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Facts
The appellant trust, established in 1953 and having provisional registration u/s 12A & 80G, filed an application in Form 10AB for registration under Section 80G(5)(iv)(B). The CIT(E) rejected the application, stating that since the trust had claimed exemption in previous years, it was not eligible.
Held
The Tribunal found the CIT(E)'s order to be cryptic and lacking detailed reasoning. It noted that the CIT(E) did not consider the amendments made in the Finance Acts of 2023 and 2024, nor the fact that the trust was old and engaged in charitable activities. The issue was remitted back to the CIT(E) for a detailed order.
Key Issues
Whether a trust that has claimed exemption in previous years is eligible for registration under Section 80G(5)(iv)(B) after recent legislative amendments?
Sections Cited
80G, 10, 11, 12, 12A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Mumbai “B” Bench, Mumbai.
Before: Shri Anikesh Banderjee (JM) & Shri Omkareshwar Chidara (AM) Dr. Gopalrao
In this above case, the Ld. CIT(E) has rejected the application filed by the Trust under section 80G of the I.T. Act, by passing the order mentioned below :- “1. M/s Seth Purshottam Mulji Chandarana & others Baradi Lohana Vidyarthi Bhuvan [hereafter 'the applicant' or 'the assessee'] filed- application in Form 10AB seeking registration under section 80G(5)(iv)(B) of the Income Tax Act [hereafter 'the Act'].
Under the relevant section 80G(5)(iv)(B) of the Act, in any other case, where activities "of the trust or institution have: (B) commenced and no income or part thereof the said trust or institution has been excluded from the total income on account of applicability of sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, or section 11 or section 12, for any previous year ending on or before the date of such application, at any previous year ending on or before the date of such application, at any time after the commencement of such activity."
2 Seth Purshottam Mulji Chandarana & Others Baradi Lohana Vidyarthi Bhuvan 3. On verification of the facts and circumstances of the case, it is found that the trust was incorporated on 24.06.1953. The assessee has provisional registration u/s 12A & 80G. Further, the assessee has claimed exemption in previous years and filed ITR 7.
As per above mentioned provision of Income Tax Act, the assessee has to file Form 10AB u/s 80G(5)(iv)(B), if the assessee has not claimed exemption in previous year. Since the assessee has claimed exemption in previous years, therefore this application u/s 80G is not allowable. Further, the assessee is not fulfilling the stipulated conditions prescribed for filing application for approval in Form 10AB. In view of the above this application-For-m is hereby rejected.
5. For statistical purposes, this application is non maintainable and stands rejected.”
2. Aggrieved by the rejection order, the Trust filed an appeal before ITAT with the following grounds of appeal :-
The grounds of appeal
mentioned hereunder are without prejudice to one another.
2. That the learned Commissioner of Income Tax (Exemptions), Ahmedabad has erred in law and on facts in refusing to grant registration U/S 80G of the Income Tax Act, 1961.
3. Your Honour's appellant craves leave to add, to amend, alter, or withdraw any or more grounds of appeal on or before the hearing of appeal.
During the hearing before the ITAT, the Ld. AR of appellant has filed written submission stating that the Trust is very old and genuine and charitable activities are being carried out since 1953. The Ld. AR has stated that the Registration under section 12A of the Act was granted to the Trust which is valid from A.Y. 2022-23 to A.Y. 2026-27 and it had provisional approval under section 80G of the Act and filed Form 10AB for final approval. The Ld. AR has mentioned relevant legal provisions of section 80G(5) of the Act along with first proviso. It was argued that the legislative amendments of Finance Act 2023 and Finance Act 2024 have removed the restrictive words and hence the old Trust already claimed/claiming exemption can apply under clause (iv)(B) of section 80G(5) of the Act and the 3 Seth Purshottam Mulji Chandarana & Others Baradi Lohana Vidyarthi Bhuvan effect of these amendments is to remove the hardship to the genuine charitable institutions. The Ld. AR of the appellant has also relied on the decision of the Old Rkcians Asssociation Vs. CIT(E), Ahmedabad dated 27.5.2024 where it was held that the Trust is entitled for exemption under section 80G of the Act in similar circumstances. In view of the same, it was requested that the order of Ld. CIT(E) may be set aside and direct the Ld. CIT(E) to grant approval under section 80G(5) of the Act as sought for.
4. The Ld. DR relied on the order of Ld. CIT(E).
Heard both sides. The order passed by Ld. CIT(E) is very cryptic and the facts were not brought out in detail as to which stipulated conditions prescribed for filing application for approval in Form 10AB were not fulfilled while rejecting the application of appellant Trust. The Ld. CIT(E) has not discussed the amendments made in Finance Act, 2023 and 2024 and it appears he has not taken into consideration that the Trust is very old and doing charitable and educational activities. Hence, the issue is remitted to the file of Ld. CIT(E) with a direction to pass a detailed order after taking into consideration all the submissions of appellant Trust with respect to granting exemption under section 80G of the Act.
The appeal of appellant is allowed for statistical purposes.
Order pronounced in the open Court on 07/11/2025.