My trust filed Form 10BD for the whole financial year although its s.80G provisional approval began mid-year, so Forms 10BE were generated for pre-approval donations too. The CIT (Exemption) has refused final registration and approval on that ground. Is that a valid reason?
Not on its own. The Indore Bench held that a wrong filing of information in Form 10BD does not mean the trust's activities are not genuine, and that the requirement was new from 1 April 2021 with sub-rule (3)(i) of Rule 18AB in terms speaking of all donations of the same nature paid during the financial year, so a trust could honestly have read it as covering the whole year. Because the trust filed fresh evidence — declarations from donors that they had never been given the Forms 10BE and had claimed no deduction — the matter was remanded for fresh consideration.
Decided by the ITAT (Shri B.M. Biyani, Accountant Member and Shri Paresh M. Joshi, Judicial Member) on 2025-07-08, reported as ITA Nos. 776 and 777/Ind/2024. It bears on section 80G(5), section 80G, section 12AB, section 12AB(1)(b)(i)(A), section 12AB(1)(b)(i)(B), section 12A(1)(ac)(iii), section 11 of the Income Tax Act 1961, in Charitable Trusts & Exemption, Deductions & Disallowances and Capital Gains Exemptions matters.
This is the first Tribunal treatment located of the Form 10BD and Form 10BE machinery as it bites in practice, and it shows what is at stake on both sides of that gate. For the donor, Form 10BE is the document that carries the deduction; for the donee, over-reporting in Form 10BD generates certificates for a period when it held no approval and becomes a ground for refusing final approval, because condition 10(d) of the Form 10AC provisional approval is treated as breached. The Bench also rejected the argument that the CIT (Exemption) may not look at Form 10BD at the registration stage: verifying genuineness of activities under s.12AB(1)(b)(i)(A) makes it imperative to look at donations received. The reasoning on corpus donations is separately useful — there is no provision requiring written direction letters from donors.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee is a charitable trust created by a deed dated 18 June 2020 and registered under the Madhya Pradesh Public Trust Act 1951 on 8 March 2021. It obtained provisional registration under s.12AB in Form No. 10AC dated 23 September 2021 for AY 2022-23 to AY 2024-25, and provisional approval under s.80G(5) by a separate Form No. 10AC dated 30 November 2021 running from 30 November 2021 to AY 2024-25. Its applications for final registration and final approval were rejected and the provisional registration and approval cancelled by a composite order of the CIT (Exemption), Bhopal dated 29 August 2024, on three grounds. The first was that the Form No. 10BD filed for FY 2021-22 reported all donations received during the year, including those received before the approval took effect on 30 November 2021, so that Forms No. 10BE would have been generated for the pre-approval period and donors could claim s.80G deductions for a period when the trust held no approval, in breach of condition 10(d) of the Form 10AC. The trust's answer was that Rule 18AB(3)(i) speaks of taking into account all donations of the same nature paid during the financial year, that FY 2021-22 was the first year of the requirement, and that although Forms 10BE were generated they were never given to any donor, supported by declarations from a majority of donors at pages 107 to 116 of the paper book confirming that they had received no Form 10BE and claimed no deduction. The second ground was a foreign donation of Rs 40,000 received from an NRO account, said to violate the Foreign Contribution (Regulation) Act 2010; the trust said it did not know the account was an NRO account, reported the receipt in Form 10B and the return once its auditors identified it, and refunded the sum on 17 October 2024. The third was the absence of direction letters from donors in support of corpus donations of Rs 21,28,222 and Rs 1,66,000 for AY 2022-23 and AY 2023-24.
