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Facts
The assessee, an old charitable trust with existing Section 80G registration, inadvertently filed an application for provisional registration under clause (iv) of the first proviso to Section 80G(5) of the Income Tax Act instead of full registration under clause (i). This error resulted in the grant of provisional registration for three years (up to AY 2024-25) instead of the entitled five years (up to AY 2026-27). A subsequent application for extension of this provisional registration under clause (iii) was rejected by the Ld. CIT(E) for being filed out of time.
Held
The Tribunal condoned the delay in filing the appeal, finding reasonable cause. It held that the assessee, being an old trust, was entitled to full registration for five years under clause (i) of the first proviso to Section 80G(5). The inadvertent filing under the wrong clause (iv) should not disentitle the assessee. The Tribunal directed the CIT(E)/CPC to grant registration under Section 80G for AY 2022-23 to AY 2026-27 by treating the application as if filed under clause (i). Consequently, the rejection of the subsequent extension application was set aside, and both appeals were allowed.
Key Issues
Whether an inadvertent error in selecting the provisional registration clause instead of the full registration clause for an existing trust under Section 80G should negate its entitlement to full registration, and the validity of the rejection of a subsequent application for extension of such provisional registration.
Sections Cited
12AA, 80G, 80G(5), 80G(5)(i), 80G(5)(iii), 80G(5)(iv)
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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI GEORGE GEORGE K & SHRI S.R. RAGHUNATHA
आदेश /O R D E R
PER S. R. RAGHUNATHA, AM:
1. These appeals filed by the assessee are filed against the orders of the Commissioner of Income Tax (Exemption), Chennai, vide orders dated 19.02.2025 and 08.02.2022 in respect of rejection of application u/s.80G of the Act. 726 & 1895/Chny/2025
2. At the outset, we find that there is a delay of 1159 days in filing the appeal filed by the assessee, for which the assessee has filed an affidavit stating the reasons for delay, wherein, it is submitted that the assessee applied for renewal of its 80G registration by filing an application under clause (iii) of 1st proviso to section 80G(5) of the Act and the application got rejected by the ld.CIT(E) vide order dated 28.12.2024. The ld.AR of the assessee found out that the application filed earlier were incorrect and that the same needed to set right by filing appeals before the Tribunal. The assessee submitted that the appeal against the impugned order dated 08.02.2022 ought to have been filed on or before but the same has been filed on 15.04.2022 and hence prayed for condoning the delay. After considering the Affidavit filed by the assessee and also hearing both the parties, we find that there is a reasonable cause for the assessee in not filing appeal on or before the due date prescribed under the law and thus, in the interests of justice, we condone the delay in filing of appeal and admit the appeal filed by the assessee for adjudication.
3. The grounds raised by the assessee are as follows:
ITA. Nos: 726 /Chny/2025
1. The order of the CIT(Exemptions) dated 19.02.2025 vide DIN & Order No. ITBA/EXM/F/EXM45/2024-25/1073470918(1) for the above mentioned Assessment Year is contrary to law, fact and in circumstances of the case.
2. The CIT(Exemptions) erred in rejecting the Form No.10AB dated 28.08.2024 filed in the seeking final recognition under Section 80G(5)(iii) of the Act by reckoning the same to have been filed beyond the statutory time limit (on or before 30.09.2023) without assigning proper reasons and justification. 726 & 1895/Chny/2025
The CIT (Exemptions), Chennai failed to appreciate that dismissal of the application filed in Form No. 10AB in seeking final recognition would demonstrate the complete non application of mind on his part, there by vitiating the impugned order passed in its entirety.
4. The CIT (Exemptions), Chennai failed to appreciate that the mere delay in filing Form No. 10AB seeking final recognition would not automatically result in rejection of such claim and ought to have appreciated that having not exercised the inherent power to condone the delay in filing such Form vested upon them by the Finance Act No. 2 of 2024, the impugned order under consideration should be reckoned as bad in law.
5. The CIT (Exemptions), Chennai failed to appreciate that the genuineness of the trust would get fortified by the documents/details filed along with Statutory Form No. 10AB and hence ought to have appreciated that the rejection of the prayer for final recognition at the threshold stage without examining the details in this regard were wrong, erroneous, incorrect, invalid, unjustified and not sustainable both on facts and in law.
