KASHI ANATHALAYA ASSOCIATION,VARANASI vs. CIT EXEMPTION, LUCKNOW

IN THE INCOME TAX APPELLATE TRIBUNAL VARANASI BENCH, VARANASI BEFORE SH. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SH. NIKHIL CHOUDHARY, ACCOUNTANT MEMBER ITA No.133/VNS/2025 A.Y. -- Kashi Anathalaya Association, vs. CIT (Exemption), Lahurabir, Varanasi Lucknow PAN: AAATK2331G (Appellant) (Respondent) Assessee by: Sh. Arvind Shukla, Advocate Revenue by: Sh. Amalendu Nath Mishra, CIT DR Date of hearing: 06.08.2026 Date of pronouncement: 31.08.2026 O R D E R PER NIKHIL CHOUDHARY, AM: This is an appeal filed by the assessee against the order of the ld. CIT (Exemption), Lucknow dated 24.03.2025 wherein the ld. CIT(Exemption) has refused to register the assessee under section 80G(5)(ii) of the Income Tax Act holding the application to be non-maintainable. The grounds of appeal are as under: - “1. Because the learned Commissioner of Income Tax (Exemptions), Lucknow has erred in law and on facts in passing an order dated 24.03.2025 (received on 10/06/2025) in Form 10AD rejecting the appellant's application for registration under Section 80G of the Income-tax Act, 1961, which is arbitrary, perverse, non-speaking, time-barred, and in blatant violation of the principles of natural justice. 2. Because the learned CIT(Exemptions) has erred holding that the appellant's application filed in Form No. 10AB on 29.09.2024 was premature and non-maintainable under Section 80G(5)(ii) of the Act, thereby misapplying the statutory provisions and CBDT Circulars No. 11/2022 dated 03.06.2022 and 22/2022 dated 01.11.2022. 3. Because the rejection of the application on the alleged ground that the appellant ought to have applied under Section 80G(5)(iii), when the appellant was holding a valid and subsisting provisional approval under 1

ITA No. 133/VNS/2025 Kashi Anathalaya Association Section 80G(5) in Form 10AC up to AY 2024-25 (i.e., up to 31.03.2025), is wholly misconceived, contrary to law, and constitutes a clear mistake apparent from the record. 4. Because the learned CIT(Exemptions) has grossly erred in law in passing the impugned order dated 24.03.2025, but uploaded on 10/06/2025 le beyond the statutory time prescribed under limit Rule 17A(5) of the Income- tax Rules, 1962 thereby rendering the said order null and void ab initio and without Jurisdiction. 5. Because the impugned order suffers from complete non-application of mind, inasmuch as no adverse findings or deficiencies were ever communicated to the appellant after its reply dated to the questionnaire issued on 03.01.2025, and the final rejection was passed in undue haste without affording any further opportunity of hearing. thereby violating the principles of natural justice. 6. Because learned the CIT(Exemptions) has failed non-to appreciate that the order under appeal is speaking, devoid of any factual or legal reasoning. and mechanically passed without considering the detailed submissions, documents, and compliance furnished by the appellant. 7. registration Because the impugned order erroneously refers to the provisional granted in Form 10AC as valid for three years. whereas the said certificate clearly mentions validity up to AY 2024-25, ie, up to 31.03.2025, and such a patent factual misstatement renders the foundation of the rejection legally untenable. 8. Because learned CIT(Exemptions) has acted in a manner inconsistent with the binding precedents and administrative discipline laid down by the Hon'ble Supreme Court and High Courts which mandate reasoned, fair, and timely disposal of exemption registration applications under sections 12AB and 80G. 9. Because the appellant craves leave to add, alter, amend, or withdraw any of the above grounds at the time of hearing in the interest of justice.”

