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Facts
The assessee trust, provisionally registered from 03.03.2023 to AY 2025-2026, applied for permanent registration under Section 12AB and Section 80G, which was rejected by the CIT(E) citing expiry of the time limit. The trust contended that the application was filed before the expiry of its provisional registration and had commenced activities prior to provisional registration, claiming this met the statutory requirements.
Held
The Tribunal found ambiguity in the law regarding registration procedures for trusts. It observed that the assessee's application for permanent registration was filed at least six months before the expiry of its provisional registration. The CIT(E) rejected the application without considering the merits or documentary evidence. Consequently, the tribunal set aside the CIT(E)'s orders and remanded the issue for fresh consideration on merits, granting the assessee a new opportunity to be heard.
Key Issues
Whether the CIT(E) was justified in rejecting the application for permanent registration under Section 12AB and Section 80G solely on the grounds of time limit, without considering the merits and given the existing ambiguity in the law.
Sections Cited
12AB, 80G, 12A(1)(ac)(ii), 80G(5)(iv)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, HYDERABAD “A” BENCH: HYDERABAD
Before: SHRI VIJAY PAL RAO & SHRI MANJUNATHA G
ORDER PER MANJUNATHA G. :
The above appeals are filed by the Assessee Trust against the separate orders dated 13.03.2025 and 17.03.2025 of the learned Commissioner of Income Tax (Exemptions), Hyderabad, in rejecting the application filed by the assessee in Form 10AB seeking for registration u/sec.12AB and 80G of the Income Tax Act, 1961 [in short “the Act”], respectively, relating to assessment year 2025-
2 ITA.Nos.809 & 810/Hyd./2025 2026. Since common issues are involved in both these appeals, these appeals were heard together and are being disposed of by this consolidated order for the sake of convenience and brevity.
Brief facts of the case are that, the assessee trust viz., “Sri Balbheemasena Gowseva Trust” was registered under the ‘Trust Deed’ on 25.08.2022 with an avowed object of establishment of Hindu temples, protection of cows, animal welfare, educational, social, cultural, economical and medical relief to the needy and advancement of any other charitable and developmental objects of general public utility and community welfare. The assessee trust has got provisional registration on 03.03.2023 up-to assessment year 2025-2026.
CA, Rajesh, Learned Counsel for the Assessee submitted that, the assessee trust made an application in Form 10AB to the learned CIT(E) seeking for registration u/sec.12AB and approval u/sec.80G of the Act. The learned CIT(E) issued notices dated 03.12.2024 and 12.02.2024 calling copy of memorandum of association/trust deed for 3 ITA.Nos.809 & 810/Hyd./2025 verification and also to furnish a detailed reply on the specific information called for in the said notice in respect of application filed seeking for registration u/sec.12AB of the Income Tax Act, 1961 and similar information was sought by issuing notices dated 03.12.2024 and 17.02.2025 for registration u/sec.80G of the Income Tax Act, 1961. In response to the said notices, the assessee trust has furnished relevant information as called-for. However, the learned CIT(A) noted that, the application made by the assessee was beyond the time limit and therefore, rejected the applications filed by the assessee seeking for registration u/sec.12AB and u/sec.80G of the Income Tax Act, 1961, without appreciating the documentary evidences filed by the assessee. He, therefore, submitted that, one more opportunity of hearing needs to be provided to the assessee by setting aside the order of the learned CIT(E) and remit the issue back to the learned CIT(E) with a direction to reconsider the issue afresh, by providing reasonable opportunity to hearing to the assessee.
4 ITA.Nos.809 & 810/Hyd./2025 4. MS U. Mini Chandran, learned CIT-DR supporting the order of the learned CIT(E), on the other hand, submitted that, since the assessee has made application in Form 10AB seeking for registration u/sec.12AB and 80G of the beyond the time limit prescribed, therefore, the learned CIT(E) has rightly rejected the application filed by the assessee. She, therefore, pleaded that the order of the learned CIT(E) should be upheld.
We have heard both the parties, perused the material on record and the orders of the authorities below. The appellant-trust was established on 25.08.2022 with an avowed object of establishment of Hindu temples, protection of cows, animal welfare, educational, social, cultural, economical and medical relief to the needy and advancement of any other charitable and developmental objects of general public utility and community welfare. The assessee trust has got provisional registration on 03.03.2023 up-to assessment year 2025-2026. The appellant-trust claims to have started it’s activities on 25.08.2022 even before granting provisional registration. As 5 ITA.Nos.809 & 810/Hyd./2025 per the provisions of sec.12A(1)(ac)(ii) and 80G(5)(iv) of the Income Tax Act, 1961, the appellant is supposed to file application in Form 10AB seeking for permanent registration u/sec.12AB and 80G of the Act, atleast six months before the expiry of the provisional registration or within six months from the date of commencement of the activities, whichever is earlier. In the present case, the assessee has filed application in Form 10AB on 12.09.2024 for regular registration u/sec.12AB and on 17.09.2024 for registration u/sec.80G of the Act, which is beyond the due date provided under the Act i.e., within six months from the date of commencement of the activities. However, the application filed by the assessee is atleast six months before the expiry of the provisional registration. The assessee claimed that, since it has already commenced it’s activities before provisional registration, it can only file application atleast six months before expiry of provisional registration.
We find that, the law has been amended in the case of trusts for procedure of registration and the same has been amended from time to time which is caused confusion
6 ITA.Nos.809 & 810/Hyd./2025 in the minds of the public about the classification of Trust/Institution. Although, the CBDT has issued Circulars from time to time and explained the procedure to be followed for obtaining registration, but, there is an ambiguity in law, which is difficult to understand by any layman. Therefore, in our considered view, when the assessee has filed it’s application for permanent registration atleast before six months from the expiry of provisional registration, the learned CIT(E) ought to have consider the application filed by the assessee on merits, when the assessee claims to have filed relevant evidences to prove carrying-out charitable activities in accordance with it’s objects. Therefore, considering the facts and circumstances of the case and also the fact that, the learned CIT(E) has rejected the application filed by the assessee in a routine manner without even considering basic facts and also on merits, in our considered view, the issue needs to be set- aside to the file of learned CIT(E) to give another opportunity of hearing to the appellant-trust. Thus, we set-aside the orders passed by the learned CIT(E) in rejecting the 7 ITA.Nos.809 & 810/Hyd./2025 application filed in Form 10AB seeking registration u/sec.12AB and u/sec.80G of the Income Tax Act, 1961 and restore the issues back to the file of learned CIT(E) for fresh consideration. The learned CIT(E) is directed to consider the applications filed by the appellant-trust for registration on merits, after considering relevant details submitted by the appellant-trust to justify it’s case.
In the result, both the appeals of the assessee are allowed for statistical purposes. A copy of this common order be placed in the respective case files.
Order pronounced in the open Court on 28.07.2025.