6. The CIT (Exemptions), Chennai failed to appreciate that the entitlement of final recognition for the appellant trust would get fortified by the compliance of all conditions prescribed in relation there to and hence ought to have appreciated that the findings in the rejection order should be considered as nullity in law. 7. The CIT (Exemptions), Chennai failed to appreciate that the order under consideration was passed out of time, invalid, passed without jurisdiction and not sustainable both on facts and in law. 8. The CIT(Exemptions) failed to appreciate that there was no proper opportunity given before passing of the impugned order and any order passed in violation of the principles natural justice would be nullity in law. 9. The Appellant craves leave to file additional grounds/arguments at the time of hearing.
ITA. No: 1895/Chny/2025
The order of the CPC, Bengaluru dated 08.02.2022 vide DIN & Order No. AAATR6944GF2022701 in granting recognition under Section 80G of the from 08.02.2022 is contrary to law, facts and in the circumstances of the case.
The CPC, Bengaluru erred in granting provisional recognition by overlooking the existence of such registration in terms of section 80G of the Act by virtue of the bonafide mistake / error committed in selecting the wrong dropdown while uploading the Form No. 10A for full recognition without assigning proper reasons and justification.
3. The CPC, Bengaluru failed to appreciate that the appellant was already granted recognition under Section 80G(5) of the Act on 24.11.2008 by the then office of the Commissioner of Income Tax 1, Coimbatore, the restriction in granting provisional recognition only till AY 2024-2025 in the impugned order was wrong, incorrect, invalid, unjustified, erroneous and not sustainable both on facts and in law. 726 & 1895/Chny/2025
4. The CPC, Bengaluru failed to appreciate that the bonafide error in selecting the dropdown in Section 80G(5) (iv) of the Act instead of Section 80G(5)(i) of the Act for getting the full recognition was not noticed and hence ought to have appreciated that in the absence of effective opportunity in the e-regime, the decision to grant provisional recognition as against the full recognition should be considered as factual mistake committed, requiring correction/modification in the final order / impugned order passed.
The CPC, Bengaluru failed to appreciate that the detailed specified in the application filed in Form No. 10A would demonstrate the fact that the appellant was an existing trust enjoying recognition under Section 80G of the Act and further ought to have appreciated that the impugned order passed by them in granting recognition only in the nature of the provisional as against the final recognition would tantamount to complete non application of mind on their part, thereby vitiating the impugned order passed in its entirety.
The CPC, Bengaluru failed to appreciate that there was no proper opportunity given before passing of the impugned order and any order passed in violation of the principles natural justice would be nullity in law.
7. The Appellant craves leave to file additional grounds/arguments at the time of hearing.
Brief facts of the case are that the assessee is a trust registered u/s.12AA of the Act vide order dated 08.02.2022 and also approved u/s.80G of the Act on 24.11.2008 by the ld.CIT(E). After the insertion of new provisions for registration by the Finance Act, 2021, the assessee ought to have filed an application in Form 10A for approval under clause (i) of 1st proviso u/s.80G(5)(i) of the Act on or before the extended due date of 30.06.2024 for obtaining regular registration for 5 years. However, the assessee inadvertently filed its application in Form 10A under clause (iv) of 1st proviso u/s.80G(5)(i) of the Act on 30.01.2022 for provisional registration. Processing the same, the ld.CIT(E) vide impugned order dated 08.02.2022 granted provisional registration to the assessee under clause (iv) of 1st proviso u/s.80G(5)(i) of the Act from 08.02.2022 to A.Y.2024- 25 (3 years).
726 & 1895/Chny/2025 5. The appeal in lTA No.1895/Chny/2025 has been filed challenging the order of the ld.CIT(E) dated 08.02.2022, where the Ld. CIT(E) has granted the assessee provisional registration for the period 08.02.2022 to A.Y.2024-25. Though the assessee was registered u/s.80G even prior to 01.04.2021, it only obtained a provisional registration due to its mistake of filing an application under clause (iv) instead of clause (i). The assessee then filed an application under clause (iii) of 1st proviso to section 80G on 28.08.2024 to extend its provisional registration. While processing the said application, the Ld. CIT(E) had rejected the application as not maintainable since the same was not filed within the stipulated time i.e. 30.06.2024.
