Loading judgment…
Facts
The assessee, a society registered under the West Bengal Societies Registration Act, applied for registration under Section 80G(5). This application was rejected by the CIT(E) citing the absence of regular registration under Section 12A. The CIT(E) treated the application as non-maintainable. The assessee had a pending application for Section 12A registration which was previously set aside and remanded by the Tribunal.
Held
The Tribunal found that the CIT(E) had rejected the 80G application under an erroneous presumption, despite the 12A application being pending. The Tribunal set aside the order of the CIT(E) and remanded the matter back to the CIT(E) for fresh adjudication after granting an opportunity of being heard.
Key Issues
Whether the CIT(E) erred in rejecting the application for approval under Section 80G without considering the pending application for registration under Section 12A.
Sections Cited
80G, 12A, 80G(5)(iii), 12A(1)(ac)(iii)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA ‘C’ BENCH, KOLKATA
Before: SHRI PRADIP KUMAR CHOUBEY & SHRI RAKESH MISHRA
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Ld. Commissioner of Income Tax (Exemption), Kolkata [hereinafter referred to as the ‘Ld. CIT (Exemption)/the Ld. CIT(E)’] passed in respect of registration u/s 80G(5)(iii) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 27.08.2024. I.T.A. No.: 742/KOL/2025 Assessment Year: 2022-23 Mitra Institution Bhowanipur Branch
The Registry has informed that the appeal is delayed by 159 days. Along with the appeal memo, the assessee has filed an application seeking condonation of delay. The reasons mentioned are that against the order dated 27/08/2024 of the Ld. CIT(E), the assessee was required to file the appeal on or before 26/10/2024. However, when the appellant’s Authorised Representative contacted the office of the CIT(Exemption), he was advised to file a fresh application as per the provisions of the Act and the Rules, even though the order of the rejection was passed on an erroneous belief that the appellant had no order for regular registration under section 12A of the Act which has been dealt with in the grounds of appeal taken by the appellant. Therefore, the appeal could not be filed within the prescribed time on the said date. It is further stated that when the President of the Society contacted an advocate, he was advised to relook into the issue and was informed that the approach suggested by the office of the CIT(Exemption) was not the correct approach and the society was advised to file an appeal before the Tribunal with an application for condonation of delay. It is stated that the delay is neither intentional nor wilful but occurred due to good and sufficient reasons as mentioned and it is requested to condone the delay and admit the appeal. Considering the application for condonation of delay and the reasons stated therein, we are satisfied that the assessee had a reasonable and sufficient cause and was prevented from filing the instant appeal within the statutory time limit. We, therefore, condone the delay and admit the appeal for adjudication.
The assessee is in appeal before the Tribunal raising the following grounds of appeal: I.T.A. No.: 742/KOL/2025 Assessment Year: 2022-23 Mitra Institution Bhowanipur Branch “I. FOR THAT in passing the impugned order dated 27th August, 2024 the Learned Commissioner of Income Tax (Exemption), Kolkata (hereinafter referred to as the "CIT(E), Kolkata" has acted by an outright refusal to consider relevant matters, has mi irected itself in points of law, has taken into account irrelevant considerations and has failed to take into account relevant materials on record. The said impugned order rejecting the application filed by the appellant is arbitrary to that core and perverse. II. FOR THAT the action of the Learned CIT(E), Kolkata in rejecting the application which was filed by the appellant in Form 10AB on the basis of the purported finding that "the appellant has no Form 10AD, i.e., order for regular registration under Section 12A of the Income Tax Act, 1961" even though the application of the appellant for regular registration is pending before the Learned CIT(E), Kolkata and such action of the Learned CIT(E), Kolkata is illegal, invalid and bad and hence the same is liable to be quashed and/or set aside. III. FOR THAT the Hon'ble Income Tax Appellate Tribunal, Kolkata Bench, in the case of the appellant itself in ITA No. 737/KOL/2022 in respect of assessment year 2022-23 vide order dated 7th February, 2023 set aside the order of the Learned CIT(E) dated 17th October, 2022 rejecting the application for registration for re-adjudication on merit after submitting necessary material in support of the application and as such the application for registration being pending before the Learned CIT(E), Kolkata, the action of the Learned CIT(E), Kolkata in rejecting the application for approval under Section 80G of the Income Tax Act, 1961 which was made in Form 10AB is arbitrary, unjustified, unwarranted and illegal and hence is liable to be quashed and/or set aside. IV. FOR THAT the appellant is eligible for approval under Section 80G of the Income Tax Act, 1961 and the same should be allowed. V. FOR THAT the said impugned order of the Learned CIT(E), Kolkata is otherwise erroneous in law and/or on facts and is liable to be set aside. VI. FOR THAT the appellant craves indulgence to add, amend, alter and/or modify the Grounds of Appeal on or before the hearing of this appeal.”
