SHRI BHAIRAVNATH MANDIR,SANGLI V. CIT(EXEMPTION), PUNE, PUNE

ITA 2133/PUN/2025

AI Insights

The case involves Shri Bhairavnath Mandir, a public charitable trust, which appealed against the decision of the Commissioner of Income Tax (Exemption), Pune, who had rejected the trust's application for approval under Section 80G(5)(iv) of the Income Tax Act, 1961. The rejection was based on the grounds that the trust did not submit the registration under Section 12A/12AA of the Act before the specified date, despite having a valid registration under Section 12AB. The Tribunal examined the submissions, including various judicial precedents, and found that the CIT (Exemption) had erred in law by rejecting the application on these grounds.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 841929 (ITAT-PUNE)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 12-09-2025
• Other Referred Cases: Ananda Social & Educational Trust Vs. CIT, CIT Vs. M/s. Adarshila Shikshan Sangh, Radhasoami Satsang Vs. CIT, Hiralal Bhagwati v. Commissioner of Income Tax, Commissioner of Income-Tax (Exemptions) v. Sant Girdhar Anand Parmhans Sant Ashram, Assistant Commissioner of Income Tax v. Surat City Gymkhana, Ahmedabad Urban Development Authority v. Deputy Director of Income-Tax (Exemption)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT BOBDE
• Assessee Lawyers: B.C. MALAKAR
• Keywords: Set aside; Question of law; Charitable institution; Cancellation of registration; Benefit of exemption
• Section: 12AA; 12A; 80G

Judgement Text

" आयकर अपीलीय अधिकरण “बी” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / ITA No.2133/PUN/2025 Shri Bhairavnath Mandir, Bhairavnath Mandir Bamnoli, Kupwad, Taluka Miraj, Dist.-Sangli, Sangli-416436 PAN : AAQTS4666J Vs. CIT Exemption, Pune अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri B.C. Malakar Department by : Shri Amit Bobde Date of hearing : 09-02-2026 Date of Pronouncement : 23-02-2026 आदेश / ORDER PER ASTHA CHANDRA, JM : The appeal filed by the assessee is directed against the order dated 21.08.2025 of the Ld. Commissioner of Income Tax (Exemption), Pune [“CIT(E)”] whereby he rejected the application of the assessee filed before him on 21.03.2025 in Form No. 10AB under sub clause (B) of clause (iv) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961 (the “Act”). 2. Briefly stated, the facts of the case are that the assessee is a public charitable trust registered under the Bombay Trust Act, 1950 since 1975. The assessee was granted provisional approval u/s 80G(5) of the Act from 24.05.2022. Thereafter, the assessee trust applied for regular approval/ registration in Form No. 10AB on 21.03.2025 under the provisions of section 80G(5)(iv)(B) of the Act. On receipt of the assessee’s application along with annexures thereto, with a view to verify the genuineness of the activities of the assessee and fulfillment of the conditions laid down in Printed from counselvise.com 2 ITA No.2233/PUN/2025 clauses (i) to (v) of section 80G(5) of the Act a notice was issued through ITBA portal on 02.05.2025 requesting the assessee to upload certain information/clarification contained therein, seeking compliance by 19.05.2025. The assessee sought adjournment which was granted till 03.06.2025. On verification of the details/documents submitted by the assessee, in response thereto the Ld. CIT(E) noticed certain discrepancies (reproduced below) which was communicated to the assessee vide notice dated 07.07.2025, the compliance to which was sought on 15.07.2025 : \"(i) As per the activity note, you conducted the following activities: 1 blood donation camp, 4 food distribution activity, book distribution, school uniform distribution, social service in school/college, However, complete details of these activities has not been furnished by you viz, details such as the dates, locations, Information on the beneficiarles, how they were identified etc. Also, furnish copies of bills for all expenses incurred for each activity listed in the activity note during this year. Additionally, provide copies of acknowledgment letters from the locations where the activities were conducted. Kindly provide the documents or agreements pertaining to the collaboration between your trust and the hospital or blood bank concerning the organization of the blood donation camp. (ii) Submit