KACHCHH KERALA SAMAJAM,GANDHIDHAM vs. THE CIT(EXEMPTION), AHMEDABAD

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ITA 337/RJT/2025Status: DisposedITAT Rajkot30 March 20267 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal condoned the delay in filing the application, following a precedent from a coordinate bench. The matter was remitted back to the CIT(E) for fresh adjudication on merits.

What were the facts?

The assessee filed an application for registration under Section 80G(5)(iii) late. The Commissioner of Income Tax (Exemption) rejected the application, stating he lacked the power to condone the delay and such power rests only with the CBDT.

What were the issues?

Whether the CIT(E) has the power to condone the delay in filing an application under Section 80G(5)(iii), and if not, whether the delay can be condoned by the Tribunal.

Which sections of the Income-tax Act were involved?

Section 80G(5)(iii)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT

Before: DR. ARJUN LAL SAINI & DR. DINESH MOHAN SINHA

For Respondent: Shri Sanjay Punglia, CIT. DR
Hearing: 07/01/2026Pronounced: 30/03/2026

आदेश /ORDER Per, Dr. Arjun Lal Saini, AM:

Captioned appeal filed by the assessee is directed against the order passed by the Commissioner of Income Tax(Exemption), vide order dated 25.03.2025, wherein the Commissioner of Income Tax(Exemption) [in short (Ld.CIT(E)] has rejected the assessee’s application in Form No.10AB u/s. 80G(5)(iii) of the Act, holding that assessee did not file the application, on time, and the Ld.CIT(E), did not have power to condone the delay in filing the application in Form No.10AB, u/s 80G(5)(iii) of the Act, therefore, the application filed by the assessee was rejected by the Ld.CIT(E) and the provisional approval issued to the assessee, in Form 10AC was also cancelled by the Ld.CIT(E).

2.

The grounds of appeal raised by the assessee, are as follows: 1. The order passed by the learned CIT(Exemption) under clause (ii)(b)(B) of second proviso to section 80G(5) of the Act is bad in law. 2. The Ld. CIT (Exemption) has erred in law and as well as on facts in rejecting the application for registration u/s.80G under cause (iii) of its first proviso by considering it as non-maintainable.

3.

The brief facts qua the issue are that assessee has filed the application in Form No.10AB, under clause (iii) of first proviso to sub-section (5) of section 80G of the Act, very late, therefore, Ld.CIT(E ) noted that the assessee in this case has failed to avail the benefit of Circular No. 7/2024 dated 25th April 2024 wherein the due date in filing an application in form 10AB has been extended to 30.06.2024 and has now preferred an application for regularization of provisional approval. Further, the time limits prescribed under Income Tax Act,1961 are mandatory and the Commissioner of Income Tax has no power to condone the delay in filing application in Form No.10AB. Such powers rest with CBDT only. Facts of the assessee’s case, in brief are as follows:

In reference to the application filed by the applicant in FORM 10AB (with above details), the applicant was requested to submit certain

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details/documents vide notice dated 05.12.2024. In response to the said notice, the applicant vide, its reply dated 18.12.2024, has submitted certain details. On perusal of such details/documents it was observed by ld.CIT(E) that the assessee’s application has been filed beyond the time allowed under current statue. The applicant vide its own reply dated 14.12.2024(towards proceeding u/s. 12A(1)(ac)(iii) of the Act) has stated that the date of commencement of activity in its case is 21st November 2002. The assessee accepted that the application filed by it in this case is delayed and requested for condonation of delay in filing Form 10AB. However, it has been already pointed out that the time limits prescribed in section 80G(5) of the Act are mandatory and the Commissioner of Income Tax has no power to condone the delay in filing application in Form No. 10AB. Such powers rest with CBDT only. Also, assessee in this case has failed to avail the benefit of Circular No. 7/2024 dated 25th April 2024. Therefore, ld.CIT(E ) rejected application of the assessee in form No. 10 AB, under section 80G(5) (iii) of the Act.

4.

Aggrieved by the order of the Ld.CIT(A), the assessee is in appeal before us.

5.

Learned Counsel for the assessee submitted a chart before the Bench, showing important dates, that is, when the trust was incorporated and when the provisional approval granted and expired. The Ld. Counsel also submitted that the assessee-trust could not availed the benefit given by CBDT vide Circular No.7/2024. The assessee, also could not avail the opportunity of the amendment made in section 80G(5)(iii) of the Act, with effect from 1.10.2024 due to the circumstances beyond its control. Therefore, Ld. Counsel prayed this Bench that delay may be condoned in filing application in Form 10AB u/s,80G(5)(iii) of the Act, and matter may

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be remitted back to the file of Ld.CIT(E) for fresh adjudication, as the assessee wants to submit the additional documents and evidences, to prove his claim.

6.

On the other hand, the Ld. CIT- DR for the revenue submitted that assessee has admitted that he did not avail the opportunity given by the CBDT by way of Circular No.7/2024 and the assessee-trust also did not avail the benefit of the amendment made in the Act w.e.f 01.10.2024 in section 80G(5) of the Act. Therefore, assessee’s appeal should be dismissed at this stage as the assessee was gross negligent and the assessee-trust may be directed to file afresh application before the Ld.CIT(E) and therefore the present appeal of the assessee may be dismissed by this Tribunal, and matter should not be restored back to the file of the learned CIT(E ).

7.

