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Facts
The assessee, V. Narayana Iyer Charities, applied for approval under Section 80G of the Income Tax Act on 29.09.2024. The CIT(E) rejected this application on 14.03.2025, deeming it non-maintainable due to a delay in filing beyond the prescribed deadline of 30.06.2024, as per CBDT Circular No.7/2024. The assessee had provisional approval until AY 2024-25.
Held
The Income Tax Appellate Tribunal noted that the Finance Act, 2024, introduced clause (iv) to the first proviso of Section 80G(5) with effect from 01.10.2024, allowing trusts to apply for approval at any time after commencing activities. Since the CIT(E)'s rejection order was passed after this amendment came into force, the Tribunal directed the CIT(E) to reconsider the assessee's application, treating it as filed under the new provision.
Key Issues
Whether an application for Section 80G approval, initially deemed belated and rejected by the CIT(E), should be reconsidered by the CIT(E) in light of legislative amendments introduced by the Finance Act, 2024, which allow such applications to be filed at any time after the commencement of activities.
Sections Cited
80G, 80G(5), 80G(5)(ii), 80G(5)(iii), 80G(5)(iv), 80G(5)(iv)(B)
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Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI S.R.RAGHUNATHA
आदेश / O R D E R
PER ABY T. VARKEY, JM:
1. This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Exemptions), (hereinafter referred to as ‘Ld.CIT(E)‘), Chennai, dated 14.03.2025 seeking approval u/s.80G of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘).
The sole ground of appeal in this appeal of assessee is against rejection of application seeking approval u/s.80G of the Act on the ground that the same is not maintainable.
(AY -) V. Narayana Iyer Charities :: 2 ::
The assessee had filed an application dated 29.09.2024 in Form No.
10AB under clause (ii) of the first proviso to sub-section (5) of Section 80G of the Act. The Ld.CIT(E) rejected the application on the ground that the trust was required to file the application by 30.06.2024, as presented by the CBDT Circular No.7/2024 dated 25.04.2024. And since assessee has filed it belatedly on 29.09.2024, with a delay of ‘91’ days, the Ld.CIT(E) held the ibid application to be not maintainable.
The Ld.AR representing the assessee has submitted that the assessee trust had obtained provisional approval u/s.80G of the Act on 08.02.2022 up to AY 2024-25, and had filed an application under clause (iii) of the first proviso to sub-section (5) of Section 80G of the Act. As
per the earlier provisions, the application was required to be made on or before September 2023, i.e., six (6) months prior to the expiry of the provisional approval period, which ended on 31.03.2024. Subsequently, the CBDT issued Circular No.7/2024 dated 25.04.2024, extending the due date for filing the application to 30.06.2024. The Ld.AR further brought to our notice that Section 80G has been amended by inserting clause (iv) in the first proviso to Section 80G(5), which now allows an assessee that has commenced its activities to apply for approval at any time after such commencement. Accordingly, it was submitted that the assessee’s application may be considered under clause (iv)(B) of Section 80G(5) of the Act. The Ld. AR also referred to the Memorandum explaining the (AY -) V. Narayana Iyer Charities :: 3 ::
provisions of the Finance Bill, 2024, wherein the insertion of clause (iv) was proposed to rationalize the timeline for filing the application for approval by providing to file application any time after commencement of activities. In view of this amendment, the Ld. AR requested that the approval may be granted with effect from 01.10.2024, being the date from which the amended provisions under clause (iv) of Section 80G(5) came into force.
On the other hand, the Ld.DR representing the department, has relied on the orders of the Ld.CIT(E) and contended that assessee may now file fresh application as per the amended provision under clause (iv)(B) of Section 80G(5).
We have heard the rival submissions, and perused the materials available on record. The assessee made application under clause (iii) of first proviso to sub-section (5) of Section 80G of the Act seeking approval u/s. 80G of the Act on 29.09.2024. The Ld. CIT(E) has rejected the application as not maintainable on the ground that the assessee has not filed the application before 30.06.2024 which is the cut-off date prescribed by the CBDT Circular No.7/2024 dated 25.04.2024. However, it is noted that clause (iv) has now been inserted in the first proviso to Section 80G(5) by the Finance Act, 2024, w.e.f. 01.10.2024 to enable assessee trust to apply for approval u/s 80G(5) at any time after (AY -) V. Narayana Iyer Charities commencement of its activities. This provision is disjoint from clause (iii), which governed the earlier timeline. The Ld.CIT(E) has passed the order rejecting application on 14.03.2025 after the amendment had come into force, as non maintainable. We, therefore don’t countenance the action of the Ld.CIT(E) and instead direct the Ld. CIT(E) to treat the application filed on 29.09.2024 as having been filed under clause (iv)(B) of the first proviso to Section 80G(5), and decide in accordance with the law after hearing the assessee. The assessee to participate and file relevant documents requisitioned by the Ld.CIT(E). In view of the above, the appeal filed by the assessee is allowed for statistical purposes only.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on the 07th day of October, 2025, in Chennai.