detailed information regarding the donations received, including the names of donors, their addresses, PAN numbers, amounts donated, dates of donations, modes of donations, and receipt numbers issued to donors. (iii) It is also seen that you have obtained regular registration in Form 10AC under sub-clause (i) of clause (ac) of sub-section (1) of section 12A dated 07/11/2021. However, you have not furnished the copy of registration under section 12A or 12AA of the Income Tax Act, 1961 prior to 01/04/2021. Kindly furnish the same.” 3. Upon verification of the details/documents furnished by the assessee in response to the above notice, the Ld. CIT(E) observed that the assessee trust was not registered u/s 12A/12AA of the Act prior to 01.04.2021 and having been not satisfied about the genuineness of the activities of the assessee and fulfillment of condition laid down in clause (i) to (v) of section 80G(5) of the Act, he rejected the assessee’s application by observing as under : “6. The assessee responded to the said notice and furnished the compliance on 22/07/2025. Upon verification of the details / documents furnished by the assessee it is seen that the asseseee has obtained regular registration under section 12AB of the Act under clause (i) of section 12A(1)(ac) of the Act but it seems that the assessee trust was not registered under section 12A/12AA of the Act prior to 01/04/2021 since the copy of such registration is neither attached with the original application while applying for such registration nor during the present proceedings. Therefore, it seems that the assessee has obtained the said registration by mis-representation of facts Printed from counselvise.com 3 ITA No.2233/PUN/2025 and the said registration is not a valid registration. Therefore, the condition under clause (i) of section 80G(5) of the Income Tax Act, 1961 is not fulfilled. 7. Considering the above facts discussed in the show notice and discrepancies noticed, the undersigned is not satisfied about the genuineness of activities of the assessee and fulfilment of conditions laid down in clause (i) to (v) of section 80G(5) of the Act. 8. In view of the above, the application dated 21/03/2025 filed under sub clause (B) of (iv) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961 by the assessee is hereby rejected. 4. Aggrieved, the assessee is in appeal before the Tribunal raising the following grounds of appeal : “1. On the facts and in the circumstances of the case and in law, the Hon'ble Commissioner of Income Tax, Exemption, Pune (hereinafter called as CIT Exemption) erred in rejecting the approval sought for under section 80G(5)(iv) of the IT Act, 1961 by the applicant trust vide order dated 21/08/2025 in response to the application made by the appellant for such approval in Form No. 10AB filed by the appellant on 21/03/2025 observing and holding that the appellant had not filed certificate of registration u/s.12A/12AA of the said Act prior to 01/04/2021 either with the application filed or during the proceedings ignoring and without appreciating the facts that such issue of filing/non-filing of certificate of registration u/s.12A/12AA of the Act could not be raised at the time of considering the application for approval u/s.80G(5)(iv) of the Act and was an issue might have been decided while granting regular registration u/s. 12AB r.w.s. 12A(1)(ac) (i) of the Act. The order rejecting the approval u/s.80G(5)(iv) of the Act passed by the CIT Exemption being arbitrary, illegal and bad-in-law be quashed directing him to grant such approval to the appellant. 2. On the facts and in the circumstances of the case and in law, the Hon'ble Commissioner of Income Tax, Exemption, Pune (hereinafter called as CIT Exemption) erred in rejecting the approval sought for under section 80G(5)(iv) of the IT Act, 1961 by the applicant trust vide order dated 21/08/2025 in response to the application made by the appellant for such approval in Form No. 10AB filed by the appellant on 21/03/2025 observing and holding that the appellant had not filed certificate of registration u/s.12A/12AA of the said Act prior to 01/04/2021 either with the application filed or during the proceedings ignoring and without appreciating the facts that unless the necessary conditions were fulfilled by the applicant trust for availing