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Facts
M/s. Unico Charitable Trust, a public charitable trust, had obtained provisional approval under Section 80G. It was required to file Form 10AB for regular approval by September 2024 but filed it on 30.12.2024, resulting in a 90-day delay. The CIT(E) rejected the application for regular approval under Section 80G as not maintainable due to this delay.
Held
The assessee had filed a petition for condonation of delay in filing Form 10AB before the CBDT under Section 119(2)(b) of the Act, which was pending. As the CBDT's decision on condonation has a direct bearing on the Section 80G approval, the Tribunal restored the matter to the CIT(E) to pass a fresh order after the Competent Authority decides on the condonation application.
Key Issues
Whether the CIT(E) was justified in rejecting the application for regular approval under Section 80G solely due to a procedural delay in filing Form 10AB, especially when a condonation of delay petition was pending before the CBDT.
Sections Cited
80G, 80G(5)(iii), 119(2)(b)
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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI GEORGE GEORGE KAND
आदेश /O R D E R PER GEORGE GEORGE K, VICE PRESIDENT:
This appeal filed at the instance of the assessee is directed against the Commissioner of Income Tax (Exemption), Chennai order dated 24.04.2025, rejecting Form No.10AB filed for seeking approval under section 80G of the Income Tax Act, 1961 (hereinafter the ‘Act’).
Brief facts of the case are as follows: The assessee is a public charitable trust established on 13.06.2020 and is engaged in carrying out charitable activities as per the objects enshrined in its Trust Deed. The assessee trust had obtained provisional approval u/s.80G of the Act vide Form 10AC dated 28.02.2023 valid for the period from assessment years 2023-24 to 2025-26. As per the provisions of section 80G(5)(iii) of the Act, the assessee trust was required to file Form 10AB for regular approval atleast six months prior to the expiry of provisional registration or within six months of the commencement of its activities, whichever is earlier. The assessee trust ought to have applied for approval u/s.80G in Form 10AB on or before September 2024. However, the assessee trust filed Form 10AB on 30.12.2024 with a delay of 90 days. Therefore, the CIT(E) rejected the assessee’s application dated 30.12.2024 in Form 10AB seeking approval u/s.80G of the Act as not maintainable.
3. Aggrieved by the order of the CIT(E), the assessee filed the present appeal before the Tribunal. The grounds raised
by the assessee read as follows:-
1. The CIT (Exemptions) erred in rejecting the application for approval under section 80G solely on account of the delay of 90 days in filing Form 10AB, without appreciating the bonafide and reasonable cause for such delay.
2. The CIT (Exemptions) failed to appreciate that the Appellant had already been granted provisional approval under section 80G, and the application filed was in continuation of the same. The rejection on a mere technical ground defeats the objective of the law.
The rejection of the application defeats the very object of Section 80G, which is bonafide charitable institutions and facilitate donations through tax incentives.
4. The learned CIT (Exemptions) failed to consider the settled judicial principle that procedural delay should not override substantial justice and that technicalities should not defeat meritorious claims.
5. The learned CIT (Exemptions) erred in not invoking the CBDT's powers under Section 119(2)(b) of the Act to condone the delay and consider the application on merits, especially when the genuineness of the Trust's activities was not under dispute. 6. The order is bad in law as it disregards the constitutional principle of fairness in administrative action and fails to strike a balance between law and equity.
Before us, the Ld.AR for the assessee submitted that assessee has filed a petition for condonation of delay in filing Form 10AB before CBDT u/s.119(2)(b) of the Act, dated 17.07.2025. It was submitted that since the condonation petition u/s. 119(2)(b) of the Act before the competent authority has direct bearing, the matter may be restored to the files of the CIT(E) to await the decision of the Competent Authority on the condonation application filed in terms of section 119(2)(b) of the Act.
The Ld.DR supported the order of the CIT(E).
We have heard rival submissions and perused the material on record. The assessee had approached the Competent Authority u/s.119(2)(b) of the Act for condonation of delay in filing Form 10AB.
The assessee’s application for condonation of delay u/s.119(2)(b) of the Act has a direct bearing as regards approval u/s.80G of the Act. Since the assessee’s application of condonation of delay in filing the Form 10AB is pending consideration before the Competent Authority, we deem it appropriate to restore the case to the files of the CIT(E). The CIT(E) is directed to pass afresh order after the Competent Authority has passed the order regarding the assessee’s petition for condonation of delay in filing Form 10AB. It is ordered accordingly.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 13th August, 2025 at Chennai.