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Facts
The assessee trust applied for approval under Section 80G of the Income Tax Act, 1961. The CIT(E) rejected the application and cancelled the provisional registration, citing issues with Rajasthan Public Trust Act registration, provisional registration validity, genuineness of activities, and commencement of activities.
Held
The Tribunal held that the assessee's registration under Section 12AA was valid and the grounds for rejecting the 80G approval by the CIT(E) were baseless. The Tribunal referred to a CBDT circular extending due dates for applications.
Key Issues
Whether the rejection of application for approval under Section 80G(5) by the CIT(E) was justified despite the assessee having a valid registration under Section 12AA and fulfilling procedural compliances, considering the extended due dates provided by CBDT circulars.
Sections Cited
80G(5), 12AA, 143(3), 11, 12, 10, 25, 119
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCH “A”, JAIPUR
Before: Dr. S. SEETHALAKSHMI & SHRI GAGAN GOYALShri Jain Shwetamber Terapanthi Vidyalaya Committee,
PER GAGAN GOYAL, A.M: This appeal by assessee is directed against the order of CIT (E), Jaipurdated 30.03.2024 passed u/s. 80G(5) of the Income Tax Act, 1961 (in short ‘the Act’). The assessee has raised the following grounds of appeal: -
1. 1. Under the facts and circumstances of the case and in law Learned CIT Exemption Jaipur has grossly erred in rejecting the application for approval u/s. 80G of the Income Tax Act 1961, and also erred in cancelling the provisional registration granted by CPC u/s. 80G (5) of the Act. Such action being unlawful as well as against the concept of natural justice hence the order passed by Ld. CIT Exemption, Jaipur deserve to be quashed.
2 Under the facts and circumstances of the case and in law Learned CIT Exemption Jaipur has grossly erred in passing the order by affixing order dated 30 March 2024 but digitally signed on 12 April 2024 time 09.00 PM. The said order deserves to be quashed.
3 Under the facts and circumstances of the case and in law the Id. CIT(E) even after granting the registration u/s. 12AA on 17/09/2018 and renewed on 17/09/2021 but denied to allow the approval u/s. 80G of the Income Tax Act hence the said denial being invalid in law deserves to be quashed.
4 Under the facts and circumstances of the case and according to law, the learned CIT (Exemption), Jaipur, erred in both facts and law by rejecting the application even the assessee had applied for registration under the RPT Act, assessee has valid provisional approval, assessee complied every notice and its activities are genuine.
5 The appellant hereby craves the leave to add, delete, amend or abandon any grounds of this appeal at the time of or before the hearing of the case.
The brief facts of the case are that the assessee trust applied in Form No. 10AB of the Act vide dated: 30.09.2023 for approval u/s. 80G of the Act. After considering the replies of the assessee in response to the notices issued by the office of the Ld. CIT (E), Jaipur, application of the assessee was dismissed on following grounds:
A). Not registered under the Rajasthan Public Trust Act, 1959 (RPT); B). Not having valid provisional registration; C). Genuineness of Activities and non-compliance and D). Commencement of Activities.
In addition to the above, provisional registration granted earlier u/s. 80G (5), clause (iv) of the first proviso of the Act vide dated: 10.03.2022 is also cancelled. The assessee being aggrieved with the same preferred the present appeal before us. We have gone through the order of the Ld. CIT (E), Jaipur alongwith the submissions of the assessee and paper book submitted before us.
