LITTLE ROSE EDUCATIONAL AND CHARITABLE TRUST,THANJAVUR vs. CIT, EXEMPTIONS,, CHENNAI

This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Exemptions), (hereinafter referred to as “the Ld.CIT(E)”), Chennai, dated 23.04.2024 rejecting the application dated 31.10.2023 filed in Form 10AB seeking registration u/s.12A(1)(ac)(iii) of the Income Tax Act, 1961 (hereinafter referred to as "the Act”).

At the outset, the Ld.AR of the assessee brought to our notice that the appeal has been filed belatedly by ‘299’ days and assessee has filed an affidavit explaining the cause for the delay. Having gone through the contents of the same, we find that cause for delay was reasonable, so we excuse the same and proceed to hear the assessee’s appeal on merits.

The brief facts are that the assessee is an old charitable trust enjoying 12A registration from the year 2002 onwards. After the new regime came into operation, the assessee on 06.04.2022 applied for provisional registration u/s.12A(1)(ac)(i) of the Act and approval was granted w.e.f. the same date for five (5) years i.e. from AYs 2022-23 to AY 2026-27. Thereafter, the second application was filed inadvertently by the assessee under sub-clause (iii) of Section 12A(1)(ac) of the Act which was rejected. According to the Ld.AR, due to complexities in applying for registration u/s.12AB of the Act and especially while e-filing due to inadvertent error in choosing the drop-down menu, the assessee inadvertently clicked Clause (iii) instead of under Clause (ii) of Section 12A(1)(ac) of the Act, which mistake resulted in rejection of the application. At the same time, it was brought to our notice that the assessee in any case was enjoying registration till AY 2026-27 and ought to have sought for renewal/regular registration before six (6) months prior to the period of expiry of provisional registration. Therefore, second (AY -) Little Rose Educational & Charitable Trust :: 3 ::

Per contra, the Ld.DR doesn’t want us to interfere with the action of the Ld.CIT(E).

Having heard both the parties and after perusal of the records, we note that the assessee is an old charitable trust doing charitable activities and had been enjoying registration u/s.12A of the Act from the year 2002 onwards; and pursuant to the amendment brought in 2021, the assessee applied for registration u/s.12A of the Act which was provisionally granted for five (5) years and Form 10AC was issued accordingly [i.e. from AYs 2022-23 to 2026-27]. The assessee being an old Trust, ought to have thereafter applied for renewal/regular registration under Clause (ii) of Section 12(A)(1)(ac) of the Act, six (6) months before expiry of the provisional registration i.e. AY 2026-27. However, the assessee inadvertently filed application under Clause (iii) if Section 12A of the Act on 30.01.2023 which has been rejected on the ground that the assessee should have filed its application within six (6) months of commencement of its activities, which reason itself ex-facie erroneous, since assessee had commenced its activities way back in 2002 and therefore, it was impossible to have filed such an application way back in 2002. From the records of the assessee itself, the Ld.CIT(E) should have inferred that the (AY -) Little Rose Educational & Charitable Trust assessee had inadvertently filed application under Clause (iii) and by taking note that there was valid registration till AY 2026-27 should have pointed out the same, instead, he has preferred to reject the same without application of mind. In the light of the above discussion, in the interest of justice and fair-play and also taking note of the complexities in filing of the application for registration u/s.12A/80G of the Act and the conundrum created because of the drop down menu etc., while e-filing application, we are of the view that for the ends of justice and fair-play, the impugned order need to be cancelled and the premature application filed by the assessee dated 31.10.2023 under the wrong clause (iii) instead of (ii) ought to be treated as non-est; and consequently, the registration already granted/Form 10AC on 06.04.2022 would stand restored. Meaning the assessee would be enjoying registration for five (5) years from AYs 2022-23 to 2026-27 already granted by the Ld.CIT(E).

In the result, appeal filed by the assessee is allowed for statistical purposes.