Approval under section 80G(5)(iii) restored where denial unjustified and department failed to show statutory non-compliance

ITAT DELHI - AT allowed the appeal against denial of approval under s.80G(5)(iii), holding that in the absence of any violation of clause (iv) the denial could not be sustained. The Tribunal relied on the jurisdictional HC precedent with identical facts, found no statutory non-compliance, and noted the Department failed to controvert that ratio or point to any deficit in compliance required for grant of approval. Registration under s.80G(5)(iii) was therefore restored.

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The trust's Form 10AB dated 30.03.2024 for approval under Section 80G(5)(iii) was rejected by the CIT(E) and its provisional registration dated 12.03.2022 (for period 12.03.2022 to AY 2024-25) was cancelled. The assessee submitted audited financials, bank statements with narrations, trustee profiles and other statutory records for 01.04.2023-31.03.2024 and contended there was no contravention of Section 80G. Reliance was placed on the High Court decision in Director of Income Tax v. Neel Gagan Charitable Trust ((2013) 38 taxmann.com 305 (Delhi)) on identical facts. The Revenue did not point to any statutory non-compliance or breach of clause (iv) of Section 80G(5). The Tribunal held the CIT(E)'s action to be "not sustainable, bad in law and therefore, quashed" and directed the CIT(E) to grant the relief; the appeal was allowed.

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