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V-ONE SOCIETY,VADODARA vs THE CIT(EXEMPTION), AHMEDABAD | BharatTax

V-ONE SOCIETY,VADODARA vs. THE CIT(EXEMPTION), AHMEDABAD

ITA 287/AHD/2025Status: DisposedITAT Ahmedabad26 May 2025Bench: DR. BRR KUMAR (Vice President), SHRI SIDDHARTHA NAUTIYAL (Judicial Member)9 pages

AI SummaryAllowed

Facts

The assessee filed an application for renewal of provisional approval under Section 80G in Form 10AB, but inadvertently selected clause (ii) instead of clause (iii) of the first proviso to sub-section (5). The CIT(E) rejected the application as non-maintainable without considering the technical glitch and the assessee's submission.

Held

The Tribunal held that there was an inadvertent error in filing the form and that the assessee did not get an opportunity to be heard. Following a coordinate bench decision, the matter was restored to the CIT(E) for de novo consideration.

Key Issues

Whether the rejection of the application for renewal of provisional approval under Section 80G due to an inadvertent error in selecting the wrong clause is justified without granting an opportunity to be heard.

Sections Cited

80G, 14A

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Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD

Before: DR. BRR KUMAR & SHRI SIDDHARTHA NAUTIYAL

For Respondent: Shri Ashesh R Rewar, CIT DR

Pronounced: 26.05.2025

O R D E R

PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:

1.

This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Exemption), (in short “Ld. CIT(E)”), Ahmedabad vide order dated 18.10.2024.

2.

The Assessee has taken the following grounds of appeal:-

“1.00 REJECTING APPLICATION FOR RENEWAL OF PROVISIONAL APPROVAL GRANTED UNDER CLAUSE (iv) OF FIRST PROVISO TO SUB-SECTION (5) OF SECTION 80G OF THE ACT: 1.01 On the facts and circumstances of your appellant’s case and in law, the ld. CIT(E) erred in rejecting application filed for renewal of provisional approval granted under clause (iv) of first proviso to Sub-Section (5) of Section 80G of the Act on plea that your appellant has filed application selecting different clause and as such not maintainable. 1.02 Your appellant submits that due to technical glitches, the income tax portal was not allowing to select clause (ii), as against filed selecting clause (iii), while filing application which the ld. CIT(E) failed to consider.

V-One Society vs. CIT(E) Asst.Year –N.A. - 2– 1.03 Your appellant prays Your Honour to hold so now and direct the ld. CIT(E) to consider the application filed by your appellant as if it is filed selecting correct clause since your appellant is deprived off of the benefit of accepting donations in absence of approval. Your appellant craves leave to add, alter and / or amend the grounds herein above raised.”

3.

At the outset, we observe that the appeal is time barred by 37 days. The delay of 37 days is condoned on due consideration of facts and owing to smallness of delay causing no perceptible prejudice to other side.

