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Facts
The assessee filed applications for registration under section 12A(1)(ac)(iii) and approval under section 80G(5) of the IT Act. These applications were rejected by the CIT on the ground of delay and cancellation of provisional registration.
Held
The Tribunal held that the assessee's fresh application was filed within the extended time provided by CBDT Circular No. 7/2024, which was issued after the initial rejection. Therefore, the CIT should have considered the application on its merits.
Key Issues
Whether the CIT erred in rejecting the application for registration and approval due to delay, ignoring the subsequent CBDT circular allowing fresh applications?
Sections Cited
12A(1)(ac), 12AB, 80G(5), 12A(1)(ac)(iii), 17A(2)(e)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI MANISH BORAD & SHRI VINAY BHAMORE
ORDER PER VINAY BHAMORE, JM: Both the above captioned appeals filed by the assessee are directed against the separate orders dated 18.12.2024 passed by Ld. CIT, Exemption, Pune rejecting the application for registration in Form No.10AB under clause (iii) of section 12A(1)(ac) of the IT Act filed on 08.06.2024 and denying the application for approval in Form No.10AB under clause (iii) of first proviso to sub-section (5) of section 80G of the IT Act filed on 09.06.2024.
& 1719/PUN/2025 2. There is delay in filing of both the appeals. We are satisfied with the reasons mentioned in the affidavit for condonation that the applicant was prevented by sufficient cause for not filing the appeals within the prescribed time limit. After hearing Ld. DR, we condone the delay and proceed to adjudicate the appeals. : 3. Facts of the case, in brief, are, that the assessee has filed application for registration in Form No.10AB under clause (iii) of section 12(1)(ac) of the IT Act on 08.06.2024. The instant application was rejected by Ld. CIT, Exemption, Pune by observing as under :- “8. The provisions of clause (iii) section 12A(1)(ac) of the Act are applicable to a trust / institution which is provisionally registered under section 12AB read with clause (vi) of section 12A(1)(ac) of the Act. As per the provisions of Rule 17A(2)(e) of the Income Tax Rules, 1962, the copy of existing order of registration was required to be submitted along with the application itself. Thus, the assessee was required to submit the copy of order of provisional registration under section 12AB read with clause (vi) of section 12A(1)(ac) of the Income Tax Act, 1961. In the instant case, the copy of provisional registration u/s 12AB dated 27-05- 2021 furnished by the assessee has already been cancelled vide this office order dated 19/04/2024. Hence, at present the assessee is not having valid provisional registration under section 12AB of the Act. Hence, the prerequisite for application under the provisions of clause (iii) of section 12A(1)(ac) of the Income Tax Act, 1961 is not fulfilled.
9. In view of the above, the application filed by the assessee is hereby rejected. Needless to mention here that its provisional registrations obtained in form 10AC on 27/05/2021 under section 12AB & 1719/PUN/2025 read with clause (vi) of section 12A(1)(ac) of the Act. has already been cancelled vide order dt. 19/04/2024.”
It is the above order against which the assessee is in appeal before this Tribunal.
Ld. AR appearing from side of the assessee submitted before us that rejection order passed by Ld. CIT, Exemption, Pune is unjustified. Ld. AR submitted before us that originally the assessee filed application dated 23.10.2023 for registration in Form No.10AB under clause (iii) of section 12(1)(ac) of the Act and while rejecting it on the ground of delay vide order dated 15.04.2024 Ld. CIT, Exemption, Pune also rejected the provisional registration granted on 27.05.2021 u/s 12AB r.w.s. 12A(1)(ac)(vi) of the Act. Ld. AR further submitted that immediately after rejection of original application CBDT came with Circular No.7/2024 dated 25.04.2024 wherein in para 4.1 it has specifically permitted the assessee to file fresh application whose application was earlier rejected either due to delay or due to selection of wrong section code, prior to issue of the above circular. Accordingly, Ld. AR contended that Ld. CIT, Exemption, Pune has not applied the circular in its correct perspective. Ld. AR further submitted that in & 1719/PUN/2025 sum & substance the circular was issued for the benefit of assessee & Ld. CIT, Exemption, Pune erred in not providing the benefit to the assessee. Ld. AR submitted that the original application was rejected on 15-04-2024 & on 25-04-2024 the CBDT came with the above circular & the assessee has rightly filed fresh application for registration since his original application was rejected on the ground of delay. In support of this contention, Ld. AR produced copy of order dated 15.04.2024 wherein in para 5 Ld. CIT, Exemption, Pune has mentioned that the assessee has not filed the present application within the time limit allowed u/s 12A(1)(ac)(iii) of the Act. Accordingly, it was requested before the Bench to set-aside the order passed by Ld. CIT, Exemption, Pune with a request to direct him to decide the application afresh.