ITA No. 133/VNS/2025 Kashi Anathalaya Association dated 24.05.2025 and only after the active intervention of the DGIT (Systems), Web-Manager and e-Filing help desk, the said order could finally be accessed and downloaded on 10.06.2025. Copy of the email from the e- Filing help desk dated 10.06.2025 confirming the Resolution of the technical issue was attached to the condonation petition, as evidence thereof. Accordingly, it was submitted that the delay in filing of the appeal was purely due to technical grounds and was therefore, on account of reasons beyond the control of the assessee. It was, therefore, prayed that the delay may kindly be condoned. After considering the said submission and the supporting evidences, we hereby condone the delay and admit the appeal for adjudication. 3. The facts of the case are that the assessee filed an application for registration under section 80G(5)(ii) of the Income Tax Act in Form No. 10AB. The ld. CIT(Exemption) noted that such provisions were applicable in respect of trusts and institutions that had been registered under section 80G(5) of the Act for the period of five years and the period of the said registration was due to expire. He noted that since the application was premature, it was non-maintainable. However, he issued a letter on 3.01.2025 asking for certain clarifications. The assessee filed a response but once again the ld. CIT (Exemption) noted that the application was non- maintainable and therefore, he rejected the application for statistical purposes. However, he clarified that he was not drawing any adverse inference against the assessee and the provisional registration granted under section 80G(5)(iv) in Form 10AC, by the CPC would remain valid. 4. The assessee is aggrieved at this decision of the ld. CIT (Exemption). Sh. Arvind Shukla, Advocate (hereinafter referred to as the ld. AR) appearing on behalf of the assessee submitted that the assessee have been granted registration under section 12A upto assessment year 2026-27 and also been 3

ITA No. 133/VNS/2025 Kashi Anathalaya Association given a registration certificate in Form 10AC for the period 15.10.2021 to assessment year 2024-25. Accordingly, as per the terms and conditions of the Act, the assessee was required to file an application in the prescribed form and manner for grant of further approval as per the terms of section 80G(5)(iii). Inadvertently, the application had been filed under section 80G(5)(ii). However, this was a prima facie mistake and it was within the power of the ld. CIT (Exemption) to treat the said application as having been filed under the proper section and granting of the approval to the assessee under the proper section. Instead, the ld. CIT (Exemption) had relied upon technicalities to reject the application. This had caused grave difficulties to the assessee society, as donations to the same after 31.03.2024 were no longer eligible for deduction in the hands of the owner and this affected the fund floor to the assessee ashram. Accordingly, it was prayed that the matter may kindly be restored to the file of the ld. CIT (Exemption) with a direction to treat the said application as having been filed under the correct section and to decide the same on merits. It was further submitted that the assessee was already enjoying registration under section 12A upto the assessment year 2026-27 and therefore, it was clear that the activities of the assessee society were genuine and there was no change in the objects or activities of the society since the date of grant of this provisional registration. 5. On the other hand, Sh. Amalendu Nath Mishra, ld. CIT DR (hereinafter referred to as the ld. DR) submitted that since the assessee had filed under the wrong section, which was not applicable to the assessee, the ld. CIT (Exemption) had no option but to reject the request as non-maintainable. However, he had not withdrawn the exemption of the assessee or held any adverse inference against it and therefore, the assessee could always apply for approval under section 80G(5)(iii) with a condonation petition. He therefore, prayed that the appeal was worthy of being dismissed. 4

ITA No. 133/VNS/2025 Kashi Anathalaya Association 6. We have duly considered the facts and circumstances of the case. It is seen that the assessee society had filed an application on 29.09.2024 as the provisional approval, which had been granted on 15.10.2021 had expired. However, instead of filing the application for grant of approval under section 80G(5)(iii), it had inadvertently filed application for approval under section 80G(5)(ii) and the ld. CIT (Exemption) has rejected it as non- maintainable on this account. In view of the fact that the ld. CIT (Exemption) has not drawn any adverse inference against the society after calling for all the details vide his notice dated 3.01.2025 and in view of the fact that the registration under section 12A has been renewed by the ld. CIT (Exemption) upto 2036-37, it is clear that the ld. CIT (Exemption) is satisfied with regard to the objects and the activities of the trust. That being the case, we deem it appropriate to in the interest of justice to restore the matter back to the file of the ld. CIT (Exemption) with a direction to him to obtain a application in the proper format, if he deems it necessary and thereafter to consider the said application in accordance with law and communicate an appropriate decision to the assessee. Accordingly, the matter stands restored to the file of the ld. CIT (Exemption). 7. In the result, the appeal of the assessee is held to be allowed for statistical purposes. Orders pronounced on 31.08.2026 in the open Court.

Sd/- Sd/- Sd/- [SUDHANSHU SRIVASTAVA] [NIKHIL CHOUDHARY] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 31/08/2026 sh

ITA No. 133/VNS/2025 Kashi Anathalaya Association