CARE AND SHARE CHARITABLE TRUST,TRICHY vs. CIT, EXEMPTIONS,, CHENNAI

Before the ld.CIT(E), the assessee contended that there was some confusion in the clause under which the form had to be filled and that since the assessee filed the form without any professional assistance, there was a delay of just 2 days in filing the same. Despite the assessee’s explanation, the ld.CIT(E) had rejected the application and hence the present appeal.

Before us, the Ld. AR of the assessee reiterated the submissions made before the ld.CIT(E) and further submitted that the provision being a benevolent one, must be liberally interpreted in favour of the assessee and a delay of just 2 days are not so significant, so as to deny the approval u/s.80G of the Act. It was further submitted that it is not mandatory that approval must be sought within the specified time limit and the provision is only directory in nature and if at all it is held as mandatory, powers exist

Per contra, the Ld.DR supported the views taken by the ld.CIT(E) and argued that the rejection is justified. The Ld.DR further submitted that when the law is explicit in not providing the ld.CIT(E) with the power to condone the delay in filing relevant application u/s.80G, while expressly providing the powers of condoning the delay when it comes to section 12AB, the action of the ld.CIT(E) is perfectly in order. The Ld.DR thus prayed that the appeal of the assessee may be dismissed.

We have heard the rival submissions and perused the materials on record and gone through the order of the ld.CIT(E). We find that the sole issue for consideration before us is that whether the assessee is eligible for the approval u/s.80G or not.

We find that the application has been made under clause (iii) of the proviso to sub section 5 of section 80G (as narrated in the facts above, application originally made under clause (ii) was requested by the assessee to be substituted with clause (iii) and hence we treat the application made under clause (ii) as an application made under clause (iii)), and clause (iii) reads as under, “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”. It can be seen that w.e.f. 01.10.2024 vide Finance (No.2) Act, 2024, Clause (iv) reads as under: “(in any other case) where activities of the institution or fund have-- (A) not commenced, at least one month prior to the commencement of the previous year relevant to the assessment year from which the said approval is sought; (B) commenced (and where no income or part thereof of the said institution or fund has been excluded from the total income on account of applicability of sub-clause (iv) or sub- clause (v) or sub-clause (vi) or sub-clause

The Legislature, in its wisdom had chosen to omit the rigorous conditions that originally stood prior to the amendment. It can be seen that it is an enabling amendment, wherein any charitable institution, where its activities have commenced and where, even if it had claimed income exemptions specific to charitable institution, can still apply for registration u/s.80G(5) of the Act. Accordingly, it permits any assessee, which had missed the timeline specified under clause (iii), to apply under clause (iv) sub clause (B) of the 1st proviso to sub-section 5 of Section 80G of the Act. Consequent to this amendment, if the assessee applies under clause (iv) today, subject to the fulfilment of other conditions, would not be ineligible for the approval, owing to the limitation of time which is specific to clause (iii). It is further pertinent to note that at the time of filing the application on 02.10.2024, the benefit of (iv) was available in the statute books. Further, we note that this Tribunal has already decided this issue in favour of the assessee in similar set of facts and circumstances in its order in dated 12.09.2025.

With this observation and respectfully following the decision of the Tribunal (supra), in the interest of justice, we direct the ld.CIT(E) to treat the application made on 02.10.2024 under clause (iii) of 1st proviso to subsection 5 of section 80G, as an application made under sub-clause (B) of clause (iv) of 1st proviso to sub-section 5 of section 80G of the Act and verify all other conditions stipulated under the Act for grant of registration u/s.80G of the Act and accordingly dispose of the application on merits, in accordance with law. For the purpose of the time limit within which the application

In the result the appeal of the assessee is allowed for statistical purposes.