of the regular registration under section 12AB of the Act under clause (1) of section 12A(1)(ac) of the Act, such registration could not be granted by the prescribed authority and therefore when such registration u/s. 12AB of the Act for the relevant period (i.e. 24- 05-2022 to AY 2025-2026) was granted by the prescribed authority, and all other conditions for granting approval u/s.80G(5) of the Act had been complied by the appellant, the CIT Exemption could not reject the application filed by the appellant for approval under the said section. The order rejecting the approval u/s.80G(5)(iv) of the Act passed by the CIT Exemption being arbitrary, illegal and bad-in-law be quashed directing him to grant such approval to the appellant. Printed from counselvise.com 4 ITA No.2233/PUN/2025 3. On the facts and in the circumstances of the case and in law, the Hon'ble Commissioner of Income Tax, Exemption, Pune (hereinafter called as CIT Exemption) erred in rejecting the approval sought for under section 80G(5)(iv) of the IT Act, 1961 by the applicant trust vide order dated 21/08/2025 in response to the application made by the appellant for such approval in Form No. 10AB filed by the appellant on 21/03/2025. observing and holding that the appellant had not filed certificate of registration u/s.12A/12AA of the said Act prior to 01/04/2021 either with the application filed or during the proceedings ignoring and without appreciating the facts that unless such registration u/s.12A/12AA of the Act had been obtained by the appellant (which in fact was granted by the CIT Exemption, Pune vide No. AAQTS4666JE20211 Dated 07/11/2021) and the same had not been considered while granting regular registration u/s.12AB r.w.s. 12A(1)(ac)(i) of the Act, the appellant could not be granted registration u/s.12AB of the Act by the prescribed authority. The order rejecting the approval u/s.80G(5)(iv) of the Act passed by the CIT Exemption being arbitrary, illegal and bad-in-law be quashed directing him to grant such approval to the appellant. 4. On the facts and in the circumstances of the case and in law, the Hon'ble Commissioner of Income Tax, Exemption, Pune (hereinafter called as CIT Exemption) erred in rejecting the approval sought for under section 80G(5)(iv) of the IT Act, 1961 by the applicant trust vide order dated 21/08/2025 in response to the application made by the appellant for such approval in Form No. 10AB filed by the appellant on 21/03/2025 observing and holding that the appellant had not filed certificate of registration u/s.12A/12AA of the said Act prior to 01/04/2021 either with the application filed or during the proceedings ignoring and without appreciating the facts that the CIT Exemption, Pune while granting approval u/s.80G(5)(iv) of the Act was required to verify and examine whether the applicant trust had complied all the conditions as prescribed under the said section for being eligible of such approval and not anything else. The order rejecting the approval u/s.80G(5) (iv) of the Act passed by the CIT Exemption even after complying all the requisitions made by the appellant and for non-filing of certificate under section 12A/12AA of the Act granted prior to 01/04/2021 being arbitrary, illegal and bad- in-law be quashed directing him to grant such approval to the appellant. 5. The appellant craves leave to add, alter, delete, amend, withdraw, modify, change or substitute any ground or grounds of appeal or to add any new ground or grounds of appeal during or before the hearing of the appeal.” 5. The Ld. AR submitted that the trust is already registered u/s 12A of the Act and continue to hold a valid certificate for the period from AY 2022- 23 to AY 2026-27. A copy of registration granted by the Pr. CIT/CIT u/s 12A(1)(ac)(i) of the Act dated 07.01.2021 was placed on record by the Ld. AR. He further submitted that the assessee has also been granted approval by the Pr. CIT/CIT u/s 80G(5)(iv) of the Act vide registration certificate dated 02.05.2022 for the period from 24.05.2022 to AY 2025-26, Printed from counselvise.com 5 ITA No.2233/PUN/2025 a copy of the said approval was placed on record by the Ld. AR. He, therefore, submitted that since the assessee holds a valid and subsisting registration u/s 12AB of the Act which has not been cancelled by the Ld. CIT(E) in accordance with the provisions of section 12AB(iv) of the Act, the Ld. CIT(E) should not have denied the approval sought by the assessee u/s 80G of the Act and doubted the genuineness of the activities of the trust. He further submitted that there is no requirement under the provisions of section 80G of the Act r.w. applicable Rule 11AA of the Income Tax Rules, 1962 mandating that the trust must have been registered prior to 01.04.2021. 