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Facts
The assessee, Oswal Charities, filed an appeal against the order of the CIT(E) rejecting its application for approval under Section 80G. The assessee's application was rejected because its trust objects were deemed religious and contravened the conditions of Section 80G(5) of the Act. The appeal was filed late by 101 days due to a technical glitch.
Held
The Tribunal condoned the delay in filing the appeal due to sufficient cause. The Tribunal noted that the assessee's trust objects were not in consonance with Section 80G(5) but allowed the assessee to modify its trust deed for the benefit of the general public. The CIT(E) was directed to examine and accept the modified trust deed and grant registration if found eligible.
Key Issues
Whether the assessee's trust objects contravene the conditions of Section 80G(5) and whether the delay in filing the appeal should be condoned.
Sections Cited
80G(5)(iii), 80G(5), 80G(5B)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: DR. ARJUN LAL SAINI & SHRI DINESH MOHAN SINHA
(�नधा�रणवष� / Assessment Year: (2024-25) (Hybrid Hearing) Oswal Charities CIT(Exemption) Vs. Satish Sadan, Street No.44, Digvijay Ahmedabad - 380015 Plot, Jamnagar- 361005 �थायीलेखासं./जीआइआरसं./PAN/GIR No.: AAATO0228Q (Appellant) (Respondent) Appellant by : Ms. Amoli Gusani, Ld. AR Respondent by : Shri Sanjay Kumar, Ld. CIT(DR) Date of Hearing : 18/06/2025 Date of Pronouncement : 31/07/2025 आदेश / O R D E R PER DINESH MOHAN SINHA, JM:
Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2024-25, is directed against the order passed by the Learned Commissioner of Income Tax(Exemption), wherein the Ld. CIT(E) rejected the assessee’s application in Form 10AB for approval u/s. 80G(5)(iii) of the Act dated 25.07.2024, and also rejected provisional approval, and also cancel the provision of the assessee.
Grounds of appeal
raised by the assessee are as follows: “1. The Rejection Order is bad in law.
2. The Rejection of the application to get approval u/s. 80G on the grounds that violated the main conditions of Sub-section (5) of Section 80G of the Act and also the existing provisions of clause (iii) of Sub-section (5) of Section 80G of the Act and hence the applicant is not entitled to get approval u/s 80G of the Income-Tax Act, 1961, may please be disregarded”
Oswal Charities v. CIT(E) 3. At the outset, that the appeal filed late by 101 days. The Ld. AR of the assessee has filed an application for condonation of delay, supported by Affidavit. The application for delay is, as under; “Being aggrieved by this the appellant Trust has preferred an appeal as on 03.09.2024. As per the instructions received verbally from the ITAT, Rajkot, the said appeal was filed online via the E-filling Portal of the Income Tax Appellate Tribunal. However, from the information received from the records of the department, the said appeal is not reflecting online to have been filed. The said error is on part of some technical glitch by which the appeal filed is not reflecting anywhere in the portal at present. To substantiate the genuineness of the appeal being actually filed by the appellant Trust as on 03.09.2024 is the Challan receipt for the Appeal Fees paid by it in this regards. The said challan receipt is attached herewith for your ready reference. Hence, due to the reason of being unaware about the appeal not reflecting online we have filed the appeal physically as on 08.01.2025 by which it got time barred by 101 days. There was no intention for the delay in filling the appeal before the Honorable Income Tax Appellate Tribunal, Rajkot.”
We note that it was technical glitch, appeal filed through ITA portal but it was not showing on the designated website of the department, then the assessee filed manually appeal before this Tribunal, therefore, the appeal could not be filed in time. The Ld. AR of the assessee requested, that delay may kindly be condoned. After hearing submission of the Ld. AR, we are of the view, that there is sufficient cause for condonation of delay in filing the appeal. The Ld. DR has no objection if the above said delay is condoned. Hence, we find sufficient cause for condonation of delay in filing the appeal and hence, the delay is condoned appeal heard on merit.
Brief facts of the case that the appellant is a Charitable trust established since April 1972. The main object of the Appellant Trust is to carry out charitable activities for the welfare of public in general. The Trust offers yatrikgruh accommodations for General Public with essential amenities along with food supplies. Such facilities are provided at minimal cost. Surplus funds are diverted towards welfare initiatives like medical care and education and other welfare activities of public at large. Considering the eligibility of the Oswal Charities v. CIT(E) Appellant Trust, the applicant submitted an application in Form 10AB under Section 80G of the Income Tax Act, 1961, to seek the registration from IT department. Notices dated 20.05.2024 and 15.07.2024 were issued to the Appellant Trust for submitting documents and details, in support of the application. The applicant provided the detailed response and evidence via written submission dated 20.05.2024 and 15.07.2024 clarifying that the trust operates solely for charitable purposes, not for any other purpose. However, this explanation was not considered by the Ld. CIT(E). Resultantly, the Order rejecting the said application of the Trust, was passed by the Ld. CIT (Exemption), stating that the object no. 1,2 and 3 of the trust are religious in nature and clearly contravenes main condition of 80G(5) of the Act, thereby denying approval under the Act.
Aggrieved by the order of the Ld. CIT(E), the assessee is in appeal before us.
During the course of argument, the Ld. AR of the assessee submitted documents in response to the application, like, Bank Statement, Audit Report and financial Report for 3 years along-with other documents. The Ld. AR prayed that one more opportunity may kindly be given to the assessee to explain the case before the Ld. PCIT.
On the other hand, the Ld. DR for the revenue relied on the order of the Ld. CIT(E), and not objected to the prayer of the Ld. AR.
We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that Ld. CIT(E) has rejected the application of the assessee on the ground that the object of the assessee’s trust Oswal Charities v. CIT(E) are violated the mandatory condition, simultaneously violated the provisions of law. The relevant section 80G(5B) is reproduced below:- "[(5-B) Notwithstanding anything contained in clause (ii) of sub-section (5) and Explanation 3, an institution or fund which incurs expenditure, during any previous year, which is of a religious nature for an amount not exceeding five per cent. of its total income in that previous year shall be deemed to be an institution or fund to which the provisions of this section apply."
We have heard both the parties and carefully examine the record available before us and gone through the submission put by the Ld. AR upon perusal of the finding in the order of the Ld. PCIT and other material brought on record. We note that the object of the trust are not in consonance with sub clause of s. 80G(5) of the Act, the Ld. AR of the assessee has undertook the responsibility to modify the object of the assessee’s trust which may be for the benefit of general public and the object will not be contrary to the main provision of the Act, thereafter the Ld. AR of the assessee requested the bench to assessee’s trust wants to submit the modify object trust deed with the Ld. CIT(E), therefore, we direct the Ld. CIT(E) to examine the same and accept the modify object of the assessee’s trust. The Ld. CIT(E) after examination of the object of the trust and other activities of the trust, if finds eligible for registration, then the registration may be granted to the assessee trust in accordance with law.
In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 31 -07-2025.