GANDHINAGAR MALAYALEE SAMAJAM ,AHMEDABAD vs. THE CIT(EXEMPTION), AHMEDABAD

At the outset, it is noted that there is a delay of 90 days in filing the present appeal. The assessee has filed an affidavit sworn by Shri M. N. Sasi Menon, Trustee, affirming that he is 71 years of age, not conversant with income-tax matters, nor operating computers or accessing the income-tax portal. The affidavit explains that the assessee came to know about rejection of its application only in January 2025 through trustees of other similar trusts. Immediately thereafter, the assessee approached its Chartered Accountant and later entrusted the matter to an advocate at Ahmedabad to file the present appeal. The delay thus occurred due to bona fide and unavoidable circumstances.

The learned Departmental Representative (DR) raised no objection to the condonation of delay. Considering the affidavit, the circumstances explained, and the settled law that substantial justice should prevail over technicalities, we are satisfied that there was sufficient cause for not filing the appeal within the prescribed time. Accordingly, the delay of 90 days is condoned, and the appeal is admitted for adjudication on merits.

The assessee filed application in Form No. 10AB seeking approval under sub-clause (B) of clause (iv) of the first proviso to section 80G(5) of the Act. The learned CIT(E) noted that as per section 80G(5)(iv)(B), approval is available only if the activities of the trust have not commenced at least one month before Gandhinagar M Samajam Vs. CIT(E) Assessment Year NA 3 commencement of the previous year, or the activities have commenced but no exemption has been claimed u/ss. 10/11/12 or 23C in any earlier year. On verification of CPC portal, the CIT(E) observed that the assessee had already claimed exemption under section 11 in the past assessment years. Since exemption had already been claimed under section 11, the CIT(E) held that the conditions of section 80G(5)(iv)(B) were violated and accordingly, the application was rejected as non-maintainable.

Aggrieved by the order of CIT(E), the assessee is in appeal before us raising following grounds of appeal:

1. That on facts, and in law, the learned CIT (Exemption) has grievously erred in rejecting the application for approval u/s. 80G

The learned AR submitted that the assessee, while filing Form 10AB, had inadvertently mentioned the wrong section i.e. sub-clause

We have considered the rival submissions, the material on record, and the order of the learned CIT(E). It is an admitted fact that the assessee filed Form No. 10AB under an inapplicable clause i.e. section 80G(5)(iv)(B), which led to rejection of its application. The assessee has candidly admitted this inadvertent mistake, supported by affidavit, and prayed for consideration under the correct clause of section 80G(5). It is settled law that procedural lapses or technical mistakes should not defeat the cause of substantive justice. In the present case, the assessee is already carrying out charitable activities and has been assessed under section 11. Therefore, the rejection solely on the ground that exemption was claimed earlier is not sustainable when the application itself was filed under an incorrect clause due to bona fide mistake.

In view of the above, and considering that the learned DR has raised no serious objection, we are of the considered opinion that the matter deserves to be set aside and restored to the file of the CIT(E) Gandhinagar M Samajam Vs. CIT(E) Assessment Year NA 5 with a direction to treat the application as made under the correct clause of section 80G(5) and to adjudicate afresh on merits after affording due opportunity to the assessee.

In the result, the appeal of the assessee is allowed for statistical purposes.