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Facts
The assessee, a registered trust, applied for renewal of its registration under Section 80G(5) of the Income Tax Act. Initially, the application was filed under an incorrect sub-clause. Upon realizing the mistake, a fresh application was filed under the correct sub-clause within the extended time limit. However, the CIT(Exemption) rejected both applications, first for being under the wrong clause, and the second for being non-maintainable.
Held
The Tribunal held that the CIT(Exemption)'s approach of treating the second application as non-maintainable based on the rejection of the first application was incorrect. The second application was a fresh and independent application filed within the prescribed extended time. The initial error was procedural, and the subsequent filing under the correct provision rectified it. Therefore, the applications should have been considered on merits.
Key Issues
Whether the CIT(Exemption) was justified in rejecting the assessee's application for renewal of registration under Section 80G(5) as non-maintainable, despite it being filed under the correct provision within the extended time limit.
Sections Cited
80G(5)(iii), 12A, 12AB, 11
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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: DR. ARJUN LAL SAINI & SHRI DINESH MOHAN SINHA
IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकरअपीलसं./ITA No. 93/RJT/2025 (�नधा�रणवष� / Assessment Year: (NA) (Hybrid Hearing) Sardar Patel Seva Samaj Vs. CIT(Exemption) C/o. Sardar & Sarda (CA), Sarkar Room No. 609, Floor No. 6, ayakar 1st Floor, Dr. Radha Krishna Road, Bhavan (Vejalpur), Prahalad nagar, Opp. Rajkumar College, Road, Ahmedabad - 380015 Rajkot – 360001 �थायीलेखासं./जीआइआरसं./PAN/GIR No.: AAETS0097D (Appellant) (Respondent) Appellant by : Shri Vimal Desai, Ld. AR Respondent by : Shri Sanjay Punglia, Ld. CIT(DR) Date of Hearing : 30/04/2025 Date of Pronouncement : 03/07/2025 आदेश / O R D E R PER DINESH MOHAN SINHA, JM:
Captioned appeal filed by the assessee, 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 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 order passed under clause (ii)(b)(B) of second proviso to section 80G(5) of the Act is bad in law. 2. The learned CIT (Exemption) has erred in law as well as on facts in rejecting the application for registration u/s 80G(5) under clause (iii) of its first proviso by considering it as non-maintainable.
ITA No. 93/Rjt/2025 Sardar Patel Seva Samaj
Brief facts of the case that the appellant is a trust registered with the office of the Charity Commissioner with effect from 10.09.1996. The appellant trust is carrying on charitable activities in terms of objects contained in the trust deed. A copy of trust deed is enclosed herewith. The appellant is registered under section 12A(1)(ac) of the Income-tax Act, 1961 in accordance with the provisions of Section 12AB of the Income-tax Act, 1961. The appellant was granted provisional registration under section 80G(5) upto A.Y. 2024-25. A copy of registration certificate u/s. 80G(5) of the Act issued to the appellant on 29.03.2022 in Form No. 10AC having validity period from 29.03.2022 to 2024-25 is enclosed herewith. The income of the appellant is eligible for exemption u/s. 11 of the income-tax Act, 1961. The appellant has duly get its books of account audited and has regularly filed its return of income from time to time reporting therein the details of activities, income and its application. The appellant had thereafter applied for renewal of its aforesaid registration which was under wrong sub clause (iv) of Section 80G(5) vide online application in Form No. 10AB dated 22.03.2024. On becoming aware about the mistake in quoting the correct section in the application for renewal of registration, the appellant filed fresh application for renewal of its registration under correct sub clause (iii) of first proviso to Section 80(5) vide online application in Form No. 10AB on 04/06/2024, which is within the extended time limit i.e. 30/06/2024 allowed by the CBDT vide its Circular No. 7 dated 25/04/2024. The learned CIT(Exemption), Ahmedabad rejected the first application dated 22.03.2024 vide order dated 03.09.2024, on the ground of non-compliance as it was filed under wrong clause. The second application dated 04.06.2024 has also been rejected by the learned CIT (Exemption) vide order dated 17.12.2024 by considering the application as non-maintainable. The learned CIT (Exemption) has failed to consider the fact that the application dated 04.06.2024 was a fresh application which was filed within the extended time Page | 2