6. In support of his above contentions, the Ld. AR relied on the following judicial decisions : i. Ananda Social & Educational Trust Vs. CIT (2020) 426 ITR 340 (SC); ii. CIT Vs. M/s. Adarshila Shikshan Sangh, TAX C No. 30 of 2019, order dated 30.07.2025; iii. Radhasoami Satsang Vs. CIT (1992) 193 ITR 321 (SC). 7. The Ld. DR, on the other hand, supported the order of the Ld. CIT(E) but could not brought on record any decision/material to controvert the above submissions of the Ld. AR. 8. We have heard the Ld. Representatives of the parties and perused the material on record. We have also perused the paper book filed by the Ld. AR on behalf of the assessee as well as the judicial precedents cited before us. The facts of the case are not in dispute. We find that the Ld. CIT(E) has rejected the assessee’s application for approval u/s 80G(5) of the Act observing that the assessee was not registered u/s 12A/12AA of the Act prior to 01.04.2021 and that a copy of the regular registration u/s 12A(1)(ac)(i) of the Act was not filed by the assessee during the proceedings before him. The Ld. CIT(E) is also not satisfied about the genuineness of the activities of the assessee and therefore he has rejected the impugned application of the assessee. It is the submissions of the Ld. Counsel for the assessee that the assessee has already been granted regular registration u/s 12A of the Act which is still valid and subsisting till AY 2026-27, a copy of which was placed on record before us. The assessee Printed from counselvise.com 6 ITA No.2233/PUN/2025 has also been provisionally approved u/s 80G(5) of the Act vide registration certificate dated 24.05.2022, a copy of which is placed on record by the Ld. AR (page 1-2 to 106 of the paper book refers). The Ld. AR has also contended that there is no requirement under the provisions of section 80G r.w. applicable Rule 11AA which requires the assessee trust to be registered prior to 01.04.2021. It is his submission that the Ld. CIT(E) has doubted the genuineness of the activities of the trust without bringing on any adverse material on record. 9. We find some force in the arguments advanced by the Ld. Counsel for the assessee. We find that the Hon’ble High Court of Chhattisgarh in the case of Adarshila Shikshan Sangh (supra) under the similar set of facts as that of the present assessee has dismissed the appeal of the Revenue and upheld the order of the Tribunal holding as under : “8. On the other hand, learned counsel appearing for the respondent / assessee supports the order passed by learned ITAT and submits that the donee was duly registered under Section 12A(a) of the Act and yet the benefit under Section 80G(5) was rejected holding that the activities cannot be considered to be charitable. He further submits that benefits under Section 80G of the Act cannot be denied if registration under Section 12AA is intact. He also submits that as long as the registration under Section 12AA is intact there appears to be no logic denying approval under Section 80G(5)(vi) of the Act and as long as the registration under Section 12AA is in existence, further enquiry about the genuineness of the activities and the purpose being charitable cannot be gone into by the Department. He also contended that the registration has been renewed till Assessment Year 2026-27. As such, the appeal deserves to be dismissed. He relied upon the judgment of the Gujarat High Court in the matter of Hiralal Bhagwati v. Commissioner of Income Tax, 2000 SCC OnLine Guj 441, the judgment of the Punjab and Haryana High Court in the matter of Commissioner of Income-Tax (Exemptions) v. Sant Girdhar Anand Parmhans Sant Ashram, 2018 SCC OnLine P&H 7109, the judgment of the Supreme Court in the matter of Assistant Commissioner of Income Tax v. Surat City Gymkhana, (2008) 14 SCC 169 and the judgment of the Gujarat High Court in the matter of Ahmedabad Urban Development Authority v. Deputy Director of Income-Tax (Exemption), (2011) 335 ITR 575. 