“3. Ld. AR submitted that assessee while filing Form for final registration in Form 10AB has inadvertently mentioned the wrong section as sub- clause (B) of clause (iv) of first proviso to subsection (5) of section 80G instead of clause (iii) of first proviso to subsection (5) of section 80G. He further submitted that assessee could not explain the error before the CIT(E) because the notice calling for details mentioned that proceedings under section 14A and that when the staff of the assessee approached the office of the CIT(E), it was advised that no action is required. Ld. AR, accordingly submitted that no proper opportunity was given to the assessee before rejecting the application for registration under section 80G. Ld. AR also drew our attention to the relevant provisions of section 80G to submit that the reason as quoted by the CIT(E) for rejecting the application is not applicable to the assessee. Therefore, ld. AR prayed that directions may be given to ld. CIT(E) to grant approval for registration under section 80G to the assessee. Ld AR relied on the decision of the Kolkata Bench of the Tribunal in the case of North Eastern Social Research Centre vs CIT(E) [2024] 165 taxmann.com 12 (Kolkata Trib) in this regard and prayed for a similar direction as held hereunder – 6. The facts and issues involved in the case in hand being identical to that of the above referred to cases and in view of the findings given by the Coordinate Benches of the Tribunal, the appeal of the assessee is allowed accordingly and the ld. CIT(Exemption) is directed to grant final approval to the assessee under Clause (iii) to First Proviso to section 80G(5) of the Act, if the assessee is otherwise found eligible. It is directed that the Id. CIT(Exemption) will decide the application of the assessee for final approval as expeditiously as possible but not later than two months from the receipt of this order. It is further directed that, if the assessee is granted final approval by the ld. CIT(Exemption) then, the benefit of approval u/s 80G of the Act, if it was available to the assessee prior to the Amendment brought vide Amending Act of 2020, will be deemed to have been continued without any break. The assessee will not be deprived of the benefit during the time period falling between 31/03/2021 and the date of grant of provisional approval under clause (iv) i.e., 28/06/2022, due to technical errors occurred in making the application under the relevant provisions of the Act V-One Society vs. CIT(E) Asst.Year –N.A. - 4– because of the confusion and misunderstanding on part of the assessee as well as on part of the ld. CIT(Exemption) in properly interpreting the relevant provisions.

5.

We have heard the parties and perused the material on record. Before we proceed to examine the facts in assessee's case, it is important to first look at the relevant provisions of first proviso to subsection (5) of section 80G which read as under – Provided that the institution or fund referred to in clause (vi) shall make an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for grant of approval,- (i) where the institution or fund is approved under clause (vi) [as it stood immediately before its amendment by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020], within three months from the Ist day of April, 2021; (ii) where the institution or fund is approved and the period of such approval is due to expire, at least six months prior to expiry of the said period; (iii) where the institution or fund has been provisionally approved, at least six months prior to expiry of the period of the provisional approval or within six months of commencement of its activities, whichever is earlier: [or] [(iv) [***] where activities of the institution or fund have— (A) not commenced, at least one month prior to the commencement of the previous year relevant to the assessment year from which the said approval is sought; (B) commenced [*** Jat any time after the commencement of such activities:] 6. Assessee, in terms of the above provisions, first applied for a provisional approval under sub-clause (B) of clause (iv) of first proviso to subsection (5) of section 80G within and subsequently (refer clause 2 in Form 10A) and was given the provisional registration up to AY 2024-25 on 04.04.2022. In the application for final approval in Form 10AB, it is noticed that assessee has once again mentioned same section i.e. sub-clause (B) of clause (iv) of first proviso to subsection (5) of section SOG whereas the correct section code under which the assessee ought to have selected is clause (iii) of first proviso to subsection (5) of section 80G. We also noticed that ld. CIT(E) has treated the application as one filed under sub-clause (B) of clause (iv) of first proviso to subsection (5) of section 80G and accordingly rejected the application for not fulfilling the stipulated conditions prescribed for filing application for approval in Form 10AB. 6.1. From the perusal of forms filed and the facts of the case, in our considered view, there is merit in claim of the ld. AR that assessee has selected the wrong section code V-One Society vs. CIT(E) Asst.Year –N.A. - 5– inadvertently while filing the application for final registration in Form 10AB. Further, we notice that assessee did not have the opportunity of being heard before ld. CIT(E) due to incorrect course of action advised, which otherwise assessee might have explained the facts to avoid the impugned rejection. In view of these discussions and respectfully following the above decision of the Kolkata Bench in the case of North Eastern Social Research Centre (supra), we remit the issue back to the file of ld. CIT(E), with a direction to grant final approval to assessee under Clause (iii) to first proviso to section 80G(5) of the Act, if assessee is otherwise found eligible. We also direct ld. CIT(E) to decide the application of the assessee for final approval as quickly as possible before the expiry of the provisional approval granted in order to enable the assessee to have the benefit of section 80G without any break. It is ordered accordingly.