HENSLA HARA PARBATI CLUB,HENSLA vs. THE COMMISSIONER OF INCOME TAX (EXEMPTION), KOLKATA , KOLKATA

Challenging the Rejection on Technical Grounds: The Ld. Commissioner of Income Tax (Exemption), Kolkata [CIT(E)], erred both in law and on facts by rejecting the Appellant's application in Form No. 10AB of the Income Tax Act, 1961 solely on the grounds of a technical delay in filing, without considering the merits of the case or the genuine charitable nature of the Institution.

Inconsistency with 12AB Registration: The Ld. CIT(E) erred in rejecting the 80G of the Income Tax Act, 1961 approval despite having granted regular registration to the Appellant under section 12AB(1)(b) of the Income Tax Act, Hensla Hara Parbati Club. 1961vide order dated 08/03/2026 for the same period (AY 2027-28 to 2036- 37). The rejection of 80G of the Income Tax Act, 1961 approval on a timeline technicality while accepting the same entity's credentials for 12AB registration is inconsistent and contradictory.

Directory vs. Mandatory Nature of Timelines: The Ld. CIT(E) failed to consider that the time limits prescribed under the first proviso to section 80G(5) of the Income Tax Act, 1961 are directory in nature and intended to facilitate administration, rather than to serve as a mandatory bar to deny the benefit of tax exemption to a long-standing charitable organization.

Misinterpretation of Application for AY 2027-28: The Ld. CIT(E) erred in applying the expiry of the provisional registration (valid up to AY 2024-25) as a rigid bar for an application explicitly filed for Assessment Year 2027-28. The Appellant contends that since the application was for a future period, the rejection for being "beyond the prescribed time limit" relative to a prior period is misplaced.

Violation of Principles of Natural Justice: The impugned order was passed in a mechanical manner without affording the Appellant a meaningful opportunity to explain the "reasonable cause" for the delay, thereby violating the principles of natural justice and the spirit of the beneficial provisions of the Act.

Substantial Justice over Technicality: It is a settled position of law that "substantial justice" should prevail over "technical considerations." The Ld. CIT(E) erred in not following the judicial precedents which hold that a genuine charitable institution should not be deprived of registration/approval merely due to a delay in filing a procedural form.”

Brief facts of the case are that the assessee was granted provisional approval u/s 80G(5)(iv) of the Act on 01.10.2021, which was valid up to AY 2024-25. Subsequently, the assessee electronically filed an application seeking regular approval u/s 80G(5)(ii) of the Act in Form No. 10AB on 29.09.2025. The Ld. CIT (Exemptions) observed that the time limit for filing such an application was extended up to 30.06.2024 as per the CBDT Circular No. 7/2024, but the assessee had filed it beyond this extended period. The Ld. CIT (Exemptions) noted that the assessee had already commenced its activities but failed to file the application within the extended due date or six months prior to the expiry of the provisional approval period. Consequently, the application in Form No. 10AB u/s ITA No(s). 1419/KOL/2026 Assessment Year(s) 2027-28 Hensla Hara Parbati Club. 80G(5) of the Act was rejected for having been filed beyond the prescribed time limit, without delving into the merits of the case.

Aggrieved with the order of the Ld. CIT (Exemptions), the assessee has filed the appeal before the Tribunal.

Rival contentions were heard and the submissions made have been examined.

We have heard the rival contentions and have also gone through the facts of the case. It was submitted by the Ld. AR that the assessee is an old Society and was in existence since 1982. It had applied for registration under section 80G of the Act which was denied. It was stated that the approval under section 12AB had been granted and therefore, there was no justification for rejecting the application under section 80G of the Act. The Ld. DR argued that the order of the Ld. CIT(E) may be upheld and the appeal may be dismissed.

We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT(E). In the interest of justice, it was considered imperative by the Bench that the assessee may be granted another round of opportunity to file its submission in response to the notice issued by the Ld. CIT (Exemption) for justifying the genuineness of the activities and claim of approval as it was noticed and the application should have been filed under 80G(5)(i) of the Act as an old trust/society. Hence, the order of the Ld. CIT (Exemption) is hereby set aside and the matter is remanded to him for deciding the application afresh after granting an opportunity of being heard to the assessee and thereafter consider the application in accordance with law for grant of registration u/s 80G of the Act. For statistical purposes, the grounds of appeal are partly allowed.

In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 22nd July, 2026. [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 22.07.2026 Bidhan (Sr. P.S.)

CIT-

CIT(DR), Kolkata Benches, Kolkata.

Guard File. //// By order