ITAT Mumbai on Section 12AB & Section 80G: Vague Non-Compliance Is Not Sufficient for Rejection

1. Background of the Dispute

The Income Tax Appellate Tribunal, Mumbai Bench, in the case of Rotary Club of Bombay Pier Charities Trust Vs CIT (ITAT Mumbai), dealt with two connected appeals filed by the assessee trust. Both appeals challenged separate but related orders dated 01.03.2026 passed by the CIT(Exemptions), Mumbai in Form No.10AD:

• One order refused renewal of registration under Section 12AB of the Income Tax Act, 1961.
• The other order declined approval under Section 80G(5) of the Act.

Given that both matters arose from the same set of proceedings and involved overlapping facts, the Tribunal heard them together and disposed them of through a consolidated order.

2. Delay in Filing Appeals and Condonation

There was a 7-day delay in filing both appeals before the Tribunal. The assessee moved condonation applications explaining:

• The staff member in charge of filing the appeals was on extended leave.
• The assessee was under a bona fide belief that the appeals had already been filed in time.
• The delay was unintentional and, if not excused, would cause serious prejudice.

The Tribunal, after examining the condonation petitions and applying the settled legal principle that substantive justice should not be defeated by minor technicalities, held that:

• The assessee had demonstrated sufficient cause for the delay.
• The delay of 7 days in both appeals was condoned, and the appeals were admitted for decision on merits.

3. Facts Relating to Renewal Under Section 12AB

3.1 Filing of Application in Form No.10AB

The assessee, a charitable trust, submitted an application for renewal of registration under Section 12AB by filing Form No.10AB on 29.09.2025. The application was made under Section 12A(1)(ac)(ii).

The CIT(E), Mumbai:

• Issued notices dated 09.01.2026 and 23.01.2026,
• Called upon the assessee to produce documents and particulars as mandated by Rule 17A(2) of the Income Tax Rules, 1962.

Subsequently, by order dated 01.03.2026 in Form No.10AD, the CIT(E) rejected the renewal application. The stated reasons were:

• The application was treated as incomplete, and
• The assessee had allegedly not complied with all the terms of the notices issued during the proceedings.

3.2 Grounds Raised by the Assessee

In the appeal challenging rejection of renewal under Section 12AB, the assessee raised detailed grounds, asserting inter alia that:

• The assessee had furnished all documents and information called for by the CIT(E) in response to the notice dated 09.01.2026.
• During the hearing, the assessee had manually submitted, among other things:
  • Registration Certificate from the Charity Commissioner
  • Registration certificates granted for earlier years
  • Note on nature of activities
  • Registration Certificate from FCRA
  • Trust Deed
  • Email IDs and mobile numbers of all trustees along with KYC documents
  • Acknowledgement of renewal application
  • Financial statements for FYs 2022-23 to 2024-25 along with expenditure details relating to the trust’s objects
  • Copies of ITR acknowledgements for the last three years
  • Three years’ annual accounts
  • Darpan registration details
  • Details of Form 10AB