Ld. DR appearing from side of the Revenue submitted that the original application dated 23.10.2023 was rejected on the ground of non-compliance and therefore the benefit of circular cannot be allowed. Accordingly, he placed heavy reliance on the order passed by Ld. CIT, Exemption, Pune and requested to confirm the same.
We have heard Ld. Counsels from both the sides and perused the material available on record. In this regard, we find that the & 1719/PUN/2025 original application dated 23.10.2023 was rejected by Ld. CIT, Exemption, Pune on the ground of delay vide order dated 15.04.2024 by observing as under :- “5. Without prejudice to the above, it is seen that the expiry date of provisional registration under section 12AB of the Act in the assessee's case is 31/03/2023. As per the provisions of section 12A(1)(ac) (iii) of the Act, where a trust or institution has been provisionally registered under section 12AB of the Act, the application for regular registration under section 12AB is required to be filed, at least six months prior to expiry of period of the provisional registration or within six months from the date of commencement of activities, whichever is earlier. Since, the period of provisional registration was due to expire on 31/03/2023, the present application was required to be filed before 30/09/2022. The extended due date for filing of such application was 30/09/2023 as per CBDT, Circular No.6/2023, dated 24/05/2023, whereas, the present application filed by the assessee is on 23/10/2023 i.e. after the expiry of period allowed under section 12A(1)(ac)(iii) of the Act. Thus, it is seen that the assessee has not filed the present application within the time limit allowed under section 12A(1)(ac) (iii) of the Income Tax Act, 1961.
6. In view of the above, the application filed by the assessee is hereby rejected and the provisional registration granted on 27/05/2021 under section 12AB read with section 12A(1)(ac) (vi) of the Income Tax Act, 1961 is hereby cancelled.”
From the perusal of above order dated 15.04.2024, we find that the original application was rejected on the ground of delay, since it was filed after the expiry of period allowed u/s 12A(1)(ac)(iii) of the Act. We also find that on 25.04.2024 CBDT through Circular No.7/2024 gave liberty to the assessee to file fresh application upto 30.06.2024, who’s application was rejected due to delay and following the above circular the assessee has furnished & 1719/PUN/2025 fresh application for registration u/s 12A(1)(ac)(iii) of the Act on 08.06.2024. The relevant para of the above Circular is reproduced herein-below :- “4.1 Further, in cases where any trust, institution or fund has already made an application in Form No. 1OAB, and where the Principal Commissioner or Commissioner has passed an order rejecting such application, on or before the issuance of this Circular, solely on account of the fact that the application was furnished after the due date or that the application has been furnished under the wrong section code, it may furnish a fresh application in Form No. 10AB within the extended time provided in paragraph 3(ii) i.e. 30.06.2024.”
Accordingly, we find that the original application was rejected due to delay in filing vide order dated 15.04.2024 by Ld. CIT, Exemption, Pune and in the light of para 4.1 of above Circular No.7/2024 dated 25.04.2024 the assessee was entitled to file fresh application before 30.06.2024. In the instant case, the assessee has filed the fresh application on 08.06.2024 i.e. well before the extended date of 30.06.2024 permitted by above circular. Accordingly, we find that the case of the assessee is squarely covered by above circular (supra) and Ld. CIT, Exemption, Pune ought to have considered his fresh application for registration on merits of the case. 10 Considering the totality of the facts of the case and in the light of above circular (supra), we set-aside the order passed by Ld. CIT, & 1719/PUN/2025 Exemption, Pune and remand the matter back to his file with a direction to decide the application for registration afresh as per fact and law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to comply with the notices issued by Ld. CIT, Exemption, Pune and produce requisite documents/information in support of the application for registration, otherwise, Ld. CIT, Exemption, Pune shall be at liberty to pass appropriate order as per law. Thus, the grounds of appeal
raised by the assessee are allowed for statistical purposes.
11. In the result, the appeal filed by the assessee in is allowed for statistical purposes.
12. The instant appeal is against the order passed by Ld. CIT, Exemption, Pune denying grant of approval u/s 80G(5) of the IT Act. Since we have remanded the issue of grant of registration u/s 12A(1)(ac)(iii) to the file of Ld. CIT, Exemption, Pune for de novo adjudication, therefore, in the interest of justice, it would be appropriate to remit the issue of grant of approval u/s 80G(5) as well to the file of Ld. CIT, Exemption, Pune being consequential, for de novo adjudication.