ITAT Delhi Remands Applications Under Sections 12AB and 80G: CIT(E) Orders Found Unclear on Whether Assessee's Replies Were Considered

Case Overview

Case Name: Lotsawa Rinchen Zangpo Education Trust Vs CIT (Exemptions)

Forum: Income Tax Appellate Tribunal, Delhi

Appeal Numbers: ITA No.1137/Del/2026 and ITA No.1138/Del/2026

Date of Order: 03.06.2026

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, recently adjudicated a batch of two interconnected appeals filed by the same assessee. The first appeal, ITA No.1137/Del/2026, arose from an order passed under Section 12AB(1)(b)(ii) of the Income Tax Act, 1961, while the second appeal, ITA No.1138/Del/2026, involved the rejection of an application for approval under Section 80G of the Act. Given the intrinsic connection between the two matters, the Tribunal disposed of both through a consolidated order, ultimately setting aside both impugned orders and remitting the cases to the Commissioner of Income Tax (Exemptions) for fresh adjudication.

Background and Factual Matrix

Nature of the Applications

The assessee, a trust, had filed an application seeking registration under Section 12A(1)(ac)(ii) of the Income Tax Act, 1961, which is governed by the procedural framework of Section 12AB(1)(b)(ii). Simultaneously, the assessee had also applied for approval under Section 80G(5)(ii) of the Act, which enables donors contributing to such trusts to claim deductions on their donations. Both applications were pending consideration before the Commissioner of Income Tax (Exemptions), Delhi.

What Transpired Before the CIT(Exemptions)

In the proceedings pertaining to ITA No.1137/Del/2026, the Commissioner of Income Tax (Exemptions) had reportedly extended several opportunities of hearing to the assessee. According to the lower authority's perspective, none of these opportunities were availed of by the assessee. On account of this alleged non-pursuance, the application filed under Section 12A(1)(ac)(ii) was ultimately rejected on the ground of non-pursuance.

In the connected matter, ITA No.1138/Del/2026, the Commissioner of Income Tax (Exemptions) rejected the application for approval under Section 80G(5)(ii) of the Act on two independent grounds:

1. Non-pursuance of the application by the assessee, and
2. The fact that the application under Section 12AB of the Act had already been rejected, making the Section 80G approval untenable in the absence of valid registration.

Assessee's Contentions Before the Tribunal

The assessee approached the ITAT raising substantive grievances against both orders. The primary contentions advanced before the Bench were as follows: