Ram Niwas Modi Charitable Society vs CIT-Exemption: ITAT Jaipur on Section 80G Approval and Jurisdictional Error

This case concerns Ram Niwas Modi Charitable Society, a charitable trust based in Kota, Rajasthan, which filed two appeals before the Income Tax Appellate Tribunal, Jaipur, challenging orders passed by the Commissioner of Income Tax (Exemptions), Jaipur, that rejected its application for approval under Section 80G of the Income Tax Act and cancelled its provisional 80G approval. The case is significant for charitable organisations and their advisers because it highlights the consequences of a CIT(E) treating an application filed under one statutory provision as if it were filed under a different provision — and then purporting to act on that mistaken characterisation.

This page is a research summary of one specific Indian tax judgment, NOT legal advice. Always verify against the full judgment and consult a professional for case-specific guidance.

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The case at a glance

• Parties: Ram Niwas Modi Charitable Society, Kota vs CIT-Exemption, Jaipur, Jaipur
• Bench: Income Tax Appellate Tribunal - Jaipur
• Date: 20 November 2025
• Court level: Tribunal (ITAT)
• Sections engaged: 80G, 12A
• Outcome: Taxpayer succeeded

Research note on dispositive tail: The dispositive portion of the order reproduced in the source record ends mid-sentence — "the application for the recognition of the trust has not been dealt w[ith]" — and does not contain a closing operative line such as "the appeal is allowed". The stored classification outcome_direction: "Taxpayer succeeded" is retained as the outcome label on the basis of the outcome field (result: "taxpayer_won") and the Tribunal's reasoning that the CIT(E) had not in fact dealt with the 80G application on its merits at all. No contradictory dispositive line is present in the tail; accordingly, "Taxpayer succeeded" governs.

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Facts of the case

Ram Niwas Modi Charitable Society (PAN: AAATR8150J), with its address at 152, Modi House, Gumanpura, Kota, filed an online application in Form No. 10AB seeking approval under Section 80G of the Income Tax Act on 26 June 2024. Following the filing, the CIT(E), Jaipur, issued a notice on 15 July 2024 requiring the society to submit documents and explanations by 1 August 2024. The society requested an adjournment. A reminder notice was issued on 26 October 2024, requiring complete details by 5 November 2024. The society submitted a reply on 4 November 2024, upon examination of which the CIT(E) noted several discrepancies — including non-furnishing of expense details, ledger accounts, bills and vouchers, beneficiary details, professional charges and salary particulars, bank transaction details above ₹20,000, and a comparative fee chart for similar institutions in the area. A show-cause notice was issued on 8 December 2024, fixing a hearing on 12 December 2024, and the society responded on that date. The CIT(E) found the reply not tenable.

By order dated 31 December 2024, the CIT(E) rejected the society's application — but critically, the rejection order was framed as if the application had been filed for registration under Section 12AB of the Act, not for approval under Section 80G. Paragraph 6 of that order further purported to cancel the society's provisional registration under Section 12A and stated that the provisional registration stood lapsed. Against this order, the society filed ITA No. 118/JPR/2025.

Subsequently, the CIT(E), having apparently recognised the error in paragraph 6, passed a revised order on 3 April 2025 correcting that paragraph to refer to the second proviso to Section 80G(5) and to the cancellation of the society's provisional approval under Section 80G dated 10 March 2022 (the source records the date of provisional approval as 10.03.2022 in the CIT(E)'s original order and as 10.03.2023 in the grounds raised in ITA No. 779/JPR/2025 — the discrepancy is apparent on the face of the source record). Against this revised order, the society filed ITA No. 779/JPR/2025. Both appeals were heard together on 23 September 2025 and disposed of by a common order pronounced on 20 November 2025.

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Issues raised

• Whether the CIT(E)'s order dated 31 December 2024, which rejected the society's Section 80G application by treating it as an application for registration under Section 12AB, was without jurisdiction, non-est, and liable to be quashed.
• Whether the cancellation of the society's provisional approval/registration — effected through an order that was itself predicated on a mistaken characterisation of the application — was valid in law.
• Whether the revised order dated 3 April 2025, which corrected paragraph 6 of the earlier order to reference Section 80G(5) instead of Section 12AB, cured the jurisdictional defect, or whether the original error meant that the 80G application had still not been adjudicated on its merits.
• Whether the original order dated 31 December 2024 was passed beyond the statutory six-month period prescribed under the Act, making it liable to be quashed on limitation grounds.

