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Facts
The assessee, a charitable trust, applied for approval under Section 80G of the Income Tax Act, 1961. The CIT(E) rejected the application on the grounds that it was filed after the due date, despite a provisional approval having been obtained earlier. The assessee argued that the timelines were directory and relied on a coordinate bench decision.
Held
The Tribunal found that a new clause (iv) had been inserted into Section 80G(5) by the Finance Act, 2024, which allowed applications to be made at any time after commencement of activities. The Tribunal directed the CIT(E) to reconsider the application in light of this amended provision, providing an opportunity for a hearing.
Key Issues
Whether the CIT(E) was correct in rejecting the Section 80G approval application solely on the ground of delay, or if the amended provisions allowing for application at any time should be considered.
Sections Cited
80G, 119, 10, 12A
AI-generated summary — verify with the full judgment below
This appeal by the assessee is directed against the order of learned Commissioner of Income Tax (Exemptions), Chennai [in short, the ld. CIT(E)] dated 03/06/2025 passed under Section 80G of the Income Tax Act, 1961 (in short, the Act) wherein the ld. CIT(E) rejected the application filed under Section 80G read with application dated 21/10/2024 filed in Form 10AB under Rule 11AA of the Income Tax Rules, 1962 (in short, the Rules) seeking approval under clause (iii) of 1st proviso to sub-section (5) of Section 80G of the Act.
The ld. CIT(E) vide the impugned order, rejected the application under Section 80G of the Act by holding as under:
“4.1 Provisional Approval: The applicant trust, though, established on 02/08/2021 vide its trust deed but has obtained provisional approval under Section 80G
2 ITA1932/Chny/2025 63 Nayanars Charitable Trust Vs CIT(E) from CPC on 20/10/2021 in Form 10AC for the period from A.Y. 2022-23 to A.Y. 2024-25. 4.2 Thus as explained in the show cause notice dated 29/04/2025, the applicant trust ought to have applied for approval under Section 80G in Form 10AB on or before September 2023 (i.e. 6 months prior to the expiry of the period of provisional approval. In this case, the provisional approval expired on AY 2024-25 relevant to PY 2023-24 and thus the applicant ought to have applied on or before September, 2023 or before the extended due date of 30/06/2024.) For brevity, the relevant provisions of Section 80G(5)(iii) is reproduced 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’:
Further, the CBDT Circular No. 7/2024 dated 25/04/2024 extended the time limit to 30th June, 2024. The relevant extracts stated in clause (ii) of the circular is r reproduced as under:
3. On consideration of the matter, with a view to avoid and mitigate genuine hardship in such cases, the Board, in exercise of the powers conferred under Section 119 of the Act, hereby extends the due date of making an application/intimation electronically in- (ii) Form No. 10AB, in case of an application under clause (iii) of the first proviso to clause (23C) of section 10 or under sub-clause (iii) of clause (ac) of sub-section (1) of section 12A or under clause (iii) of the first proviso to sub-section (5) of section 80G of the Act, till 30/06/2024.
4.3 But in this case, the applicant trust has applied for approval u/s 80G in Form 10AB only after the expiry of due date i.e. on 21/10/2024 with the delay of 112 days. Hence, application seeking approval u/s 80G cannot be considered for approval as per the provisions of section 80G(5)(iii) of the Income Tax Act. 4.4 It is pertinent to mention that there is no mandatory provision in the Income Tax Act to condone the delay in filing Form 10AB seeking approval u/s 80G as available in condoning the delay in filing Form 10AB seeking registration u/s 12AB as per the Finance Act, 2024. Considering all the above legal provision,
3 ITA1932/Chny/2025 63 Nayanars Charitable Trust Vs CIT(E)
I am constrained to reject the belated application filed in Form 10AB seeking approval u/s 80G. 4.5 Therefore, the application dated 21/10/2024 filed in Form No. 10AB under clause (iii) of first proviso to section 80G(5) of the Income Tax Act, 1961 seeking approval u/s 80G is not maintainable for the reasons stated in para 4.1 to 4.4 of this order and hence, the same is rejected.”
Aggrieved by the order of ld. CIT(E), this appeal has been filed before this Tribunal. During the appellate proceedings before us, the ld. AR of the assessee submitted that the ld. CIT(E) rejected the assessee’s application for registration under Section 80G(5)(iii) of the Act on technical ground without considering the objects and activities of the trust on merit. The time lines provided in Section 80G(5)(iii) of the Act is directory in nature and thus, the exemption should not have been denied on the ground that the application was filed belatedly. Thus, the ld. CIT(E) should have condoned the delay and should have granted registration on merit. The ld. AR of the assessee also placed reliance on the decision of the Coordinate Bench of this Tribunal dated 25/07/2025 passed in in the case of Aalayam Vs CIT(E) wherein the Coordinate Bench of this Tribunal has held as under:
“6. We have heard the rival submissions, and perused the materials available on record. The assessee made application under clause (ii) of first proviso to sub- section (5) of Section 80G of the Act seeking approval u/s 80G of the Act on 30/09/2024. 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 as provided in CBDT Circular No. 7/2024 dated 25/04/2024. However, it is noted that clause (iv) has now been inserted into 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 commencement of its activities. This provision is disjoint from clause (iii), which governed the earlier timeline. The ld. CIT(E) has 4 ITA1932/Chny/2025 63 Nayanars Charitable Trust Vs CIT(E) passed the order rejecting application on 12/02/2025 after the amendment had come into force, as non-maintainable. We, therefore, direct the ld. CIT(E) to treat the application filed on 22/08/2024 as having been filed under clause (iv)(B) of the first proviso to Section 80G(5), and decide in accordance with the law. In view of the above, the appeal filed by the assessee is allowed for statistical purposes only.” The ld. AR of the assessee, therefore, submitted that in view of the decision cited as above, the ld. CIT(E) should be directed to reconsider its application and
On the other hand, the ld. CIT-DR supported the order of ld. CIT(E).
We have considered the rival submissions and in view of the amended provision as provided in CBDT Circular No. 7/2024 dated 25/04/2024, we direct the ld. CIT(E) to consider the application of the assessee-trust in light of the amended provisions where clause (iv) has been inserted into the first proviso to Section 80G(5) by the Finance Act, 2024 and decide the matter accordingly after providing reasonable opportunity of hearing to the assessee. In the result, the grounds of appeal raised by the assessee are allowed for statistical purposes only.
In the result, this appeal of assessee is allowed for statistical purposes.
Order pronounced in the open court on 26/09/2025.