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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SMT. BEENA PILLAI & SHRI GIRISH AGRAWAL
Per: Smt. Beena Pillai, J.M.: The present appeal filed by the assessee arises out of order dated 20/03/2025 passed by CIT (Exemptions), Mumbai for assessment year 2024-25 on following grounds of appeal : “1) The Appellant Trust was formed in 1897 and registered with the Charity Commissioner Office since 1953. The Appellant Trust is registered with the Income Tax department since 1974 u/s 12A.
A.Y. 2024-25 Gaud Brahman Sabha The trust sought registration under the new Income Tax Rules since 2021. The Ld. CIT(E) has erred in cancelling the provisional registration granted to the Appellant Trust u/s 80G(5)(iv) dated 15.06.2023. 2) The learned Commissioner of Income Tax has erred in law as well as on facts in rejecting the approval sought under section 80G of the Act only on the basis that the application was not filed within the time limit prescribed in respect of application filed under clause (iii) of first proviso to sub-section (5) of Section 80G as the trust had already commenced its activities way back in the year 1897 which is bad in law. 3) The learned Commissioner erred upon in understanding and interpreting the language of the clause (iii) of the first proviso to sub section (5) of the Section 80G 4) The appellant craves leave to add, alter, amend or modify any of the grounds of appeal at any time before the time of hearing and make the necessary submissions.” Brief facts of the case are as under:
The assessee is a Charitable Trust formed in the year 1897 and registered with the Charity Commissioner in the year 1953. The assessee was registered u/s 12A of the Act since 1974 vide letter dated 07/02/1974 bearing registration No. BMY/INS/G(a)/3/73-74. The assessee was registered under New Income Rules bearing Registration No. AAATG5632LE20212 dated 15/10/2021 The activities carried out by the assessee are in the nature of aid to the public/ people at large residing in the area of Mumbai, Kokan Maharashtra. There is no dispute that the Income or surplus arising from the activities of the assessee is applied for the objects of the Trust as stipulated in the Memorandum of Association/Trust Deed. The main objects of the assessee are as under:
A.Y. 2024-25 Gaud Brahman Sabha • Promoting the development of the Kudaldeshkar Gaud Brahmin community. • Fostering solidarity and brotherhood among community members. • Organizing community events, publishing a quarterly magazine (Gaud Brahmin), and maintaining a library. • Providing medical and educational assistance to community members. 2.1 It is submitted that, the assessee was granted provisional registration under Section 80G(5)(iv) dated 15/06/2023, valid from AY 2024-25 to AY 2026-27. On 24/09/2024, the assessee applied for regularization of Section 80G approval in Form 10AB under Section 80G(5)(iii). The Ld.CIT(E) rejected the application, by observing that it should have been filed by December 2023, citing the proviso to Section 80G(5)(iii): “where the institution or fund has been provisionally approved, at least six months prior to expiry of the period of the provisional approval or within six months of commencement of its activities, whichever is earlier." 2.2 The assessee submitted before Ld.CIT(E) that, this interpretation is erroneous, as the assessee, was formed in 1897 and operational since then and, could not have applied within six months of commencing its activities, as the Income Tax Act was enacted much later. It was also substituted that, the proviso's clause applies only to newly formed trusts, and not for existing ones like the assessee. 2.3 It is submitted that in case of old existing trust like the assessee the applicable timeline is six months prior to the expiry of provisional approval i.e., by 31/12/2024 and that the A.Y. 2024-25 Gaud Brahman Sabha application was filed by the assessee on 24/09/2024. Therefore it was submitted that, application was within the period of limitation. The assessee placed reliance on the following decisions in support of its contention: (a) R.L. Education Sanstha v. CIT (Exemption), ITAT Pune (ITA No. 1177/PUN/2023) (b) Saaksh Foundation v. CIT (Exemption), ITAT Mumbai:
& 3701 /Mum/2023 (c) Agrasain Bhawan Trust v. DCIT, ITAT Delhi: ITA No:- 2591/Del/2024 (d) Anudip Foundation v. CIT (Exemption), ITAT Kolkata: (e) Chopade Charitable Trust v. CIT (Exemption), ITAT Pune: ITA No.718/PUN/2024 (f) Indian Red Cross Society v. CIT (Exemption), ITAT Chandigarh: ITA NO. 460/Chd/2024 (g) Pracheen Shri Aggarwal Digamber Jain Panchayat v. CIT (Exemption), ITAT Delhi (h) Shri Kabir Kirti Mandir Kashi v. CIT (Exemption), ITAT Rajkot: Delay for a trust formed in 1974 was condoned, as compliance with the "commencement" clause was impossible. (i) T.B. Lulla Charitable Foundation v. CIT (Exemption), ITAT Pune (j) Tomorrow's Foundation v. CIT (Exemption), ITAT Kolkata 2.4 The Ld.CIT(E) rejected the submissions of the assessee by observing as under:-
A.Y. 2024-25 Gaud Brahman Sabha “3.1 Thus, as per the above provision, the trust should have applied either within six months of start of activities or at least six months prior to expiry of the period of the provisional approval i.e. before September 2025 whichever is earlier. As the trust has been carrying out activities before obtaining provisional approval, thus, the applicant trust must have applied for regularization of provisional approval latest by the end of the month of December, 2023. However, the trust has filed application for regularization of provisional approval order u/s 80G on 24.09.2024 which is not valid as per the above provision as the application is filed beyond permissible time limit. 3.2 Further, on perusal of records, it is seen that as per point no. 3(1) of the trust deed/MOA, it is clearly evident that the trust is involved in activities which is favouring a particular religious community "Kudaleshkar Gaud Brahman Community" which is in violation of section 13(1)(b) of the Income tax Act ('the Act' hereafter) and is also defined as violation as per clause (d) of explanation to section 12AB(4) of the Act.