9. We have heard learned counsel appearing for the parties, perused the impugned order and other documents appended with appeal. 10. In Hiralal Bhagwati (supra), the Gujarat High Court has held as under:- “18. It is also required to be noted that once the registration under section 12A(a) of the Act is granted, the grant of benefit cannot be denied. The Income-tax Officer was not justified in refusing the benefits which would otherwise accrue under the registration. If there was no registration, as contemplated under section 12A(a) read with rule 17A, the Revenue would have been justified in making a submission that the benefit cannot be granted, but where the application for registration is submitted and the registration has been granted, the benefit cannot be denied on the ground that the scheme Printed from counselvise.com 7 ITA No.2233/PUN/2025 is not for the benefit of public at large. 25. Learned counsel submitted that as it is meant for a restricted class, the provisions will not apply and, therefore, the special civil application should be rejected. In our opinion, considering the decisions of the apex Court, referred to hereinabove, and considering the provisions of the Act, the submissions made on behalf of the Revenue have no merits. It must be held that the respondent No. 2 has erred in denying the benefits under the Act. So far as the penalty proceedings are concerned, as a necessary corollary, the same must be quashed and set aside.” 11. In Sant Girdhar Anand Parmhans Sant Ashram (supra), the Punjab and Haryana High Court has held as under:- “6…...Accordingly, it was recorded by the Tribunal that since the assessee had been granted exemption under section 12AA of the Act which was in existence and in case of any violation, the same was subject to variation/withdrawal by the CIT(E), there was no logic in denying approval under section 80G(5)(vi) of the Act. We do not find any reason to differ with the view taken by the Tribunal. Needless to say, in case, in subsequent years, the revenue is satisfied that the activities of the respondentassessee are not qualified for charitable purposes, it shall be open for the department to initiate action for cancellation of registration under section 12AA of the Act and also for passing appropriate orders regarding approval granted under section 80G(5)(vi) of the Act in accordance with law. ” 12. In Surat City Gymkhana (supra), the Supreme Court has held as under:- “5. On a perusal of the judgment of the Gujarat High Court in the case of Hiralal Bhagwati (supra), we now find that Question 'B' is also concluded by the said judgment (refer to 1st paragraph of page ITR p.196). Since the Revenue did not challenge the decision in the said case, the same has attained finality. Question 'B', therefore, is to meet the same fate as Question 'A' as this Court had declined to grant leave in respect of Question 'A' on the ground that the Revenue did not challenge the correctness of the decision in the case of Hiralal Bhagwati (supra). It appears that the fact, that Question 'B' was also covered by the aforementioned judgment, was not brought to the notice of their Lordships and, therefore, leave granted was restricted to question 'B'” 13. In Ahmedabad Urban Development Authority (supra), the Gujarat High Court has held as under:- “11. Applying the ratio enunciated as aforestated to the facts of the present case, it is apparent that while framing Assessment Order on 30-12-2009 it was not open to the Assessing Officer to ignore Certificate of Registration dated 23-10-2003 granted under Section 12-AA of the Act by Director of Income Tax (Exemption), Ahmedabad. Therefore, on this limited count the Assessment Order appears to be without jurisdiction and the demand in pursuance thereto could not have been sought to be recovered. The respondent was therefore duty bound to stay recovery of the demand raised pursuant to Assessment Order dated 30-12-2009 for Assessment Year 2007-2008 till disposal of the First Appeal which is already pending before First Appellate Authority.” 