We have heard both the parties and perused the materials available on record. We note that assessee is a trust registered with the office of the Charity Commissioner with effect from 21.11.2002.The assessee trust is carrying on charitable activities as per the objects contained in the trust deed. The assessee- trust was granted registration u/s. 12A of the Act vide order dated 28.05.2021.The assessee trust also granted provisional registration under clause (iv) of the first proviso to section 80G(5) of the Act vide order dated 22.06.2022.Subsequently, the assessee- trust applied for final registration under clause (iii) of the first proviso to section 80G(5) of the Act vide application dated 14.08.2024.Thereafter, the CIT (Exemption), Ahmedabad, issued a show cause notice requiring the assessee, to explain why the said application for final registration should not be rejected on the ground that it was filed beyond the time limit prescribed under CBDT Circular No. 7 of 2024 dated 25.04.2024, which allowed filing of Form No. 10AB up to 30.06.2024.In response to the show cause notice, the assessee -trust has accepted that the application filed is delayed is unintentional and requested to condone the delay. However, the CIT(Exemption), Ahmedabad vide order dated 25.03.2025, rejected the application on a contention that the CIT (Exemption) does not have the power to condone the delay in filing Form No. 10AB and that such power vests exclusively with the CBDT. Accordingly, the application was rejected as non-maintainable without adjudication on merits.

8.

It was submitted that the delay in the application was neither deliberate nor intentional. The same occurred as the trustee is not well conversant with the newly introduced procedural requirements for obtaining final registration. Hence, the delay constitutes a bona fide and unintentional procedural lapse that should not defeat substantive justice. We note that issue under consideration is a squarely covered by the judgement of the Coordinate Bench of ITAT Rajkot in the case of Shree Saibaba Charitable Trust & others, ITA Nos. 297/Rjt/2025 & others, wherein, it was held as follows:

“16. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(E) and other materials brought on record. We note that assessee is a trust registered with the office of the Charity Commissioner with effect from 19.10.2005 and it is carrying on charitable activities as per the objects contained in the trust deed.The assessee trust was granted registration u/s. 12A(1)(ac)(i) of the Act vide order dated 24.09.2021.4. The assessee trust also granted provisional registration under clause (iv) of the first proviso to section 80G(5) of the Act vide order dated 23.06.2022.Subsequently, the assessee trust applied for final registration under clause (iii) of the first proviso to section 80G(5) of the Act vide application dated 13.08.2024. Thereafter, the ld. CIT(exemption), Ahmedabad issued a show cause notice requiring the assessee to explain why the said application for final registration/approval should not be rejected on the ground that it was filed beyond the time limit prescribed under CBDT Circular No. 7 of 2024 dated 25.04.2024, which allowed filing of Form No. 10AB up to 30.06.2024. In response to the show cause notice, the assessee trust has accepted that the application filed is delayed and it is unintentional and requested to condone the delay. However, the CIT(exemption), Ahmedabad vide order dated 05.03.2025, rejected the application on a contention that the CIT (Exemption) does not have the power to condone the delay in filing Form No. 10AB and that such power vests exclusively with the CBDT. Accordingly, the application was rejected as non- maintainable without adjudication on merits. 17. We find that the application was neither deliberate nor intentional. The same occurred as the trustee is not well conversant with the newly introduced procedural requirements for obtaining final registration. Hence, the delay constitutes a bona fide and unintentional procedural lapse that should not defeat substantive justice. The reliance is placed on the following decision of wherein the Hon'ble ITAT condone the delay of the application made for approval u/s 80G(5) of the Act and remitted matter back to the CIT(Exemption) for adjudicating the matter on merits: (i) Rajkot ITAT in the case of Shri Shardagram Aumni Education & Charitable Trust (ITA No.175/Rjt/2024 decision dated 28.03.2025). (ii) Rajkot ITAT in the case of G. C. Foundation (ITA No.266/Rjt/2025 decision dated 22.10.2025). (iii) Surat ITAT in the case of Vananchal Kelavani Trust (ITA No.728/Rjt/2023 decision dated 09.01.2024). 18. When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred.Where no negligence or inaction is imputed to an appellant it can be sufficient cause and liberal construction be adopted and delay should be condoned. Therefore, we condone the delay in case of all the assessees and restore these appeals back to the file of the ld.CIT(E ), for fresh adjudication, as per the provisions of the Act. Therefore, we deem it fit and proper to set aside the order of the ld. CIT(E) and remit the matter back to the file of the ld. CIT(E) to adjudicate the issue afresh on merits. 19.Hence, for the reasons given above, we are of the view that the order of the CIT(E) on this issue requires to be set aside and the issue needs to be looked into afresh by the ld.CIT(E ). We hold and direct accordingly. The ld.CIT(E ) will afford opportunity of being heard to the these assessees before deciding the issue. All these assessees will also be at liberty to let in further evidence to substantiate their case. For statistical purpose, all the appeals of these assessees are treated as allowed.”

9.

Respectfully following the above binding precedent in the case of Shree Saibaba Charitable Trust & others(supra), we condone the delay and remit the metal back to the file of the ld.CIT(E ), for fresh adjudication.

10.In the result, the appeal of the assessee is allowed for statistical purposes, in above terms.

Order is pronounced in the open court on 30/03/2026.

Sd/- Sd/- (Dr. Dinesh Mohan Sinha) (Dr. Arjun Lal Saini) �ाियक सद�/ Judicial Member लेखा सद�/Accountant Member Rajkot Date: 30/03/2026. आदेश की �ितिलिप अ�ेिषत/ Copy of the order forwarded to :  अपीलाथ�/ The Assessee  ��थ�/ The Respondent  आयकर आयु�/ CIT  आयकर आयु�(अपील)/ The CIT(A)  िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण/ DR, ITAT  गाड� फाईल/ Guard File By order, (True Copy) (Truce Copy) Assistant Registrar/Sr.PS/PS ITAT, Rajkot

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