Both appeals were allowed for statistical purposes and the matter remanded to the CIT (Exemption) for fresh adjudication without being influenced by the previous decision (paras 8, 9 and 10). The Bench rejected the trust's preliminary objection that the CIT (Exemption) may not examine Form 10BD at the registration stage, holding that s.12AB(1)(b)(i)(A) makes it imperative for him to look into donations received among other aspects of the trust's activities (para 5.4). It nevertheless held that the wrong filing of information in Form 10BD does not mean the activities are not genuine, that the requirement was new from 1 April 2021 and the language of Rule 18AB(3)(i) could have produced the trust's understanding, and that the donors' declarations being fresh evidence the issue must be remanded (para 5.5). On the foreign donation it held there was no violation of s.12AB(1)(b)(i)(A) and none of s.12AB(1)(b)(i)(B) either, since a bona fide receipt of Rs 40,000 later refunded is not a failure to comply with such requirements of another law as are material for achieving the trust's objects, but remanded because the confirmation of refund was fresh evidence (para 6.4). On corpus donations it held that there is no specific provision under the Act requiring direction letters from donors, and that the will, trustee minutes, ticked receipts, receipt book, donor statements and separate corpus ledger were substantial enough, but remanded because the CIT (Exemption) had not examined those documents (para 7.4). The s.80G appeal was remanded as consequential on the s.12AB appeal, both sides having agreed that the approval follows the registration (para 9).
On the first ground the Bench separated the question of the Commissioner's power from the question of what the defect proves. It upheld the power, reasoning from s.12AB(1)(b)(i)(A) read with s.12A(1)(ac)(iii) that verifying genuineness of activities necessarily involves looking at donations received, funds applied and activities undertaken, and noting that the trust had produced Form 10BD without objection when asked (para 5.4). It then held the defect insufficient, because Rule 18AB(3)(i) on its plain language directs that all donations of the same nature paid during the financial year be taken into account, because FY 2021-22 was the first year of the requirement, and because the Commissioner had raised only a concern about donors obtaining an undue benefit and had nowhere said he was dissatisfied with the genuineness of the activities — a concern the donors' declarations addressed (para 5.5). On the second ground it read s.12AB(1)(b)(i)(B) narrowly by its own words, as requiring compliance only with such requirements of other laws as are material for the purpose of achieving the trust's objects (para 6.4). On the third it held that the statute contains no requirement of a written direction and that the documentary record was sufficient, faulting the Commissioner for confining himself to the absence of direction letters without examining the material (para 7.4).
In any case, such wrong filing of information in Form No. 10BD, does not mean that the activities of assessee are not genuine.
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Handle my notice → Ask a CA on WhatsAppNot on its own. The Indore Bench held that a wrong filing of information in Form 10BD does not mean the trust's activities are not genuine, and that the requirement was new from 1 April 2021 with sub-rule (3)(i) of Rule 18AB in terms speaking of all donations of the same nature paid during the financial year, so a trust could honestly have read it as covering the whole year. Because the trust filed fresh evidence — declarations from donors that they had never been given the Forms 10BE and had claimed no deduction — the matter was remanded for fresh consideration. This was decided by the ITAT (Shri B.M. Biyani, Accountant Member and Shri Paresh M. Joshi, Judicial Member) and bears on section 80G(5), section 80G, section 12AB, section 12AB(1)(b)(i)(A), section 12AB(1)(b)(i)(B), section 12A(1)(ac)(iii), section 11 of the Income Tax Act 1961. It is reported as ITA Nos. 776 and 777/Ind/2024. This is the first Tribunal treatment located of the Form 10BD and Form 10BE machinery as it bites in practice, and it shows what is at stake on both sides of that gate. For the donor, Form 10BE is the document that carries the deduction; for the donee, over-reporting in Form 10BD generates certificates for a period when it held no approval and becomes a ground for refusing final approval, because condition 10(d) of the Form 10AC provisional approval is treated as breached. The Bench also rejected the argument that the CIT (Exemption) may not look at Form 10BD at the registration stage: verifying genuineness of activities under s.12AB(1)(b)(i)(A) makes it imperative to look at donations received. The reasoning on corpus donations is separately useful — there is no provision requiring written direction letters from donors. If it applies to you, the first step is this: Report in Form 10BD only donations received on or after the date from which the s.80G approval runs, and reconcile the Form 10BD totals to the approval period before filing.
