ITAT Guwahati: Existing Final 80G Approval Renders Subsequent Rejection Order Unsustainable

Background and Context

The decision of the ITAT Guwahati Bench (sitting at Kolkata) in Mercy Home Vs ITO deals with an important procedural issue under Section 80G of the Income Tax Act 1961:

  • How should the authority handle multiple approval orders, including provisional and final Section 80G certificates, issued to the same charitable institution?
  • Can a later rejection order validly stand when a wider, subsequent approval under Section 80G already covers the relevant assessment years and has not been cancelled?

The ruling clarifies that once a valid, subsisting Section 80G approval is in force for a given period, a later order passed in disregard of that approval—seeking to deny or nullify that very period—cannot be sustained.

Brief Facts of the Case

Initial Provisional Approval

  • The assessee, Mercy Home, is a charitable institution.
  • It obtained provisional approval under Section 80G(5)(iv) by an order dated **11.03.2023`.
  • This provisional approval was expressly valid from 11.03.2023 up to AY 2025-26.

Subsequent Final 80G Approval

  • On **15.11.2024`, a separate certificate was issued to the assessee.
  • This later certificate granted Section 80G approval **for AYs 2023-24 to 2027-28`.
  • There was no material on record to show that this certificate dated 15.11.2024 had ever been withdrawn, cancelled, or modified by the Department.
  • As a result, as on the date of subsequent proceedings, the assessee held a valid and subsisting 80G approval covering AYs 2023-24 to 2027-28, including AY 2026-27.

Filing of Form 10AB and CIT(E)’s Rejection

Despite having the approval dated 15.11.2024, the assessee electronically filed Form 10AB on 02.09.2025, seeking regular approval under Section 80G(5)(ii).

The CIT(E), Kolkata examined this Form 10AB **only with reference to the earlier provisional approval order dated 11.03.2023. Key observations of the CIT(E)` were:

  • The assessee had already commenced its charitable activities prior to the date of application.
  • Therefore, the assessee was required to file Form 10AB:
    • either within the extended due date of 30.06.2024 as per CBDT Circular No. 7/2024, or
    • at least six months before expiry of the provisional approval period, whichever was applicable.
  • Since Form 10AB was filed only on 02.09.2025, the CIT(E) treated it as time-barred.

On this basis, the CIT(E) rejected the application by order dated 17.03.2026, thereby denying regular Section 80G approval on grounds of limitation.

Appeal Before the Tribunal

The assessee challenged the rejection order of the CIT(E) before the ITAT for AY 2026-27, raising multiple grounds including:

  • incorrect appreciation of facts,
  • mechanical rejection on technical grounds,
  • non-consideration of charitable activities, objects and financials,
  • misapplication of the limitation provisions under Section 80G(5)(iii), and
  • failure to take into account the later certificate dated 15.11.2024 which extended approval up to AY 2027-28.

Key Issues for Determination

The Tribunal identified and focused primarily on the following questions:

  1. Whether the CIT(E) was justified in rejecting Form 10AB as belated by examining only the provisional approval dated 11.03.2023, while ignoring the subsequent certificate dated 15.11.2024 granting approval up to AY 2027-28.

  2. Whether the appeal for AY 2026-27 had become infructuous, since AY 2026-27 already stood covered by the subsisting certificate dated 15.11.2024.

  3. Whether any part of the CIT(E)’s order dated 17.03.2026 required to be quashed, given the overlapping and wider coverage of the later approval.

The Tribunal ultimately found it unnecessary to adjudicate on all the other broader grounds (technical, procedural, and merits) once the impact of the 15.11.2024 certificate was fully appreciated.

Assessee’s Submissions Before ITAT

The assessee argued, in substance, as follows: