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Facts
The assessee, an existing trust with provisional approval under Section 80G(5)(iv), applied for final approval under Section 80G(5)(iii). The CIT(E) rejected the application, citing that the assessee's activities had commenced earlier and the application in Form 10AB was filed beyond the stipulated time limit, thus deeming it non-maintainable.
Held
The Tribunal held that the CIT(E) erred in rejecting the application as time-barred and on an incorrect appreciation of facts. Citing a similar case, it clarified that as an existing trust, the assessee should have applied under Section 80G(5)(i), making the incorrect clause selection a curable defect. The CIT(E)'s order was set aside, and the matter remanded for fresh consideration under Section 80G(5)(i).
Key Issues
The key issue was whether the CIT(E) could reject an existing trust's application for Section 80G(5)(iii) approval as time-barred when it should have applied under Section 80G(5)(i), and if this error was a curable defect.
Sections Cited
80G(5)(i), 80G(5)(iii), 80G(5)(iv), 12AA
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Income Tax Appellate Tribunal, KOLKATA ‘D’ BENCH, KOLKATA
Before: SHRI UDAYAN DAS GUPTA & 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)/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 24.06.2025. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal:
“1. That the Ld. CIT(E), Kolkata, erred in law by rejecting the application made u/s 80G(5) (iii) of the Income Tax 1 Act, 1961, as non-maintainable, on the ground that the application filed by the appellant trust in Form 10AB was beyond the stipulated time limit. I.T.A. No.: 1884/KOL/2025 Assessment Year: N.A. Pushpa Devi Sobhasaria Foundation.
That the Ld. CIT(E), Kolkata, erred in law by rejecting the application made u/s 80G(5) (iii) of the Income Tax Act, 1961, stating that he has no power to condone the delay in filing of application in Form No. 10AB.
That the Ld. CIT(E), Kolkata, erred in law by rejecting the application made u/s 80G(5) (iii) of the Income Tax Act, 1961, as non-maintainable without going into the merits of the case.
That the appellant craves leave to add/or amend any ground of this appeal.”
Brief facts of the case are that the assessee claims to carry on charitable activities and was granted provisional approval u/s 80G(5)(iv) of the Act in Form No. 10AC by the CPC, Bengaluru vide order dated 31.08.2021 for a period from 31.08.2021 to AY 2024-25. Subsequently, an application for approval of the trust u/s 80G(5)(iii) of the Act was filed electronically. A notice was issued to the applicant/assessee on 02.04.2025 to furnish detailed note on the activities carried out by the assessee, as well as certain details/documents as mentioned therein, which was considered necessary by the Ld. CIT(E) in view of the mandatory provisions of the procedure for approval u/s 80G(5)(iii) of the Act. The submissions filed by the assessee were examined and it was found that the assessee had already commenced its activities in the financial year 2021-22 and the extended due date for filing the application in Form No. 10AB was 30.06.2024 as per the CBDT’s Circular No. 07/2024 dated 25.04.2024. It was also noted by the Ld. CIT (Exemption) that the assessee had incurred expenses on account of charity and donation at ₹71,500/- which established the fact that the activities of the Trust had already commenced in the FY 2021-22. Since the activities had already commenced, the application in Form No. 10AB was not filed within the time limit prescribed therein and, therefore, the same was liable to be rejected as not maintainable without going into the merits of the case and was therefore, rejected. Aggrieved with the I.T.A. No.: 1884/KOL/2025 Assessment Year: N.A. Pushpa Devi Sobhasaria Foundation. order of the Ld. CIT (Exemption), the assessee has filed the appeal before the Tribunal.
Rival contentions were heard and the submissions made have been examined. It is observed that the whole controversy arose because of incorrect mention of the relevant clause while filing the application. Since the assessee was an old entity, it ought to have filed the application under clause (i) of the proviso to section 80G(5) of the Act. Similar issue arose in the case of Nitdaa Foundation v. Commissioner of Income tax (Exemption) [2024] 167 taxmann.com 111 (Kolkata - Trib.) wherein it has been held as under: “The assessee was an existing trust and had been granted approval under section 12AA as well as under section 80G earlier, but instead of applying under clause (i) of the first proviso to section 80G(5), it applied under clause (iii) as a new trust. If it had applied under clause (i), there was no need of issuing any provisional certificate and as per the second proviso to section 80G(5) the Principal Commissioner or Commissioner would have passed an order in writing granting it approval for a period of five years and there was no requirement for seeking any provisional approval which is required only for a new trust. [Para 11] Thus, the whole controversy arose due to incorrect mention of the clause under which the application was required to be filed, which was mentioned as clause (iii) of the first proviso to sub-section (5) of section 80G in column 6 of Form No. 10AB, whereas the same should have been mentioned as clause (i) of the first proviso to sub-section (5) of section 80G. Since Form No. 10AB was filed in time, the error on the part of the assessee for mentioning the wrong clause is deemed to be a curable defect and the application in Form No. 10AB is deemed to be filed under clause (i) of the first proviso to sub-section (5) of section 80G. The order of the Commissioner (Exemption) is hereby set aside. He is required to consider the application as filed under clause (i) of the first proviso to section 80G(5) and consider the same for grant of approval to the trust in accordance with law. [Para 12]
During the course of the appeal although the assessee sought adjournment, however, the Bench was of the view that the Ld. CIT(E) had denied the claim of exemption u/s 80G(5)(iii) of the Act on account I.T.A. No.: 1884/KOL/2025 Assessment Year: N.A. Pushpa Devi Sobhasaria Foundation. of delay in filing the application within prescribed time limit by the assessee and on incorrect appreciation of the facts of the case. Hence, the order of the Ld. CIT (Exemption) is set aside and the matter is remanded to him for deciding the application afresh in view of the findings in the case of Nitdaa Foundation(supra). He is required to consider the application as filed under clause (i) of the first proviso to section 80G(5) and consider the same for grant of approval to the trust in accordance with law.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 23rd October, 2025. [Udayan Das Gupta] [Rakesh Mishra] Judicial Member Accountant Member Dated: 23.10.2025 Bidhan (Sr. P.S.) I.T.A. No.: 1884/KOL/2025 Assessment Year: N.A. Pushpa Devi Sobhasaria Foundation. Copy of the order forwarded to:
Pushpa Devi Sobhasaria Foundation, 1, Ho-Chi-Minh Sarani, 8th Floor, Kolkata, West Bengal, 700071. 2. CIT(Exemption), Kolkata.
CIT(A)-
CIT-
CIT(DR), Kolkata Benches, Kolkata.
Guard File. //// By order