Brief facts of the case are that the assessee is a Society registered under the West Bengal Societies Registration Act, 1960 and was incorporated on 17/06/1938. It is stated to be incorporated for the purpose of promoting growth and spread of education. The institution has two buildings which are used as primary and secondary schools. The Government of West Bengal took over the secondary school and the school premises. The primary school at Balram Basu Ghat Road I.T.A. No.: 742/KOL/2025 Assessment Year: 2022-23 Mitra Institution Bhowanipur Branch remains with the society and there are as many as 218 students enrolled in the school and the total number of teaching staff is 15 at the moment. The assessee applied for registration under section 80G(5) which was rejected by the Ld. CIT(E) vide order dated 27/08/2024, citing the reason that in the absence of regular registration under section 12A, the approval cannot be given under section 80G of the Act and as per the applicable rules, the registration under section 12A of the Act is compulsory for getting the approval under section 80G of the Act. Accordingly, the application filed by the assessee was treated as non-maintainable and the application filed under section 80G(5)(iii) was rejected. As is mentioned above, the assessee is an old Society. Aggrieved with the order of the Ld. CIT(E), the assessee has filed the appeal before the Tribunal.
Rival submissions were heard and the record and the submissions made have been examined. The Ld. AR brought to our notice that the application filed under section 12A(1)(ac)(iii) dated 19.04.2022 was rejected vide order dated 17/10/2022. The assessee filed an appeal before the Tribunal which set aside the order of the Ld. CIT(E) vide order in ITA No. 737/KOL/2022 dated 07/02/2023 and remanded the issue to the file of the Ld. CIT(E) for readjudication of the application of the assessee on merit after the assessee submits necessary material in support of the application. The assessee contends that it has filed the reply in response to the notice issued for giving effect to the order of the Tribunal, but without passing any order on the pending application under section 12A of the Act, the Ld. CIT(E) has rejected the application for approval under section 80G of the Act. It was submitted that the application filed under section 80G has been rejected under the erroneous assumption since the application under section 12A is I.T.A. No.: 742/KOL/2025 Assessment Year: 2022-23 Mitra Institution Bhowanipur Branch pending for readjudication before the same authority for deciding afresh.
We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT(E). The Bench was of the view after hearing the Ld. AR that the Ld. CIT(Exemption) had rejected the application u/s 80G(5)(iii) under the erroneous presumption, and even though the assessee had filed the reply in response to the notice of hearing in connection with the application under section 12A of the Act, the order of the same was awaited. Therefore, in the interest of justice, it was considered imperative that the order of the Ld. CIT(E) may be set aside and the matter may be remanded to him to decide the application for approval under section 80G in accordance with law and in view of the decision arrived at in respect of the set aside proceedings relating to the approval under section 12A of the Act. Hence, the order of the Ld. CIT (Exemption) is hereby set aside and the matter is remanded to him for deciding the application afresh after granting an opportunity of being heard to the assessee and considering the reply which may be filed and thereafter, he shall pass a speaking order in accordance with law. Hence, all the grounds of appeal are allowed for structural purposes.
In the result, the appeal filed by the assessee allowed for statistical purposes. Order pronounced in the open Court on 27th October 2025. [Pradip Kumar Choubey] [Rakesh Mishra] Judicial Member Accountant Member Dated: 27.10.2025 I.T.A. No.: 742/KOL/2025 Assessment Year: 2022-23 Mitra Institution Bhowanipur Branch Copy of the order forwarded to:
Mitra Institution Bhowanipur Branch, 16A, Balaram Bose Ghat Road, Bhowanipur, Kolkata, West Bengal, 700025. 2. CIT (Exemption), Kolkata.
CIT(A)-
CIT-
CIT(DR), Kolkata Benches, Kolkata.
Guard File. //// By order