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Facts
The assessee, Sri Mallikarjuna Anna Sathra Sangham, applied for regular registration under Section 12AB and approval under Section 80G(5) of the Income Tax Act. The CIT (Exemption) rejected both applications citing a delay in filing Form 10AB, as the applications were submitted on 30/08/2024, which the CIT deemed beyond the prescribed time limit. The assessee contended that the applications were filed within the stipulated period, relying on different interpretations of the commencement date or expiry of provisional registration.
Held
The Tribunal observed that the CIT (Exemption) failed to verify the actual date of commencement of the assessee's activities, which is crucial for determining the correct limitation period for filing applications. It also noted that a CBDT Circular cited by the CIT was not relevant. Consequently, the Tribunal set aside the CIT's orders and remanded the matters for reconsideration and proper verification of the commencement date to ascertain the correct limitation period for the applications.
Key Issues
Whether the applications for regular registration under Section 12AB and approval under Section 80G(5) were filed within the statutory time limit, specifically concerning the determination of the activity commencement date for limitation purposes.
Sections Cited
12AB, 80G(5)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘ DB-B ‘ Bench, Hyderabad
Before: Shri Vijay Pal Rao, Vice-Shri Madhusudan Sawdia
Per Vijay Pal Rao, Vice President These two appeals by the assessee are directed against 2 separate orders of the learned CIT (Exemption) dated 18th & 19th February, 2025 respectively, whereby the application of the assessee for regular registration u/s 12AB as well as approval u/s 80G(5) of the Act were rejected.
The assessee has raised the following grounds of appeal in ITA No.606/Hyd/2025:
Page 1 of 6 “1. The order passed by the CIT (Exemption) vide Form 10AD dt 18/02/2025 regarding rejection of permanent registration u/s 12AB is bad in law and contrary to the facts and circumstances of the case.
2. The learned CIT (Exemption) erred in rejecting the claim for registration u/s 12AB of the I.T. Act on the ground of delay in filing the application for permanent registration when in reality there is no such delay in filing such form.
3. The learned CIT (Exemption) erred in rejecting the claim on the grounds of an alleged delay in filing Form No.10AB when, in fact, no such delay occurred. The assessee society opted for permanent registration on 30/08/2024, which falls well within the prescribed six month period from the scheduled due date.
In any case, the learned CIT (Exemption) ought not to have rejected the claim for registration u/s 12AB particularly when the Trust’s activities clearly align with the charitable objectives outlined in the Act. Furthermore, Form No.10AB was duly filed within the prescribed timeframe.
5. For these and other reasons that may be urged at the time of hearing, the appellant prays that the impugned order dt. 18/02/2025 be set aside in the interest of justice and direct the CIT (Exemption) to grant permanent registration u/s 12AB of the I.T. Act.”
The learned Counsel for the assessee has submitted that the CIT (Exemption) has rejected the application of the assessee on the ground that application in Form 10AB were filed beyond the time limit prescribed under the Act. He has pointed out that the CIT (Exemption) has given the reasons that the application in Form 10AB were not filed within six months from the date of commencement of the activity and also beyond the reference of CBDT Circular No.7/2024 dated 25/04/2024 which Page 2 of 6 is not relevant for the application filed by the assessee because the provisional registration was granted up to 31/03/2025. The learned Counsel for the assessee has submitted that in response to the notice issued by the CIT (Exemption), the assessee filed the reply and also given the details of date of commencement as on 05/03/2024 as well as the date of expiry of the provisional registration on 31/03/2025 and accordingly, the limitation for filing the application in Form 10AB was expiring on 05/09/2024 if reckons from the date of commencement of the activity and on 30/09/2024 if it is considered to be reckoned from the date of expiry of the provisional registration. The learned Counsel for the assessee has submitted that the assessee filed the application on 30/08/2024 which is well within the period of limitation. Thus, he has submitted that the learned CIT (Exemption) has wrongly rejected the applications of the assessee and consequently, the impugned orders are not sustainable in law.
4. On the other hand, the learned DR has relied upon the impugned orders of the learned CIT (Exemption) and submitted that since the date of commencement of the activity of the assessee is required to be verified on examination of the relevant record, therefore, to decide the issue of limitation, the matter is to be remanded to the record of the learned CIT (Exemption) for proper verification of the relevant facts in support of the commencement of the activity and then deciding the applications of the assessee in accordance with law.
We have considered the rival contentions as well as the relevant material available on record. The CIT (Exemption) has rejected both the applications of the assessee for registration u/s 12AB as well as approval u/s 80G(5) of the Act by giving the reasons in para 3 & 4 as under: ITA No 606/Hyd/2025
There is no dispute that the assessee was earlier granted provisional registration on 16/12/2022 which was valid for the A.Y 2025-26 i.e. up to 31/03/2025. If the limitation is taken from the date of expiry of the provisional registration, then the assessee was required to file the application on or before 30th
Page 4 of 6 September, 2024 whereas the assessee has undisputedly filed the applications on 30/08/2024. Therefore, the applications filed by the assessee qua the limitation reckoned from the expiry of provisional registration is within the limitation. However, as per the provisions of law, the limitation will be taken either 6 months before the expiry of the provisional registration or within 6 months from the date of commencement of the activity whichever is earlier. The assessee has claimed that the activities were commenced on 05/03/2024 and therefore, by considering the reckoning of the limitation from the commencement of the activities, the limitation would expire on 05/09/2024 whereas the assessee filed the application on 30/08/2024. This contention of the assessee is required to be verified with the supporting evidence. We further note that the CIT (Exemption) has made the reference to the CBDT Circular No.7 of 2024 dated 25/04/2024 which is not at all relevant for the application filed by the assessee in the case in hand when the provisional registration was valid up to 31/03/2025. Accordingly, in the facts and circumstances of the case, when the learned CIT (Exemption) has not given any finding about the date of commencement of the activity of the assessee and then counting the limitation from the said date of the commencement, the matter is required to be re-considered for ascertaining the date of commencement and then deciding the period of limitation. Hence, in the facts and circumstances of the case, the impugned orders of the learned CIT (Exemption) are set aside and the matters are remanded to the record of the CIT (Exemption) for reconsideration of the applications of the assessee
Page 5 of 6 for registration u/s 12AB and approval u/s 80G(5) of the I.T. Act in terms of our above observations.
In the result, both the appeals filed by the assessee are allowed for statistical purposes.