NAGRI EYE RESEARCH FOUNDATION,AHMEDABAD vs. THE CIT(EXEMPTION), AHMEDABAD

ITA 2317/AHD/2025Status: DisposedITAT Ahmedabad30 September 20265 pages
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What did the Tribunal hold?

The Tribunal condoned the delay of 790 days in filing the appeal, acknowledging the confusion surrounding the newly amended provisions and the inadvertent mistake made by the assessee in selecting the wrong clause. The Tribunal held that the mistake in picking the wrong clause should not be treated as fatal to the assessee's case, especially given the complexities and ambiguities in the amended provisions. The Commissioner of Income Tax (Exemption) should have recognized that the assessee was an existing and approved trust and processed the application under the appropriate clause (Clause (i) to the First Proviso to Section 80G(5)) rather than treating it as a newly formed trust under Clause (iv). The Tribunal set aside the impugned order of the CIT(E) and restored the matter to the CIT(E)'s file. The CIT(E) was directed to treat the assessee's application dated June 29, 2023, as filed under Clause (i) to the First Proviso to Section 80G(5) and consider it for renewal of approval in accordance with law, subject to fulfillment of other conditions. The CIT(E) was also directed to decide the application within six months of receiving the order. The appeal (ITA No. 2317/Ahd/2025) was treated as allowed for statistical purposes. The second appeal (ITA No. 1661/Ahd/2025) regarding rejection after provisional approval was dismissed as infructuous.

What were the facts?

The assessee, Nagri Eye Research Foundation, is registered under Section 12A and approved under Section 80G(5) of the Income Tax Act, 1961. Following amendments effective from April 1, 2021, existing trusts were required to reapply for registration/approval. The assessee filed an application for renewal of its Section 80G(5) approval on June 29, 2023, within the extended deadline. However, in the online Form 10A, the assessee inadvertently selected Clause (iv) instead of Clause (i) of the First Proviso to Section 80G(5), which is meant for newly formed trusts. The Commissioner of Income Tax (Exemption) processed the application under the wrong clause, granting provisional registration from AY 2024-25 to AY 2026-27, creating a break in the approval continuity. The assessee appealed this decision, facing difficulties due to the break in exemption.

What were the issues?

1. Whether the Tribunal should condone the delay of 790 days in filing the appeal, considering the complexities of new provisions and potential confusion. 2. Whether the inadvertent selection of the wrong clause (Clause (iv) instead of Clause (i) of the First Proviso to Section 80G(5)) by the assessee in its application for renewal of Section 80G(5) approval is fatal to its case, or if the Commissioner should have treated it as an application under the correct clause. Assessee's Contentions: - The assessee argued that due to the complexity of newly amended provisions, confusion arose among assessees, tax practitioners, and tax authorities, necessitating CBDT clarifications and circulars. - It was contended that the Commissioner should have either provided an opportunity to correct the application or treated it under the relevant clause applicable to an existing and approved trust. - The mistake in picking the wrong clause should not be treated as fatal, as it was an inadvertent error. - The break in approval continuity would cause significant difficulties and loss of exemption for two years. Revenue's Contentions: - The judgment does not record specific contentions from the revenue's side regarding the issues raised.

Which sections of the Income-tax Act were involved?

Section 12A,Section 80G(5)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD

Before: SHRI SANJAY GARG & SHRI GANGADHAR PANDA

For Appellant: Shri Rushin Patel, AR, Shri R P Rastogi, CIT. D.R
For Respondent: Shri R P Rastogi, CIT. D.R
Hearing: 29/09/2026Pronounced: 30/09/2026

Per Sanjay Garg, Judicial Member:

Both the captioned appeals relate to the same assessee are against the separate orders of even date 29.06.2025 passed by the Ld. Commissioner of Income Tax (Exemption), Ahmedabad (hereinafter referred to as “CIT(E)”).

2.

There is a delay of 790 days in filing the present appeal.

ITA Nos.1661 & 2317/Ahd/2025 [Nagri Eye Research Foundation vs. CIT(E)] - 2 –

3.

The brief facts of the case are that the assessee trust is registered u/s 12A of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) s

The order continues below.

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