (assessee's request), and (2) the CIT(E)'s statutory determination of effective AY (regulatory authority's binding decision). The form-field does not override statutory procedure. Section 12AB(1) and Rule 11AA vest the CIT(E) with delegated authority to determine the effective AY. which authority the CIT(E) exercised properly by specifying AY 2026-27 (the AY relevant to the FY 2025-26 in which the approval order was processed on 20.08.2025). C. Inapplicability of Sri Nrisimha Priya Charitable Trust v. CBDT The assessee's reliance on the Madras High Court's decision is fundamentally misplaced due to decisive factual and legal distinctions: Aspect Sri Nrisimha Priya (That Case) Saraswati Vedic Sanstha (Present Case) Petitioner Status Newly constituted trust (09.09.2021) Existing entity (since 02.07.2002) Challenge Discriminatory administrative timelines in CBDT Circular 6/2023 Effective AY specified in a granted approval order Nature of Issue CBDT’s classification fairness (Article 14) Statutory effective AY determination under Rule 11AA Approval Status Extension of deadline to file applications Retrospective effectiveness (not statutorily authorized) Approval Status Approval eligibility in question Approval already granted; dispute only on effective date The Madras HC addressed discriminatory administrative timelines not substantive effective AY determination under Rule 11AA. The court did not rewrite Rule 11AA or authorize retrospective effectiveness. The judgment's scope is confined to considering applications \"as within time\"; it does not mandate retroactive dating of approvals once orders are passed. Fundamentally, tax registration statutes are Printed from counselvise.com 6 ITA No.5465/Del/2025 Saraswati Vedic Sanstha vs. CIT(E) interpreted strictly in favor of the Crown. Retrospective relief is disfavored absent explicit statutory authority, which Rule 11AA does not provide. D. No Statutory Authority for Retrospective Approval Section 80G(5) and Rule 11AA contain no provision for granting retrospective approval or altering effective AYs post-order. Under expressio unius est exclusio alterius, the absence of retrospective authority precludes retrospective approval. The assessee's prayer for \"retrospective effect from FY 2024-25\" seeks relief the statute neither contemplates nor permits. E. Assessee's Own Non-Compliance the Causal Factor The assessee's procedural delays (missing the 30.06.2021 revalidation deadline by 3.5 years) caused the situation. Financial hardship to donors flows from the assessee's non-compliance, not from the CIT(E)'s proper application of Rule 11AA. Equity does not compel retrospective relief to remedy consequences of statutory non-compliance. 6. From examination of record in light of aforesaid rival contention, it is crystal clear that applicant charitable society is running an orphanage for the poor girls since its incorporation 09.07.2022 under the name Arya Kanya Sadan. From 01.04.2021, the Society held valid permanent registration under both Section 12A and Section 80G of the Act. Following the introduction of the 2021 amendments, and amidst significant lack of clarity regarding the new procedural requirements, the Society mistakenly applied for provisional registration under both sections. Applicant filed for final registration u/s 80G for Assessment Year 2025-26 on 03.011.2024 which was rejected by Ld. CIT(E) on 18.03.2025 citing the reason that applicant society of the lacks regular 12AB registration. The Ld. CIT(E) erred in not considering the fact that the applicant held valid permanent registration both u/s 12A and 80G of the Act. Printed from counselvise.com 7 ITA No.5465/Del/2025 Saraswati Vedic Sanstha vs. CIT(E) The applicant reapplied for the Final Registration u/s 80G on 18.05.2025 for Assessment Year 2025-26. Ld. CIT(E) granted registration u/s 80G vide order dated 20.08.2025 w.e.f Assessment Year 2026-27 instead of 2025-26. 6.1 As per ratio of judgement of Hon’ble High Court of Madras in the case of Sri Nrisimha Priya Charitable Trust vs. CBDT [2024] 161 taxmann.com 209 (Mad.) merit based adjudicated, it is well settled that without penalizing delays stemming from genuine filing errors, rejecting artificial classifications that undermine charitable objects-precisely the CIT(E)’s error in restricting approval to A.Y.2026- 27 solely on “prior rejection” without hearing or substantive review. 6.2. In view of the above material facts and well settled principle of law, in interest of justice, the impugned order dated 20.08.2025 granting approval from 2026-27 to 2030-31 is required to be modified w.e.f Assessment Year 2025-26. In view of the above material facts, it is considered expedient to set aside the impugned order dated 20.08.2025 of Ld. CIT(E ) and restore the matter to the file of Ld. CIT(E) for passing of fresh order in light of above observations and affording fair opportunity of hearing to the applicant. 7. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order is pronounced in the Open Court 25.02.2026. Sd/- Sd/- -/- (S. RIFAUR RAHMAN) (VIMAL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated:25.02.2026 *PK, Sr. Ps* Printed from counselvise.com 8 ITA No.5465/Del/2025 Saraswati Vedic Sanstha vs. CIT(E) Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Printed from counselvise.com "