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Facts
The assessee foundation filed an application for approval under section 80G(5)(iii) of the Income Tax Act, 1961, which was rejected by the CIT(E) due to a delay of 32 days. The assessee then filed a condonation petition before the CBDT, which is pending.
Held
The Tribunal set aside the impugned order of the CIT(E) and restored the application to his file, directing him to await the CBDT's decision on the condonation petition. The CIT(E) is to pass an order thereafter. The appeal was allowed for statistical purposes.
Key Issues
Whether the CIT(E) has the power to condone delay in filing Form 10AB, and whether the Tribunal should await the CBDT's decision on a condonation petition.
Sections Cited
80G, 119(2)(b)
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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI JAGADISH
आदेश / O R D E R PER ABY T. VARKEY, JM:
1. This is an appeal preferred by the assessee foundation against the application filed in Form No.10AB dated 02.08.2024 seeking approval u/s.80G(5)(iii) of the Income Tax Act, 1961 (hereinafter referred to as "the Act”)
At the outset, the Ld.AR of the assessee fairly pointed out that the Ld.CIT(E) has rejected the application seeking approval under clause (iii) of first proviso to sub-section (5) of section 80G of the Act, because, the M/s. Ooruni Foundation application was filed with a delay of ‘32’ days i.e. after expiry of the extended due date i.e. falling on 30.06.2024. Therefore, according to the Ld.CIT(E), approval u/s.80G of the Act can’t be granted, because he doesn’t have the power to condone the delay.
3. Pursuant to rejection of its application, the assessee is noted to have filed condonation petition before the Central Board of Direct Tax (CBDT) vide letter dated 30.05.2025, a copy of which has been placed before us, which shows that assessee through its Legal Counsel has filed application u/s.119(2)(b) of the Act for condoning the delay of ‘32’ days in filing of the application seeking approval u/s.80G of the Act. A copy of the application filed before the CBDT is reproduced as under:
Date: 30.05.2025
From:
M/s. Ooruni Foundation 18A, First Floor, Patel Cross Street, Nehru Nagar, Mylapore, Chennai-600004
To The Hon'ble Chairman, Central Board of Direct Taxes (CBDT), Ministry of Finance, Delhi.
Respected Sir/Madam,
Sub: Petition for condonation of delay under Section 119(2)(b) of the Income Tax Act, 1961 Delay in filing Form 10AB for registration under Section 12AA - Reg.
Ref: PAN-AAAT05611R
As advised by my client, M/s. Ooruni Foundation, a public charitable trust duly registered and engaged in bona fide charitable M/s. Ooruni Foundation activities, it is respectfully submitted that this petition is for seeking condonation of delay U/s. 119(2)(b) of the Income Tax Act, 1961, in filing Form 10AB for registration U/s. 80G of the Act.
The delay in filing the application as wholly unintentional and occurred due to bona fide and unavoidable circumstances, as elaborated below:
The Petitioner is a genuine charitable trust established with the core objective of carrying out social, educational, and philanthropic activities for public benefit.
2. As per the statutory requirement, the Trust was required to file Form 10AB within the prescribed time limit for continuation of exemption U/s. 80G of the Act. However, due to unforeseen circumstances, the filing was delayed by 32 days.
The application was subsequently rejected by the Learned Hon'ble Commissioner of Income Tax (Exemptions). It is also pertinent to state the Learned Hon'ble Commissioner of Income Tax (Exemptions) had also categorically stated that the rejection of the belated application is purely on the basis that the provisions of the Act does not empower him to condone the delay.
It is also pertinent to state that except for the belated application, there was no other reason whatsoever in rejecting the 80G registration.
The rejection order was passed with reference to CBDT Circular No. 6 of 2023, without adequate consideration of the peculiar facts and circumstances surrounding the delay.
The delay in filing the application was primarily attributable to the prolonged ill health of the Managing Trustee during the relevant period, which substantially impeded the Trust's ability to effectively coordinate and compile the requisite information. Additionally, the Trust is administered by a Board of Trustees comprising professionals from various fields, whose constrained availability due to pre-existing professional obligations further contributed to the delay in collating, reviewing, and finalizing the necessary documentation for submission of Form 10AB.
The petitioner also prays to state apart from this delay in filing the Application the trust since its inception is regular in timely filing the return of income and all other compliances. It is also pertinent to state that the trust has regularly utilized all its donations towards the charitable activities year on year.
The Hon'ble ITAT Chennai Bench, in the case of Earth Trust vs. CIT (ITA No. 423/Chny/2024), has held that minor procedural delays M/s. Ooruni Foundation :: 4 ::
should not be allowed to defeat substantive claims for registration, especially where the delay is due to genuine hardship.
Further, the Hon'ble Madras High Court in Sri Nrisimha Priya Charitable Trust (W.P. No. 27030 & Ors. of 2024, dated 02.04.2024) has reiterated that the principles of natural justice and substantive fairness must prevail over procedural technicalities in cases involving charitable institutions.
The petitioner prays to state that the trust is a non-profit, non- government organisation dedicated to promoting education, environment sustainability, women welfare, and Job opportunities to the underprivileged communities. The rejection of the 80G application would result in stoppage of donation which would be a setback for those in need of the trust's welfare initiatives which predominantly includes multiple students and people from underprivileged communities.
In view of the above facts and legal precedents, it is humbly prayed that your Lordship may kindly invoke the powers conferred U/s. 119(2)(b) of the Income Tax Act, 1961, and condone the delay of 32 days in filing Form 10AB for registration U/s. 80G, and accordingly, direct the appropriate authority to grant the registration u/s.80G to the Petitioner in the best interest of public interest and thus render justice.