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Facts
The assessee, a charitable trust, applied for regular approval under section 80G(5) of the Income Tax Act. The CIT(E) rejected the application due to delay, without examining the merits. The assessee claimed the application was filed within time on the portal but was not reflected due to technical issues.
Held
The Tribunal found that the rejection was based solely on limitation without examining the assessee's explanation of technical failure. The tribunal opined that rejecting the application based on procedural lapse without considering merits and the explanation provided is not justified.
Key Issues
Whether the CIT(E) erred in rejecting the application for 80G approval solely on the ground of delay without examining the merits and the assessee's explanation of portal technical failure.
Sections Cited
80G(5), 12A
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Income Tax Appellate Tribunal, “B” BENCH MUMBAI
Before: SHRI ANIKESH BANERJEE & SHRI MAKARAND VASANT MAHADEOKAR
आदेश / ORDER
PER MAKARAND VASANT MAHADEOKAR, AM:
This appeal is filed by the assessee against the order passed by the Commissioner of Income-tax (Exemption), Pune [hereinafter referred to as “CIT(E)”] in Form No. 10AD dated 24.09.2025, rejecting the assessee’s application for approval
2. The assessee has raised the following grounds of appeal:
On the facts and in law, 1. The Hon. CIT (Exemption) erred in rejecting the application seeking approval u/s 80G(5) of the IT Act, 1961, for the reason that the application for such approval was delayed, not appreciating that Form no. 10AB seeking approval u/s 80G(5) was filed by appellant on 28.09.2024 and the action of the Hon. CIT (Exemption) in denying the approval u/s 80G(5) was not justified.
The order passed by the Hon. CIT (Exemption) in Form no. 10AD dated 24.09.2025, rejecting the application filed by the appellant for approval u/s 80G, being not justified be set aside and the appellant be declared eligible for approval u/s 80G.
The appellant craves leave to add, alter, amend and/or vary any of the above grounds of appeal
at any time before the decision of the appeal.
3. The assessee is a charitable trust registered on 16.11.2015. The assessee filed an application in Form No. 10AB seeking regular approval under clause (iv) of the first proviso to section 80G(5) on 28.03.2025. The assessee was earlier granted provisional approval under section 80G(5) with effect from F.Y. 2021–22.
The CIT(E) observed that in terms of clause (iii) of the first proviso to section 80G(5), an institution having provisional approval is required to file application for regular approval at least six months prior to expiry of provisional approval or within six months from commencement of activities, whichever is earlier.
Blossom Charitable Trust The CIT(E) also observed that the assessee commenced activities from F.Y. 2021–22 and that the assessee was required to file Form No.10AB on or before 25.11.2022. The CBDT Circular No.7/2024 extended the due date up to 30.06.2024. However, the assessee filed the present application on 28.03.2025.
The CIT(E) issued notice dated 07.05.2025 and further notice dated 23.07.2025 calling for details and explanation as to why the application should not be rejected on account of delay. The assessee filed reply on 01.08.2025.
The CIT(E) held that the time limit prescribed under clause (iii) of first proviso to section 80G(5) is mandatory, there is no power to condone delay, and the application is barred by limitation. Accordingly, vide order dated 24.09.2025 passed in Form No.10AD, the CIT(E) rejected the application without examining the merits.
During the course of hearing before us, the learned Authorised Representative (AR) submitted that the assessee is engaged in charitable activities in rural areas of Palghar district in the field of education, water conservation, horticultural support and medical health support. It was submitted that the assessee is registered under section 12A for A.Y. 2025–26 and provisional approval under section 80G(5) up to 31.03.2025.
The learned AR submitted that the assessee had generated Form No.10AB on the IT portal on 28.09.2024, which was within the prescribed time limit. However, due to technical failure, the Blossom Charitable Trust same was not reflected on the portal. It was submitted that grievance was raised on the portal on 24.03.2025 and email was sent to the e-filing web manager pointing out non-reflection of Form 10AB.Thereafter, on the advice of the office of the CIT(E), the assessee again uploaded Form No.10AB on 28.03.2025. The assessee also informed the CIT(E) about the originally generated Form No.10AB dated 28.09.2024.
The learned AR submitted that rejection has been made only on the ground of delay and without examining the merits. It was prayed that the delay may be condoned and the CIT(E) be directed to consider the application on merits.
The learned Departmental Representative submitted that the grievance on the Income-tax portal was filed only on 24.03.2025, irrespective of the fact that the assessee claims to have made the original application in Form No.10AB on 28.09.2024. It was contended that if the assessee had actually filed the application on 28.09.2024, there was no justification for waiting till 24.03.2025 for lodging the grievance and therefore the delay cannot be said to be beyond the control of the assessee.
In reply, the learned AR submitted that after generating and uploading Form No.10AB on 28.09.2024, the assessee was expecting notice from the office of the CIT(E). Since no notice was received, it was bonafidely presumed that the application had been successfully filed and reflected on the portal. It was further submitted that subsequently, on verification, it was noticed that the application was not appearing on the portal, where after Blossom Charitable Trust grievance was immediately raised on 24.03.2025. It was specifically pointed out that the Form No.10AB generated on 28.09.2024 bore Acknowledgement No. 530865080280924, evidencing that the application had in fact been generated within time.
We have heard the rival submissions and perused the material on record. From the record, it is evident that the application has been rejected solely on the ground of limitation under clause (iii) of the first proviso to section 80G(5) of the Act and without examining the genuineness of activities or compliance with the conditions of section 80G(5) on merits.
The assessee has consistently pleaded that Form No.10AB was generated on 28.09.2024 within the prescribed time and that its non-reflection on the portal was due to technical failure. This factual plea has not been examined by the CIT(E). The rejection of the application without adjudicating the factual explanation and without examining the claim on merits results in denial of substantive benefit solely on account of a procedural lapse.
In our considered view, having regard to the fact that the assessee holds registration under section 12A and provisional approval under section 80G(5), the application ought to have been adjudicated on merits after considering the assessee’s explanation regarding portal failure.
Therefore, in the interest of justice, the impugned order passed by the CIT(E) is set aside and the matter is restored to his
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 30.01.2026.