The assessee is a charitable trust created by a deed dated 18 June 2020 and registered under the Madhya Pradesh Public Trust Act 1951 on 8 March 2021. It obtained provisional registration under s.12AB in Form No. 10AC dated 23 September 2021 for AY 2022-23 to AY 2024-25, and provisional approval under s.80G(5) by a separate Form No. 10AC dated 30 November 2021 running from 30 November 2021 to AY 2024-25. Its applications for final registration and final approval were rejected and the provisional registration and approval cancelled by a composite order of the CIT (Exemption), Bhopal dated 29 August 2024, on three grounds. The first was that the Form No. 10BD filed for FY 2021-22 reported all donations received during the year, including those received before the approval took effect on 30 November 2021, so that Forms No. 10BE would have been generated for the pre-approval period and donors could claim s.80G deductions for a period when the trust held no approval, in breach of condition 10(d) of the Form 10AC. The trust's answer was that Rule 18AB(3)(i) speaks of taking into account all donations of the same nature paid during the financial year, that FY 2021-22 was the first year of the requirement, and that although Forms 10BE were generated they were never given to any donor, supported by declarations from a majority of donors at pages 107 to 116 of the paper book confirming that they had received no Form 10BE and claimed no deduction. The second ground was a foreign donation of Rs 40,000 received from an NRO account, said to violate the Foreign Contribution (Regulation) Act 2010; the trust said it did not know the account was an NRO account, reported the receipt in Form 10B and the return once its auditors identified it, and refunded the sum on 17 October 2024. The third was the absence of direction letters from donors in support of corpus donations of Rs 21,28,222 and Rs 1,66,000 for AY 2022-23 and AY 2023-24. The matter was decided on 2025-07-08 by the ITAT (Shri B.M. Biyani, Accountant Member and Shri Paresh M. Joshi, Judicial Member). On those facts the ITAT held as follows. Both appeals were allowed for statistical purposes and the matter remanded to the CIT (Exemption) for fresh adjudication without being influenced by the previous decision (paras 8, 9 and 10). The Bench rejected the trust's preliminary objection that the CIT (Exemption) may not examine Form 10BD at the registration stage, holding that s.12AB(1)(b)(i)(A) makes it imperative for him to look into donations received among other aspects of the trust's activities (para 5.4). It nevertheless held that the wrong filing of information in Form 10BD does not mean the activities are not genuine, that the requirement was new from 1 April 2021 and the language of Rule 18AB(3)(i) could have produced the trust's understanding, and that the donors' declarations being fresh evidence the issue must be remanded (para 5.5). On the foreign donation it held there was no violation of s.12AB(1)(b)(i)(A) and none of s.12AB(1)(b)(i)(B) either, since a bona fide receipt of Rs 40,000 later refunded is not a failure to comply with such requirements of another law as are material for achieving the trust's objects, but remanded because the confirmation of refund was fresh evidence (para 6.4). On corpus donations it held that there is no specific provision under the Act requiring direction letters from donors, and that the will, trustee minutes, ticked receipts, receipt book, donor statements and separate corpus ledger were substantial enough, but remanded because the CIT (Exemption) had not examined those documents (para 7.4). The s.80G appeal was remanded as consequential on the s.12AB appeal, both sides having agreed that the approval follows the registration (para 9).
On the first ground the Bench separated the question of the Commissioner's power from the question of what the defect proves. It upheld the power, reasoning from s.12AB(1)(b)(i)(A) read with s.12A(1)(ac)(iii) that verifying genuineness of activities necessarily involves looking at donations received, funds applied and activities undertaken, and noting that the trust had produced Form 10BD without objection when asked (para 5.4). It then held the defect insufficient, because Rule 18AB(3)(i) on its plain language directs that all donations of the same nature paid during the financial year be taken into account, because FY 2021-22 was the first year of the requirement, and because the Commissioner had raised only a concern about donors obtaining an undue benefit and had nowhere said he was dissatisfied with the genuineness of the activities — a concern the donors' declarations addressed (para 5.5). On the second ground it read s.12AB(1)(b)(i)(B) narrowly by its own words, as requiring compliance only with such requirements of other laws as are material for the purpose of achieving the trust's objects (para 6.4). On the third it held that the statute contains no requirement of a written direction and that the documentary record was sufficient, faulting the Commissioner for confining himself to the absence of direction letters without examining the material (para 7.4). In the words reproduced by the source cited on this page: "In any case, such wrong filing of information in Form No. 10BD, does not mean that the activities of assessee are not genuine."