3. It is observed that the present appeal pertains to the denial of approval u/s. 80G (5) of the Act and not denial of registration u/s. 12AB(1)(ii)(B) of the Act. On further verification it is observed that the assessee’s registration u/s. 12AB(1)(ii)(B) of the Act is no where in question and rather the assessee is validly enjoying the same, for verification the assessee submitted its registration certificate u/s. 12AB(1)(ii)(B) of the Act and an assessment order u/s. 143(3) of the Act for A.Y. 2017-18, wherein the claim of the assessee about exemption has been examined and allowed by the AO. Now the limited question before us is, whether an assessee who is carrying a valid registration certificate still can it be denied approval u/s. 80G(5) of the Act? For a thorough analysis of the matter under consideration, we deem it fit to reproduce and discuss the provisions of section 80G (5) of the Act as under:
80G (5) This section applies to donations to any institution or fund referred to in sub-clause (iv) of clause (a) of sub-section (2), only if it is established in India for a charitable purpose and if it fulfils the following conditions, namely: — (i) where the institution or fund derives any income, such income would not be liable to inclusion in its total income under the provisions of sections 11 and 12 or clause (23AA) or clause (23C) of section 10 : Provided that where an institution or fund derives any income, being profits and gains of business, the condition that such income would not be liable to inclusion in its total income under the provisions of section 11 shall not apply in relation to such income, if— (a) the institution or fund maintains separate books of account in respect of such business; (b) the donations made to the institution or fund are not used by it, directly or indirectly, for the purposes of such business; and (c) the institution or fund issues to a person making the donation a certificate to the effect that it maintains separate books of account in respect of such business and that the donations received by it will not be used, directly or indirectly, for the purposes of such business;
(ii) the instrument under which the institution or fund is constituted does not, or the rules governing the institution or fund do not, contain any provision for the transfer or application at any time of the whole or any part of the income or assets of the institution or fund for any purpose other than a charitable purpose;
(iii) the institution or fund is not expressed to be for the benefit of any particular religious community or caste;
(iv) the institution or fund maintains regular accounts of its receipts and expenditure;
(v) the institution or fund is either constituted as a public charitable trust or is registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India or under section 25of the Companies Act, 1956 (1 of 1956), or is a University established by law, or is any other educational institution recognised by the Government or by a University established by law, or affiliated to any University established by law, or is an institution financed wholly or in part by the Government or a local authority;
(vi) in relation to donations made after the 31st day of March, 1992, the institution or fund is for the time being approved by the Principal Commissioner or Commissioner;
(vii) where any institution or fund had been approved under clause (vi) for the previous year beginning on the 1st day of April, 2007 and ending on the 31st day of March, 2008, such institution or fund shall, for the purposes of this section and notwithstanding anything contained in the proviso to clause (15) of section 2, be deemed to have been,—
(a) established for charitable purposes for the previous year beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2009; and (b) approved under the said clause (vi) for the previous year beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2009;]
(viii) the institution or fund prepares such statement for such period as may be prescribed and deliver or cause to be delivered to the prescribed income-tax authority or the person authorised by such authority such statement in such form and verified in such manner and setting forth such particulars and within such time as may be prescribed:
Provided that the institution or fund may also deliver to the said prescribed authority, a correction statement for rectification of any mistake or to add, delete or update the information furnished in the statement delivered under this sub-section in such form and verified in such manner as may be prescribed; and (ix) the institution or fund furnishes to the donor, a certificate specifying the amount of donation in such manner, containing such particulars and within such time from the date of receipt of donation, as may be prescribed:
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 1st 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 at any time after the commencement of such activities:
Provided furtherthat the Principal Commissioner or Commissioner, on receipt of an application made under the first proviso, shall, —
(i) where the application is made under clause (i) of the said proviso, pass an order in writing granting it approval for a period of five years;
(ii) where the application is made under clause (ii) or clause (iii) or sub-clause (B) of clause (iv)] of the said proviso,—
(a) call for such documents or information from it or make such inquiries as he thinks necessary in order to satisfy himself about—
(A) the genuineness of activities of such institution or fund; and (B) the fulfilment of all the conditions laid down in clauses (i) to (v);
