Shri Guru Singh Sabha, Mumbai vs CIT | s.80G(5), 12AB | ITAT Mumbai 2025

PER PAWAN SINGH, JUDICIAL MEMBER;

This appeal by assessee is directed against the order of ld. CIT(E) / NFAC dated 21.06.2025 in rejecting application for approval of fund under section 80G(5) of the Income-tax Act, 1961 (in short, ‘the Act’).

Rival submissions of both the parties have been heard and record perused.

The Ld.AR of the assessee submits that assessee is a charitable trust engaged in charitable activities. Object and activities of the assessee is not in dispute.

The assessee is having registration under section 12AB. The assessee was also having provisional approval of fund under section 80(G) of the Act. The assessee applied for regular approval of fund in Form 10AB. However, due to inadvertence, the CA / AR of the assessee inadvertently clicked clause (iii) instead of clause (vi) of first proviso to section 80G(5). Thus, the application of assessee was rejected. Other ground for rejection was that assessee applied for regular approval under section 80G on 30/11/2024 which is beyond the permissible limit, the assessee should have been applied either within six months of start of activities or at least six months before expiry of provisional registration. The Ld. CIT(E) while rejecting the application of assessee recorded that despite giving opportunity, no compliance was made.

The Ld.AR of the assessee submits that assessee applied for regular approval under section 80G on 10/06/2024 which was within the extended period, as extended by Central Board of Direct Taxes (CBDT) in its circular dated 25/04/2024. The Ld.AR of the assessee submits that application of assessee was rejected for technical reasons, therefore, appeal may be restored back to the file of Ld. CIT(E) with liberty to the assessee to correct the appropriate clause and to pass the order afresh.

On the other hand, the Ld. CIT-DR for the revenue supported the order of Ld. CIT(E).

We have considered the rival submissions of the parties and have gone through the order of CIT(E) carefully. We find that application of the assessee was rejected by Ld.CIT(E) by taking view that it was filed beyond the prescribed time limit, i.e. not filed either six months prior to expiry provisional registration or six months from the starting of activities. We find that CBDT, in its circular No.7 of 2024 has extended time limit for filing application for approval under section 80G(5). Thus, the Ld.CIT(E) is directed to consider the application of assessee as has been filed within the extended time limit. So far as other objection regarding clicking the appropriate clause (iii) instead of (vi) of Proviso to section 80G, we find that it is a procedural irregularity and not fatal, it could be rectified by Ld.CIT(E) himself. Therefore, we direct the Ld.CIT(E) to consider the same under appropriate clause i.e. under clause (iii) of First Proviso to section 80G(5). Further, considering the fact that the Ld.CIT(E) has not passed the order on merit, therefore, the matter is restored to the file of the Ld.CIT(E) to reconsider the application of assessee for approval of fund and pass the order in accordance with law.

SHRI GURU SINGH SABHA,MUMBAI vs. CIT(EXEMPTION), MUMBAI