It was decided by the ITAT on 2025-07-08 and is reported as ITA Nos. 776 and 777/Ind/2024. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 80G(5), section 80G, section 12AB, section 12AB(1)(b)(i)(A), section 12AB(1)(b)(i)(B), section 12A(1)(ac)(iii), section 11, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. Both appeals were allowed for statistical purposes and the matter remanded to the CIT (Exemption) for fresh adjudication without being influenced by the previous decision (paras 8, 9 and 10). The Bench rejected the trust's preliminary objection that the CIT (Exemption) may not examine Form 10BD at the registration stage, holding that s.12AB(1)(b)(i)(A) makes it imperative for him to look into donations received among other aspects of the trust's activities (para 5.4). It nevertheless held that the wrong filing of information in Form 10BD does not mean the activities are not genuine, that the requirement was new from 1 April 2021 and the language of Rule 18AB(3)(i) could have produced the trust's understanding, and that the donors' declarations being fresh evidence the issue must be remanded (para 5.5). On the foreign donation it held there was no violation of s.12AB(1)(b)(i)(A) and none of s.12AB(1)(b)(i)(B) either, since a bona fide receipt of Rs 40,000 later refunded is not a failure to comply with such requirements of another law as are material for achieving the trust's objects, but remanded because the confirmation of refund was fresh evidence (para 6.4). On corpus donations it held that there is no specific provision under the Act requiring direction letters from donors, and that the will, trustee minutes, ticked receipts, receipt book, donor statements and separate corpus ledger were substantial enough, but remanded because the CIT (Exemption) had not examined those documents (para 7.4). The s.80G appeal was remanded as consequential on the s.12AB appeal, both sides having agreed that the approval follows the registration (para 9). It arises in Charitable Trusts & Exemption, Deductions & Disallowances and Capital Gains Exemptions matters, on section 80G(5), section 80G, section 12AB, section 12AB(1)(b)(i)(A), section 12AB(1)(b)(i)(B), section 12A(1)(ac)(iii), section 11 of the Income Tax Act 1961, and was decided by Shri B.M. Biyani, Accountant Member and Shri Paresh M. Joshi, Judicial Member. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. If a Form 10BD has already been over-reported, revise it — the departmental representative's answer here was that the trust could have revised and did not. Collect written declarations from the affected donors that they were never issued Form 10BE and claimed no deduction; that is the evidence that saved this trust. Read condition 10(d) of your Form 10AC provisional approval and check compliance before applying for final approval in Form 10AB. For corpus donations, do not concede that direction letters are required; maintain ticked receipts, a separate corpus ledger, trustee minutes and balance-sheet treatment, which the Bench held sufficient. Expect the s.80G application to follow the fate of the s.12AB application — both sides agreed here that the approval is consequential on the registration.
Searched for later treatment; none was found. That is not the same as a source affirming it. Decided 8 July 2025. No appeal from this order and no later decision considering it have been traced. That is a statement about what has been looked for rather than a certificate, and this is in any event a Tribunal order of the Indore Bench, binding nobody outside the case. The more important qualification is the shape of the disposal. Both appeals were allowed for statistical purposes and the matter was remanded to the CIT (Exemption) for fresh adjudication without being influenced by the previous decision. Nothing is finally decided even between these parties: the trust has not been held entitled to final registration under s.12AB or to final approval under s.80G(5), and the Commissioner remains free to refuse both on a fresh and properly reasoned consideration of the same material. The propositions this entry sets out are the Bench's reasoning on the way to that remand, and they are useful as reasoning rather than as a result. Two of those propositions are worth keeping apart when the order is cited. The Bench upheld the Commissioner's power to examine Form 10BD at the registration stage, holding that verifying the genuineness of activities under s.12AB(1)(b)(i)(A) read with s.12A(1)(ac)(iii) makes it imperative to look at donations received; that part is against the assessee and is not obiter. What it then held - that a wrong filing in Form 10BD does not by itself show that the activities are not genuine, given that the requirement was new from 1 April 2021 and that Rule 18AB(3)(i) speaks of all donations of the same nature paid during the financial year - is a holding about sufficiency, not about power. For a year governed by the Income-tax Act 2025 the successors of ss.11, 12AB and 80G and of the Form 10BD machinery should be identified before this order is relied on; that correspondence has not been established here. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