(b) after satisfying himself about the genuineness of activities under item (A), and the fulfilment of all the conditions under item (B), of sub-clause (a),—
(A) pass an order in writing granting it approval for a period of five years; or (B) if he is not so satisfied, pass an order in writing, rejecting such application and cancelling its approval, if any, after affording it a reasonable opportunity of being heard; ]
(iii) where the application is made under sub-clause (A) of clause (iv) of the said proviso or the application is made under clause (iv) of the said proviso as it stood immediately before its amendment vide the Finance Act, 2023, pass an order in writing granting it approval provisionally for a period of three years from the assessment year from which the approval is sought,] and send a copy of such order to the institution or fund: Provided also that the order under clause (i) and clause (iii) of the second proviso shall be passed in such form and manner as may be prescribed, before expiry of the period of three months and one month, as the case may be, calculated from the end of the month in which the application was received: Provided also that the order under sub-clause (b) of clause (ii) of the second proviso shall be passed in such form and manner as may be prescribed, before expiry of the period of six months from the end of the quarter in which the application was received: Provided also that the approval granted under the second proviso shall apply to an institution or fund, where the application is made under—
(a) clause (i) of the first proviso, from the assessment year from which approval was earlier granted to such institution or fund;
(b) clause (iii) of the first proviso, from the first of the assessment years for which such institution or fund was provisionally approved;
(c) in any other case, from the assessment year immediately following the financial year in which such application is made.] 4. We do not observe that any of the condition as prescribed in section 80G (5) of the Act has not been fulfilled by the assessee trust. Now in the light of the provisions of section 80G (5) of the Act, chronology and facts of the case can be summarised as under:
1). The assessee society registered on 11.07.1957 vide page 3 of paper book; 2). Registration u/s. 12AA of the Act vide order dated: 17.09.2018 w.e.f. A.Y. 2018-19; 3). Assessment order recognizing registration of the assessee u/s. 12AA for A.Y. 2017-18 vide order dated: 06-09-2019; 4). Registration certificate issued by the Devasthan Vibhag, Rajasthan vides dated: 01.10.2024 although the same is not required vide the order of coordinate bench in the case of APJ Abdul Kalam Education and Welfare Trust, and Trehan Seva Bharti Charitable Trust, & 1028/JPR/2024;
5. Order of the Ld. CIT (E), Jaipur is contradictory in nature, on page 14 last paragraph, he himself accepted that activities begun since F.Y. 2018-19 itself (Actually during F.Y. 2016-17, as the scrutiny assessment order is there with the paper book filed by the assessee), in that case it is also on record that the assessee was carrying provisional approval u/s. 80G (5) of the Act since 10.03.2022. For regularization of the same the assessee filed an application on 25.11.2022. This application was rejected by the office of the Ld. CIT (E); Jaipur vide order dated: 19.05.2023.
5. Now as far as status of application filed on 30.09.2023 is concerned, same can’t be treated as delayed as already discussed (supra), the assessee was already enjoying approval on provisional basis vide order dated: 10.03.2022 and the only issue in the assessee’s case was regularization of the same. This application of regularization was filed well in time but the same was rejected on a wrong notion by the Ld. CIT (E), Jaipurby applying wrong principles of law as the same can be observed through his order under challenge. Rather, the provisions as contained in section 12AB and 80G of the Act are overlapping in nature and section 12AB of the Act is the main driving and guiding provision. Once an assessee fulfilled the technical requirements of section 12AB, it has to be assumed that the technical compliances of section 80G (5) are also fulfilled, to that extent the order of the Ld. CIT (E), Jaipur is absurd. As the same is being passed with a preconceived notion, i.e. keeping in mind the provisions of section 12AB of the Act, whereas the present matter is not for registration u/s. 12AB of the Act.
Notwithstanding the discussion on law and facts (supra), we further rely on the Board’s circular reproduced as under:
CIRCULAR NO. 7/2024 [F.NO. 173/25/2024-ITA-I] SECTION 119 OF THE INCOME-TAX ACT, 1961 - CENTRAL BOARD OF DIRECT TAXES - INSTRUCTIONS TO SUBORDINATE AUTHORITIES - EXTENSION OF DUE DATE FOR FILING OF FORM NO. 10A / 10AB CIRCULAR NO. 7/2024 [F.NO. 173/25/2024-ITA-I], DATED 25-4-2024 On consideration of difficulties reported by the taxpayers and other stakeholders in the electronic filing of Form No. 10A/10AB, the Central Board of Direct Taxes (the Board) in exercise of its powers under section 119 of the Income-tax Act, 1961 (the Act) extended the due date for filing Form No. 10A to 31-8-2021 by Circular No. 12/2021, dated 25-6-2021, to 31-3-2022 by Circular No. 16/2021, dated 29-8-2021, to 25-11-2022 by Circular No. 22/2022, dated 1-11- 2022 and further to 30-9-2023 by Circular No. 6/2023, dated 24-5-2023, and extended the due date for filing Form No. 10AB to 30-9-2022 by Circular No. 8/2022, dated 31-3-2022 and further to 30-9-2023 by Circular No. 6/2023, dated 24-5-2023.
