Filing Under Wrong Clause in Form 10AB Cannot Be Ground to Reject Section 80G Approval: ITAT Pune

Overview of the Case

The Income Tax Appellate Tribunal, Pune Bench, rendered a significant decision in Infant India Vs CIT (Exemption) (ITA No. 3196/PUN/2025), dated 08/06/2026, addressing a recurring practical difficulty faced by charitable trusts navigating the post-2021 registration and approval regime under the Income Tax Act, 1961. The Tribunal set aside the order of the Commissioner of Income Tax (Exemptions) ["CIT(E)"], Pune, which had declared Infant India's application for approval under Section 80G as non-maintainable, and directed the authority to reconsider the matter on its substantive merits.

The core issue before the Tribunal was whether a charitable trust's application for Section 80G approval could be outrightly rejected on procedural and technical grounds — specifically the selection of an incorrect clause in Form No. 10AB — without any inquiry into or adverse finding on the genuineness of its charitable activities.

Background and Facts of the Case

Infant India, a trust engaged in charitable activities, had originally secured approval under Section 80G on 31/05/2010. With the overhaul of the registration and approval framework for charitable institutions introduced through the Finance Act, 2020 (effective from 01/04/2021), the trust was required to re-register and obtain fresh approvals under the revised statutory scheme.

In the context of the new regime, the trust obtained a provisional approval dated 24/09/2021 under Section 80G(5) read with clause (iv) of its first proviso. The assessee later submitted that even this provisional approval had been obtained inadvertently under the wrong clause, given that the trust was already in existence and was actively conducting charitable activities well before the date of provisional approval. For a trust already in operation, the applicable clause would not have been the one meant for newly established institutions.

Subsequently, the assessee filed Form No. 10AB on 09/10/2024 seeking regular approval under Section 80G. However, owing to the same confusion arising from the portal-driven clause structure, the application was again filed under clause (ii) of the first proviso to sub-section (5) of Section 80G — a clause applicable to renewal of regular (not provisional) approval. The assessee contended that this incorrect clause selection was inadvertent and was directly attributable to the sudden and unannounced departure of the Chartered Accountant who had been handling the trust's compliance affairs, leaving the organization without access to critical documents, login credentials, and requisite information.

Proceedings Before the CIT(E)

Upon receiving the Form No. 10AB application, the CIT(E) initiated verification by issuing a notice on 28/11/2024 through the ITBA portal, calling upon the assessee to upload specified information and clarifications by 17/12/2024.

After examining the documents filed in response, the CIT(E) identified several discrepancies and issued a further notice dated 04/03/2025, requiring compliance by 10/03/2025. The discrepancies pointed out included: