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Facts
The assessee's application for registration under section 80G(5)(iii) of the Income Tax Act, 1961 was rejected by the CIT(Exemption) for being filed beyond the prescribed time limit. The assessee contended that there was a technical error in selecting the correct clause on the online portal and that they were not given a proper opportunity of being heard.
Held
The Tribunal held that the rejection of the application solely on technical grounds without considering the merits and without providing a proper opportunity of hearing was not justified. The Tribunal set aside the order and remanded the matter back to the CIT(Exemption).
Key Issues
Whether the rejection of an application for registration under section 80G(5)(iii) solely on technical grounds of delay, without considering the merits or granting a proper opportunity of hearing, is valid? Whether the assessee should be allowed to rectify a technical error in filing the application on the online portal?
Sections Cited
80G(5)(iii), 80G(5), 80G
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA ‘A’ BENCH AT KOLKATA
Before: SHRI GEORGE MATHAN & SHRI RAKESH MISHRA
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Exemption), Kolkata [hereinafter referred to as Ld. 'CIT(Exemption)'] passed in respect of registration u/s 80G(5)(iii) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 22.02.2025. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal: “1) For that on the facts and circumstances of the case, Ld. CIT (Exemption) was grossly erred in rejecting the application filed for approval U/s 80G(5)(iii) of the Act 2) For that on the facts and circumstances of the case, the order of Ld. CIT (Exemption) rejecting the application filed for approval U/s 80G(5)(iii) is highly arbitrary, unjustified and unwarranted to the facts of the case. 3) For that on the facts and circumstances of the case, Ld. CIT (Exemption) was grossly erred in ignoring the existing registration of the assessee under ITA No(s). 814/KOL/2025 Assessment Year(s) N.A. Baba Basukinath Seva Mondal. section 80G(5) of the Act (before amendment) rejecting the application filed for approval u/s. 80G(5) of the Act (post amendment) 4) For that on the facts and circumstances of the case. Ld. CIT (Exemption) was grossly erred in ignoring the fact that the online application on IT portal did not provide an option for rectification of the proper clause under section 80G(5) in case of mistake happened and inadvertently wrong clause chosen by the assessee. 5) For that on the facts and circumstances of the case, Ld. CIT (Exemption) was grossly erred in rejecting the application of assessee only on account of technical error in choosing the proper clause u/s 80G(5) of the Act and has not considered the application on merit at all, which is improper 6) For that on the facts and circumstances of the case. Ld. CIT (Exemption) be directed to consider the application U/s 80G(5) afresh considering the application for approval dated 31/08/2024 as timely filed under clause (i) of the second proviso to section 80G(5) of the Act i.e. application for final approval U/s 80G of the Act 7) For that on the facts and circumstances of the case the rejection order dated 22/02/2025 passed by Ld. CIT (Exemption) is without according proper opportunity of hearing to the appellant, therefore the same was passed in violation of Principals of Natural Justice and hence the said order be quashed and/or set aside. 8) The appellant craves leave to produce additional evidences in terms of Rule 29 of the Income Tax (Appellate Tribunal) Rules 1963. 9) The appellant craves leave to press new, additional grounds of appeal or modify, withdraw any of the above grounds at the time of hearing of the appeal.”
Brief facts of the case are that the assessee was granted provisional approval u/s 80G(5)(iv) of the Act in Form No. 10AC by the CPC, Bangalore vide order dated 05.04.2022 for a period from 05.04.2022 to AY 2024-25. Subsequently, an application in Form No. 10AB under Rule 17A of the I.T. Rules, 1962 u/s 80G(5)(iii) of the Act for approval of the Trust was filed electronically. A notice was issued to the assessee on 15.01.2025 through ITBA on the e-mail ID given by the applicant Trust/Institution in its online application, with a request to furnish detailed note on the activities carried out by the assessee and certain details/documents as mentioned therein. In response to the ITA No(s). 814/KOL/2025 Assessment Year(s) N.A. Baba Basukinath Seva Mondal. said notice, the assessee furnished the details/documents. The submission of the assessee was examined and it was found that the assessee had already commenced its activities from the FY 2021-22. The extended due date for filling application in Form No. 10AB was 30.06.2024 as per the CBDT Circular No. 07/2024 dated 25.04.2024. However, it was seen that the assessee did not file the Form No. 10AB within the stipulated time limit. Since the application filed in Form No. 10AB u/s 80G(5)(iii) of the Act had not been filed within the time limit prescribed; therefore, the Ld. CIT (Exemption) rejected the application as filed beyond time and the Provisional Certificate issued to the assessee was also cancelled. Aggrieved with the order of the Ld. CIT (Exemption), the assessee has filed the appeal before the Tribunal.
Rival contentions were heard and the submissions made have been examined. It was submitted by the Ld. AR that the due date was extended to 30/06/2024, but the delay in filing the application in August 2024 was not condoned. The Bench was of the view that the Ld. CIT (Exemption) had denied the claim of exemption u/s 80G(5)(iii) of the Act on account of delay in filing the application in Form No. 10AB u/s 80G(5)(iii) of the Act by the assessee. It is mentioned in Ground No.
That the portal did not provide an option for rectification of the proper clause under section 80G(5) of the Act and the application has not been considered on merit at all. It was also argued that before rejecting the application, proper opportunity of being heard was not provided to the appellant. Apparently, the assessee is an old trust and the approval should have been provided for 5 years, as per clause (i) of the proviso below sub-section (5) of section 80G of the Act and the clause was inadvertently incorrectly filled up as per the submission of the assessee. Therefore, in the interest of justice and fair play, it was considered ITA No(s). 814/KOL/2025 Assessment Year(s) N.A. Baba Basukinath Seva Mondal. imperative that the assessee may be allowed another opportunity to file proper submission in response to the notice issued by the Ld. CIT (Exemption) for justifying the genuineness of the activities and claim of exemption. Hence, the order of the Ld. CIT (Exemption) is set aside and the matter is remanded to him for deciding the application afresh on merits after granting an opportunity of being heard to the assessee and seeking the reply from the assessee in respect of the queries raised and in accordance with law. The assessee shall file appropriate application seeking condonation of delay, if applicable, before the appropriate authority who shall consider the same and decide the same and thereafter, the application u/s 80G(5) of the Act shall be decided by the Ld. CIT (Exemption). Hence, all the grounds of appeal are partly allowed for statistical purpose.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 2nd April, 2026. [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 02.04.2026 Bidhan (Sr. P.S.) ITA No(s). 814/KOL/2025 Assessment Year(s) N.A. Baba Basukinath Seva Mondal. Copy of the order forwarded to:
Baba Basukinath Seva Mondal, 241, G.T. Road (N), Liluah, Howrah, West Bengal, 711204. 2. CIT(Exemption), Kolkata.
CIT(A)-
CIT-
CIT(DR), Kolkata Benches, Kolkata.
Guard File. //// By order