ON THE ORDER ITSELF. It runs to 10 numbered paragraphs, with sub-paragraphs 5.1 to 5.5, 6.1 to 6.4 and 7.1 to 7.4, and the disposal at paragraph 10. Everything attributed to the Bench on this page comes from those paragraphs. THREE DEFECTS IN THE TEXT, none of which affects the reasoning but each of which will confuse a reader who checks the order. First, the order is internally inconsistent about the author of the will: paragraph 7.2 refers to 'Late Shri Girdhar Das Zalani' and paragraph 7.4 to 'Late Shri Bhagwan Das Zalani'. Second, paragraph 7.3 attributes the objection about direction letters to the 'AO' where the CIT (Exemption) is meant - there was no Assessing Officer in these proceedings at all. Third, the order reproduces sub-rule (3)(i) of Rule 18AB but marks sub-rule (3)(ii) as 'XXX', so the full text of that rule was not before the Bench as the order records it, and it is not set out here either. If your argument depends on sub-rule (3)(ii), read the rule itself. WHAT THIS ORDER DOES NOT DECIDE. Nothing in it decides a donor's entitlement to a deduction under s.80G. The observations about donors having obtained Forms 10BE for a period when the trust held no approval are made in the context of the trust's registration, and the donors' declarations were treated as evidence going to the trust's genuineness, not as a determination of the donors' assessments. Nor does the order decide what condition 10(d) of the Form 10AC provisional approval means; it decides only that a breach of it, if there was one, did not on these facts establish that the activities were not genuine. And it decides nothing about s.11, which is the exemption the registration under s.12AB eventually carries - that question never arose. ON THE CORPUS-DONATION FINDING, which is the part of the order most likely to be cited elsewhere. The Bench held that there is no specific provision in the Act requiring written direction letters from donors, and that the will, the trustee minutes, the ticked receipts, the receipt book, the donor statements and a separate corpus ledger were substantial enough material. But it still remanded, because the Commissioner had not examined those documents. So the proposition is stated, and the result is open. ONE POINT OF PRACTICE THE ORDER RECORDS RATHER THAN DECIDES. The departmental representative's answer to the over-reporting was that the trust could have revised its Form 10BD and did not. The Bench did not rule on whether a revision was available or effective, but the answer is the one a Commissioner will give, and it is worth meeting before the hearing rather than at it. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
Both appeals were allowed for statistical purposes and the matter remanded to the CIT (Exemption) for fresh adjudication without being influenced by the previous decision (paras 8, 9 and 10). The Bench rejected the trust's preliminary objection that the CIT (Exemption) may not examine Form 10BD at the registration stage, holding that s.12AB(1)(b)(i)(A) makes it imperative for him to look into donations received among other aspects of the trust's activities (para 5.4). It nevertheless held that the wrong filing of information in Form 10BD does not mean the activities are not genuine, that the requirement was new from 1 April 2021 and the language of Rule 18AB(3)(i) could have produced the trust's understanding, and that the donors' declarations being fresh evidence the issue must be remanded (para 5.5). On the foreign donation it held there was no violation of s.12AB(1)(b)(i)(A) and none of s.12AB(1)(b)(i)(B) either, since a bona fide receipt of Rs 40,000 later refunded is not a failure to comply with such requirements of another law as are material for achieving the trust's objects, but remanded because the confirmation of refund was fresh evidence (para 6.4). On corpus donations it held that there is no specific provision under the Act requiring direction letters from donors, and that the will, trustee minutes, ticked receipts, receipt book, donor statements and separate corpus ledger were substantial enough, but remanded because the CIT (Exemption) had not examined those documents (para 7.4). The s.80G appeal was remanded as consequential on the s.12AB appeal, both sides having agreed that the approval follows the registration (para 9).
TaxSphere, “Bhagwandas Zalani Family Charitable Trust v CIT (Exemption), Bhopal”, https://taxnotice.vittsphere.com/caselaw/case/bhagwandas-zalani-form-10bd-pre-approval-donations-reported/ (validity last checked 2026-09-08)
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My Form 10AB for final registration under s.12AB was rejected as time-barred because I missed the 30 June 2024 date in Circular 7/2024. Is anything left to me?
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The CIT(E) has rejected my Form 10AB and cancelled my provisional registration on the ground that my objects benefit only one religious community. What is the Revenue's case and how does it succeed?
The CIT(E) rejected my Form 10AB as premature because the trust had not yet started activities or received donations. Can he do that?