6. Before us, the Ld. AR submitted that the assessee is an old trust, which obtained registration u/s.80G initially on 24.11.2008. As such, after 01.04.2021, it should have applied for registration under clause (i) of 1st proviso to section 80G, on or before 30.06.2024, which was the extended due date as per Circular No.7 of 2024. If the assessee had applied under clause (i), it would have obtained registration u/s.80G for 5 years (i.e.) until A.Y.2026-27. He submitted that the assessee had by inadvertence filed the application under clause (iv) on 30.01.2022 which has resulted in the assessee being granted provisional registration instead of registration for 5 years. He thus prayed that the application filed on 30.01.2022 be considered as an application filed under clause (i) and that the Ld. CIT(E) be directed to grant registration u/s.80G(5) of the Act for a period of 5 years being AY 2022-23 to AY 2026-27. He stated that mere incorrect filing of forms should not disentitle the assessee from the 726 & 1895/Chny/2025 statutory registration which it was entitled to. For the same, he relied on the decision of the co-ordinate bench of this tribunal in - Kaakkum Karangal vs. The ITO in and - Mahatma Eye Vision and Research Institute v The CIT(E) in & ITA No. 1008/Chny/2025.
In relation to the appeal in the Ld. AR submitted that once the assessee is registered under clause (i), it must renew the same by filing an application under clause (ii) within 6 months prior to expiry of the registration i.e. on or before 30th September 2025. Thus, if the assessee is granted registration under clause (i) for 5 years as prayed for in the application filed under clause (iii) on 28.08.2024 and the consequent order of the Ld. CIT(E) dated 19.02.2025 becomes infructuous as the application under clause (iii) is only applicable to new trusts possessing provisional registration under clause (iv).
Per contra the ld.DR strongly relied on the orders of the ld.CIT(E) and prayed for confirming the same.
We have heard the rival submissions and perused the material available on record and gone through the orders of the authorities. Firstly, it is an undisputed fact that the assessee possessed registration u/s.80G in the old regime vide order dated 24.11.2008. As per the new procedure for registration under the 1st proviso to section 80G(5), it should have filed an application under clause (i), which would have provided it registration for 5 years. However, as submitted by the Ld.AR, the application was by inadvertence filed under clause 726 & 1895/Chny/2025 (iv), accordingly the registration was given only from 08.02.2022 to A.Y.2024-
The appellant trust had time until 30.06.2024 to file an application under clause (i) and it would have obtained registration for 5 years. We agree with the arguments of the Ld. AR that the appellant was entitled to be registered for 5 years and merely for the reason that it had filed the application under incorrect clause by selecting the wrong drop-down, the same cannot be taken away. The same ratio has been held by the co-ordinate bench of this tribunal in Kaakkum Karangal vs. The ITO in ITA No.1561/Chny/2023.
Also, as per the provisions of section 80G, the assessee being an old trust, it should have filed an application under clause (i) only. Since clause (i) applies to the assessee, it could not have filed an application under clause (iv).
Hence, we direct the CIT(E) / CPC to grant recognition u/s.80G of the Act for 5 years (i.e.) A.Y.2022-23 to A.Y.2026-27 by treating the application as an application filed under clause (i) of the 1st proviso for which the assessee is otherwise entitled to. Hence, the appeal in is allowed for Statistical purposes.
Coming to the appeal in the order of the CIT(E) dated 19.02.2025 was passed in consequence of the application of the assessee dated 28.08.2024 under clause (iii). As rightly submitted by the Ld.AR, only a trust which has obtained provisional registration under clause (iv) can apply for extension of the registration under clause (iii). Since we have granted registration u/s.80G(5) for a period of five years, the application filed on 726 & 1895/Chny/2025 28.08.2024 under clause (iii) is incorrect and unsustainable. Hence, we set aside the order of the ld.CIT(E) dated 19.02.2025. Hence, the appeal in is allowed.
In the result, the assessee’s appeal in is allowed for Statistical purposes and the assessee’s appeal in is allowed. Order pronounced in the court on 25th September, 2025 at Chennai.