4. In view of the above, an opportunity was provided to the applicant vide DIN & Notice No. ITBA/EXM/F/EXM43/2024- 25/1073961835(1) dated 04.03.2025 to show cause why the application in Form 10AB should not be rejected on the grounds of application filed beyond permissible time limit and violation of section 13(1)(b) and other information like proof of activities and expenses on the objects of the trust was called for. In response, the applicant vide letter dated 08.03.2025 submitted online has enclosed proof of activities and expenses alongwith bank statement. However, no response is received regarding the issue of application filed beyond permissible limit. 4.1 It is appropriate to mention that the due date of filing application on or before 30.06.2024 as per the said circular was an extension provided by the board to all the Trust/Institution to file/re-file their applications under certain conditions. However, the applicant has not been able to show any reasonable cause for delay or to establish that the applicant trust had genuine hardship in filing of the application within the due date.
5. Thus, in view of the above the application for regularization of provisional approval in Form 10AB filed by the assessee is not allowable on the ground of late filing of application. For statistical purposes, this application is non-maintainable and stands rejected.”
A.Y. 2024-25 Gaud Brahman Sabha Aggrieved by the order of Ld.CIT(E), the assessee is in appeal before this Tribunal. 3. The Ld.AR submitted that, 80G cannot be rejected to assessee in the present facts of the case and relied on the submissions as reproduced hereinabove. 3.1 The Ld.DR on the contrary relied on the orders passed by the authorities below.
We have perused the submissions advance by both sides in the light of record placed before us.
Admittedly the assessee is in existence prior to the amendment to section 12AB. In a situation like the that of assessee, the date of provisional approval is of importance and not the date of commencement of activities, and between the two the former would prevail over later. On question of compliance of due date i.e; 30/09/2022 / 30/06/2024, the CBDT vide Circular No. 7 of 2024 dated 25/04/2024 extended the time to file Form 10AB. 4.1 In the present case since the assessee society had obtained provisional approval w.e.f 15/06/2023, it was incumbent bent upon them to have filed Form No. 10AB on or before 31/12/2024. It is noted that, the assessee filed Form 10AB on 24/09/2024 much before the expiry of six months. The assessee’s case is therefore covered by first limb of second proviso to Section 80G(5)(iii). The second/limb deals with the commencement of the activities which is not applicable to the present facts and circumstances of the case. The expression “Whichever is earlier has to be applied in respect of already A.Y. 2024-25 Gaud Brahman Sabha existing trust like assessee before us under the first limb of the sub-clause (iii) to proviso no.2.” 4.2 The facts in assessee’s case is of the provisional approval on 15/06/2023 after incorporation of society and thus assessee had commenced its activities from the date of formation in the year 1897. Therefore the date of commencement is of no significance. The Form No. 10AB has to be contemplated from the date of receipt of provisional registration as a consequence for final approval was filed on 24/09/2024 within due date of expiry of six months period from date of provisional approval.
Based on the above discussion we remit this issue back to the Ld.CIT(exemption) to consider the claim of assessee in accordance with law and to passed a order on merit by granting proper opportunity of being heard to the assessee Accordingly the grounds raised by the assessee is allowed. In the result the appeal filed by the assessee is allowed. Order pronounced in the open court on 18/07/2025 Sd/- Sd/- (GIRISH AGRAWAL) (BEENA PILLAI) Accountant Member Judicial Member Mumbai: Dated: 18/07/2025 Poonam Mirashi, Stenographer Copy of the order forwarded to:
(1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T.