2. Representations have been received in the Board with a request to condone the delay in filing Form No. 10A/10AB, as the same could not be filed in such cases within the last extended date, i.e., 30-9-2023.
On consideration of the matter, with a view to avoid and mitigate genuine hardship in such cases, the Board, in exercise of the powers conferred under section 119 of the Act, hereby extends the due date of making an application/intimation electronically in - (i) Form No. 10A, in case of an application under clause (i) of the first proviso to clause (23C) of section 10 or under sub-clause (i) of clause (ac) of sub-section (1) of section 12A or under clause (i) of the first proviso to sub-section (5) of section 80G or in case of an intimation under fifth proviso of sub-section (1) of section 35 of the Act, till 30- 6-2024; (ii) Form No. 10AB, in case of an application under clause (iii) of the first proviso to clause (23C) of section 10 or under sub-clause (iii) of clause (ac) of sub-section (1) of section 12A or under clause (iii) of the first proviso to sub-section (5) of section 80G of the Act, till 30-6-2024.
It may be also noted that extension of due date as mentioned in paragraph 3(ii) shall also apply in case of all pending applications under clause (iii) of the first proviso to clause (23C) of section 10 or sub-clause (iii) of clause (ac) of sub-section (1) of section 12A or under clause (iii) of the first proviso to sub-section (5) of section 80G of the Act, as the case may be. Hence, in cases where any trust, institution or fund has already made an application in Form No. 10AB under the said provisions on or before the issuance of this Circular, and where the Principal Commissioner or Commissioner has not passed an order before the issuance of this Circular, the pending application in Form No. 10AB may be treated as a valid application. 4.1 Further, in cases where any trust, institution or fund has already made an application in Form No. 10AB, 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. 30-6-2024.
It is also clarified that if any existing trust institution or fund who had failed to file Form No. 10A for A.Y. 2022-23 within the due date as extended by the CBDT Circular No. 6/2023, dated 24-5-2023 and subsequently, applied for provisional registration as a new trust, institution or fund and has received Form No. 10AC, it can avail the option to surrender the said Form No. 10AC and apply for registration for AY 2022-23 as an existing trust, institution or fund in Form No. 10A within the extended time provided in paragraph 3(i) i.e. 30-6-2024.
I view of the above, the application filed by the assessee is not found to be delayed and as far as technical issues in this order raised by the Ld. CIT (E), Jaipur are concerned, same are found to be baseless and irrelevant. In the light of above, matter is restored back to the file of the Ld. CIT (E), Jaipur with a direction to revoke the earlier order and issue the approval order to the assessee trust. In view of above, ground nos. 1, 3 and 4 raised by the assessee are allowed in tandem. Rest of the grounds became infructuous in the light of discussion held (supra).
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 5th day of February 2025. Sd/- Sd/- (Dr. S. SEETHALAKSHMI) (GAGAN GOYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Jaipur, िदनांक/Dated: 05/02/2025 Copy of the Order forwarded to: 1. अपीलाथ�/The Appellant , 2. �ितवादी/ The Respondent. आयकर आयु� CIT 3. 4. िवभागीय �ितिनिध, आय.अपी.अिध., Sr.DR., ITAT, 5. गाड� फाइल/Guard file. BY ORDER, //True Copy// (Asstt.Registrar) ITAT, Jaipur
Details Date Initials Designation 1 Draft dictated on PC on 05.02.2025 Sr.PS/PS 2 Draft Placed before author 05.02.2025 Sr.PS/PS 3 Draft proposed & placed before the Second JM/AM Member 4 Draft discussed/approved by Second Member JM/AM 5. Approved Draft comes to the Sr.PS/PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS/PS 7. File sent to the Bench Clerk Sr.PS/PS 8 Date on which the file goes to the Head clerk 9 Date of Dispatch of order