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Facts
The assessee, a charitable trust, filed an application for approval under Section 80G(5) on 13.12.2024, which was rejected by the CIT(E) for being filed after the due date specified by CBDT Circular No. 7/2024. The assessee contended that a new clause (iv) inserted into Section 80G(5) by the Finance Act, 2024, effective 01.10.2024, permits applications at any time after commencing activities.
Held
The Tribunal observed that the amendment to Section 80G(5) inserting clause (iv) came into force on 01.10.2024, which was prior to the CIT(E)'s rejection order dated 10.06.2025. Therefore, the assessee's application should have been considered under the new provision. The Tribunal set aside the CIT(E)'s order and directed a fresh decision under clause (iv)(B) of Section 80G(5) after providing a hearing opportunity.
Key Issues
Whether an application for Section 80G approval, initially rejected for being time-barred, should be re-considered under a newly inserted statutory provision that allows such applications to be filed at any time, especially when the rejection occurred after the new provision came into effect.
Sections Cited
80G, 80G(5), 80G(5)(ii), 80G(5)(iv), 80G(5)(iv)(B)
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Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI GEORGE GEORGE K & SHRI JAGADISH
आदेश / O R D E R
PER JAGADISH, A.M : Aforesaid appeal filed by the assessee arises out of the order of Learned Commissioner of Income Tax (Exemptions), Chennai [hereinafter “CIT(A)”] dated 10.06.2025 seeking approval u/s.80G of the Income tax Act, 1961 (hereinafter “the Act”).
Outreach Educational and Charitable Trust :- 2 -:
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.
The assessee had filed an online application on 13.12.2024 in Form No. 10AB under clause (ii) of the first proviso to section 80G(5)
of the Act. The Ld. CIT(E) rejected the application holding that the trust was required to file the application on or before September, 2024, in view of CBDT Circular No. 7/2024 dated 25.04.2024. Since the assessee had filed its application only on 13.12.2024, i.e., after the expiry of the due date, the Ld. CIT(E) held the application to be not maintainable.
The Learned Authorized Representative (AR) of the assessee has submitted that the assessee had filed an application under clause (ii) 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 2024, i.e., six months prior to the expiry of the provisional approval period. 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 submitted that Section Outreach Educational and Charitable Trust :- 3 -:
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 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 at 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) come into force.
On the other hand, the Ld. Departmental Representative (DR), has relied on the orders of CIT(E) and argued that assessee can now file fresh application as per the amended provision under clause (iv)(B) of Section 80G(5) of the Act.
Outreach Educational and Charitable Trust :- 4 -:
We have heard the rival submissions, and perused the materials available on record. The assessee made an 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 13.12.2024. 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) of the Act at any time after commencement of its activities. This provision is disjoint from clause (iii), which governed the earlier timeline. In the present case, the Ld. CIT(E) passed the order rejecting the assessee’s application on 10.06.2025, i.e., after the amendment had already come into force.
In these circumstances, we are of the view that the application filed by the assessee on 13.12.2024 ought to have been considered as an application under clause (iv)(B) of the first proviso to section 80G(5) of the Act. We accordingly set aside the impugned order and direct the Ld. CIT(E) to treat the application as filed under clause (iv)(B) and to Outreach Educational and Charitable Trust :- 5 -: decide the same afresh in accordance with law, after affording reasonable opportunity of hearing to the assessee.
In the result, the appeal filed by the assessee is allowed for statistical purposes.