ITA No. 93/Rjt/2025 Sardar Patel Seva Samaj
limit and it was not filed against the rejection order of the first application. The fresh application dated 04.06.2024 was independent of the first application, the learned CIT(Exemption) has considered the second application of the appellant dated 04.06.2024 as non-maintainable and is liable to be rejected. 4. Aggrieved by the order of the Ld. CIT(E), the assessee is in appeal before us. 5. During the course of argument, the Ld. AR of the assessee submitted that application dated 22.03.2024 was mistakenly filed by assessee under incorrect clauses. The subsequent application filed on 04.06.2024 was rejects as non-maintainable. The Ld. AR prayed to the Ld. CIT(E) examined the application on merit after considering the documents. 6. 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. 7. We have carefully considered the rival contentions and perused the materials available on record. The assessee’s applications dated 04.06.2024 filed under the correct statutory provisions, which were treated by the CIT(Exemption) as non- maintainable, without adjudication on merits. It is a matter of record that the assessee initially filed online applications for registration under section 12A and for approval under section 80G on 22.03.2024, under incorrect clauses. This fact is not in dispute. Upon rejections and recognising that the earlier applications dated 22.03.2024 were filed under incorrect statutory clauses, the assessee filed corrected applications on 04.06.2024 under the appropriate provisions, namely: • Clause (iii) of the first proviso to section 80G(5) of the Act.
ITA No. 93/Rjt/2025 Sardar Patel Seva Samaj
The approach adopted by the CIT(Exemption) in treating the said applications as non-maintainable on the basis that the earlier applications were rejected, is not tenable in the facts and circumstances of the present case. The assessee had not filed a revision or appeal against the earlier orders. Instead, the second applications were made suo moto under the correct provisions within the prescribed extended window allowed for filing as specified in the CBDT Circular No. 07/2024 dated 25.04.2024. In such a situation, it was incumbent upon the CIT(Exemption) to treat the applications as fresh and standalone, and to examine the same on merits in accordance with law. The principle of fairness and natural justice required the authority to consider the substance of the matter rather than rejecting the application on the ground of non-maintainable, we find merit in the submission of the assessee, that the assessee’s trust is entitle for a fair adjudication on merits. In our considered opinion, the CIT(Exemption) failed to appreciate the distinction between a defective application and a correct application and improperly treated the second application as non- maintainable. The error in quoting a wrong sub-clause initially was procedural in nature, and the subsequent filing under correct provisions rectified the same. There was no bar in law or under the CBDT Circular for the assessee to file such fresh applications. 9. We hold that the orders dated 17.12.2024 passed by the CIT(Exemption), Ahmedabad, rejecting the assessee’s applications under clause (iii) of the first proviso to section 80G(5) of the Income- tax Act, 1961, as non- maintainable, are legally unsustainable and deserve to be set aside, and the matters are restored to his file with following directions: i. The CIT(Exemption) shall treat the assessee’s applications dated 04.06.2024 in section 80G(5)(iii) as valid, curative, and maintainable, and proceed to dispose of them on merits in accordance with law.
ITA No. 93/Rjt/2025 Sardar Patel Seva Samaj
ii. The said applications shall be treated as having been filed within the period prescribed under the Act, taking into account the extended deadline allowed vide CBDT Circular No. 07/2024 dated 25.04.2024.
The assessee is directed to fully cooperate in the proceedings before the CIT(Exemption) and to furnish all requisite information and documents as may be required to facilitate timely adjudication.
In the result, the appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open court on 03-07-2025.
Sd/- Sd/- (A. L. SAINI) (DINESH MOHAN SINHA) ACCOUNTANT MEMBER JUDICIAL MEMBER Rajkot �दनांक/ Date: 03/07/2025 Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr. CIT 5. DR/AR, ITAT, Rajkot 6. Guard File By Order
Assistant Registrar/Sr. PS/PS ITAT, Rajkot