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What the court held

The Tribunal, in its common order, took note of the central finding that emerges from the record: the CIT(E), though seized of an application for approval under Section 80G of the Act, dealt with the application in his order of 31 December 2024 as though it were an application for registration under Section 12AB. The order rejected the society's claim on grounds going to registration under 12AB — non-genuineness of activities, profitability, benefit to interested persons, and registration under the Rajasthan Public Trust Act, 1959 — and then purported to cancel the provisional registration under Section 12A. The Tribunal observed that the CIT(E) subsequently recognised "that apparent error" and passed the revised order of 3 April 2025 to correct paragraph 6.

The Tribunal's analysis, as reproduced in the source order, concludes that "effectively as is evident from the record the application for the recognition of the trust has not been dealt w[ith]" — meaning that the Section 80G application was never adjudicated on its merits by the CIT(E). The source record at this point is cut off. The outcome classification recorded in the source is that the taxpayer succeeded — consistent with the Tribunal's observation that the CIT(E)'s orders, taken together, did not constitute a lawful disposal of the society's 80G application.

The Tribunal's hearing proceeded with the consent of both parties, with ITA No. 118/JPR/2025 treated as the lead case. The bench comprised Dr. S. Seethalakshmi (Judicial Member) and Shri Rathod Kamlesh Jayantbhai (Accountant Member), with the order authored by the Accountant Member. The assessee was represented by Shri Mahendra Gargieya, Advocate, and Shri Devang Gargieya, Advocate; the Revenue was represented by Mrs. Anita Rinesh, JCIT.

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Strategy observations

1. Two separate appeals were filed to address two separate orders. ITA No. 118/JPR/2025 challenged the original order dated 31 December 2024, and ITA No. 779/JPR/2025 challenged the revised order dated 3 April 2025. Filing both appeals ensured that the corrected order — which introduced new operative content by substituting a reference to Section 80G(5) for one to Section 12AB — did not go unchallenged.

2. The jurisdictional ground was raised as the primary ground in both appeals. Ground 1 in each appeal contended that the impugned orders were "non-est, bad in law and on facts of the case, for want of jurisdiction." The Tribunal's analysis focused squarely on the CIT(E)'s mischaracterisation of the nature of the application — a jurisdictional defect — rather than on the merits of whether the society's activities were genuinely charitable.

3. A limitation ground was separately pleaded in ITA No. 118/JPR/2025. Ground 5 of that appeal contended that the order dated 31 December 2024 was issued beyond the statutory six-month period. Raising limitation as an independent, alternative ground meant that the appeal rested on more than one basis for quashing the impugned order.

4. The alternative ground of deemed approval was also pressed. Both sets of grounds included a plea that if no order denying Section 80G approval had been lawfully passed on the pending application of 26 June 2024, the absence of such an order should be declared as a deemed grant of approval. This reflects how the grounds were structured before the Tribunal, as recorded in the source order.

5. Both appeals were heard together with the consent of parties, and a common order was passed. This procedural consolidation, recorded in paragraph 3 of the order, is consistent with the Tribunal's practice where the issues in multiple appeals filed by the same assessee are identical in nature.

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Why this case matters

This case illustrates the consequences that can follow when a statutory authority exercises a power under the wrong provision of the Act. The CIT(E) had before it an application for approval under Section 80G(5) filed through Form 10AB; his order of 31 December 2024 rejected it on grounds that went to registration under Section 12AB and purported to cancel a provisional registration under Section 12A — not a provisional approval under Section 80G. The Tribunal's observation that the 80G application had "not been dealt with" on its merits, even after the CIT(E) passed a corrected order on 3 April 2025, is significant: it means that a correction order that changes the statutory reference in the operative paragraph does not retroactively constitute a lawful adjudication of the original application.

For charitable institutions and their representatives, this case is a record of how a single administrative error — treating an 80G application as a 12AB application — can result in the cancellation of a provisional approval that the institution had held since 2022, necessitating two rounds of litigation before the Tribunal to obtain relief. The case also illustrates the procedural architecture of the charitable exemptions regime under the current statutory framework: provisional approvals and provisional registrations are distinct instruments under distinct provisions, and orders purporting to cancel one cannot be sustained when they were made in the context of proceedings concerned with the other.

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Source

This case is drawn from the TaxNoticeAI structured legal corpus (16,101 Indian tax judgments, CBIC circulars, ITAT rulings, AAR rulings, GSTAT rulings), sourced from indiankanoon.org and official court portals.

Original document: https://indiankanoon.org/doc/126236648/