14. In the present case, learned ITAT while allowing the appeal and setting aside the order of learned CIT has held as under:- Printed from counselvise.com 8 ITA No.2233/PUN/2025 “6. We have heard the rival submissions and perused the material available on record. The issue in present grounds is with respect to rejection of application u/s. 80G of the Act. Before us, the Ld. A.R. has submitted that assessee has been granted registration u/s. 12AA of the Act and the registration continues till date and the aforesaid registration has not been cancelled by the Commissioner of Income Tax. The aforesaid contention of the Ld. A.R. has not been controverted by the Revenue. We find that the Agra Bench of the Tribunal in the case of Dr. Gyanendra Goel Foundation Vs. Commissioner of Income Tax (supra) after relying on the decision of Hon'ble Gujarat High Court in the case of Hiralal Bhagwati Vs. Commissioner of Income Tax (supra) in similar circumstance has held that when the Commissioner of Income Tax has granted registration u/s. 12AA after examining genuineness of activities of Trust, and the registration granted has not been revoked or cancelled then it is not proper for Commissioner of Income Tax to reject application of Trust for benefit of exemption u/s. 80G by holding that the activities of the Trust were not genuine. 7. Before us, the Revenue has not pointed out any contrary binding decision nor has placed any material on record to demonstrate that the aforesaid decision of Agra Bench of Tribunal has been set aside by the higher judicial forum. We are therefore, following the decision of Agra Bench of Tribunal and for similar reasons hold that in the present case the Commissioner of Income Tax was not justified in rejecting the application of assessee. We therefore set aside the order of LD. CIT and direct the granting of approval to assessee u/s. 80G of the Act. Thus the grounds of the assessee are allowed. 8. In the result, the appeal of the assessee is allowed.” 15. From perusal of the impugned order, it appears that learned ITAT has held that Revenue / appellant herein has not pointed out any contrary binding decision nor has placed any material on record to demonstrate that the aforesaid decision of Agra Bench of Tribunal has been set aside by the higher judicial forum and following the decision of Agra Bench of Tribunal learned ITAT held that in the present case the Commissioner of Income Tax was not justified in rejecting the application of assessee / respondent herein and set aside the order of learned CIT and directed for grant of approval to assessee under Section 80G of the Act. 16. Considering the submissions advanced by learned counsel appearing for the parties, perusing the order passed by learned ITAT as also the order passed by learned CIT and in view of law laid down the Supreme Court, High Court of Gujarat and High Court of Punjab and Haryana in the above- stated judgments (supra), we are of the considered opinion that learned ITAT while allowing the appeal of the assessee / respondent herein and setting aside the order of learned CIT has not committed any illegality or irregularity. As such, the substantial question of law is answered in favour of the respondent and against the appellant. 17. For the foregoing reasons, the appeal being devoid of merit is liable to be and is hereby dismissed.” 10. In view of the above discussion and decision of the Hon’ble High Court of Chhattisgarh in the case of Adarshila Shikshan Sangh (supra), in our considered opinion, the Ld. CIT(E) is not justified in rejecting the Printed from counselvise.com 9 ITA No.2233/PUN/2025 assessee’s application for grant of approval u/s 80G of the Act. We, therefore, set aside the impugned order of the Ld. CIT(E) and direct him to grant the approval as sought for by the assessee in the application filed in Form 10AB u/s 80G(5)(B)(iv) dated 21.03.2025. The grounds raised by the assessee are accordingly allowed. 11. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 23rd February, 2026. Sd/- Sd/- (Manish Borad) (Astha Chandra) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; दिन ांक / Dated : 23rd February, 2026. रदि आदेश की प्रधिधलधप अग्रेधिि / Copy of the Order forwarded to : 1. अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “बी” बेंच, पुणे / DR, ITAT, “B” Bench, Pune. 5. ग र्ड फ़ इल / Guard File. //सत्य दपि प्रदि// True Copy// आिेश नुस र / BY ORDER, सहायक पंजीकार/ Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune Printed from counselvise.com "