SHREE CHAITANYA-RAM FOUNDATION,BAVDHAN vs. CIT EXEMPTION, PUNE

(2) that on the facts and in the circumstances of the case and considering the principles of natural justice, the matter should be set aside to the file of the Assessing Officer to be decided afresh after considering the merits of the application and providing a fair opportunity to the appellant. (3) It is therefore prayed that the Hon'ble ITAT may pleased to a. Quash the order of the learned CIT (E) dated 09/09/2025 b. Set aside the matter to the file of the Assessing Officer with a direction to re-adjudicate the application under Section 12AB after providing a reasonable opportunity to the appellant. c. Pass any other order as Hon'ble Tribunal deems fit and proper in the interest of justice.

(3) that on the facts and in the circumstances of the case and considering the principles of natural justice, the matter should be set aside to the file of the Assessing Officer to be decided afresh after considering the merits of the application and providing a fair opportunity to the appellant.

(4) It is therefore prayed that the Hon'ble ITAT may pleased to a. Quash the order of the learned CIT (E) dated 09/09/2025 b. Set aside the matter to the file of the Assessing Officer with a direction to re adjudicate the application under Section 80G after providing a reasonable opportunity to the appellant. c. Pass any other order as Hon'ble Tribunal deems fit and proper in the interest of justice.

“11. In this context, we will like to refer to observations of the Hon’ble Supreme Court in the case of K P Varghase(supra), where in the Hon’ble Supreme Court observed as under : Quote, “It is a well-recognised rule of construction that a statutory provision must be so construed, if possible, that absurdity and mischief may be avoided. There are many situations where the construction suggested on behalf of the revenue would lead to a wholly unreasonable result which could never have been intended by the Legislature. Take, for example, a case where A agrees to sell his property to B for a certain price and before the sale is completed pursuant to the agreement and it is quite well known that sometimes the completion of the sale may take place even a couple of years after the date of the agreement - the market price shoots up with the result that the market price prevailing on the date of the sale exceeds the agreed price at which the property is sold by more than 15 per cent of such agreed price. This is not at all an uncommon case in an economy of rising prices and in fact we would find in a large number of cases where the sale is completed more than a year or two after the date of the agreement that the market price prevailing on the date of the sale is very much more than the price at which the property is sold under the agreement. Can it be contended with any degree of fairness and justice that in such cases, where there is clearly no understatement of consideration in respect of the transfer and the transaction is perfectly honest and bona fide and, in fact, in fulfilment of a contractual obligation, the asses-see who has sold the property should be liable to pay tax on capital gains which have not accrued or arisen to him. It would indeed be most harsh and inequitable to tax the assessee on income which has neither arisen to him nor is received by him, merely because he has carried out the contractual obligation undertaken by him. It is difficult to conceive of any rational reason why the Legislature should have thought it fit to impose liability to tax on an assessee who is bound by law to carry out his contractual obligation to sell the property at the agreed price and honestly carries out such contractual obligation. It would indeed be strange if obedience to the law should attract the levy of tax on income which has neither arisen to the assessee nor has been received by him. If we may take another illustration, let us consider a case where A sells his property to B with a stipulation that after sometime, which may be a couple of years or more, he shall resell the property to A for the same price. Could it be contended in such a case that when B transfers the property to A for the same price at which he originally purchased it, he should be liable to pay tax on the basis as if he has received the market value of the property as on the date of resale, if, in the mean-while, the market price has shot up and exceeds the agreed price by more than 15 per cent. Many other similar situations can be contemplated where it would be absurd and unreasonable to apply section 52(2) according to its strict literal construction. We must, therefore, eschew literalness in the interpretation of section 52(2) and try to arrive at an interpretation which avoids this absurdity and mischief and makes the provision rational and sensible, unless of course, our hands are tied and we cannot find any escape from the tyranny of the literal interpretation. It is now a well-settled rule of construction that where the plain literal interpretation of a statutory provision produces a manifestly absurd and unjust result which could never have been intended by the Legislature, the Court may modify the language used by the Legislature or even 'do some violence" to it, so as to achieve the obvious intention of the Legislature and produce a rational construction -” Unquote. 11.1 Thus, as observed by the Hon’ble Supreme Court, that the statutory provision shall be interpreted in such a way to avoid absurdity. In this case to avoid the absurdity as discussed by us in earlier paragraph, we are of the opinion that the words, “within six months of commencement of its activities” has to be interpreted that it applies for those trusts/institutions which have not started charitable activities at the time of obtaining Provisional registration, and not for those trust/institutions which have already started charitable activities before obtaining Provisional Registration. We derive the strength from the Speech of the Hon’ble Finance Minister and the Memorandum of Finance Bill. 2020. 11.2 Therefore, in these facts and circumstances of the case, we hold that the Assessee Trust had applied for registration within the time allowed under the Act. Hence, the application of the assessee is valid and maintainable.

12. Even otherwise, assessee had received provisional approval under section 80G(5) on 02.10.2021 and it was valid upto A.Y.2024-25. The assessee had applied for registration under section 80G on 13.09.2024 which was before A.Y.2024-25. Thus, assessee had applied for permanent registration under section 80G before the expiry of provisional approval. Therefore, the application of the assessee was not time barred.

13. In these facts and circumstances, we set-aside the order under 80G to ld.CIT(E) for denovo adjudication. The ld.CIT(E) shall give opportunity to the assessee of being heard. Accordingly, grounds of appeal

are allowed for statistical purpose.

14. In the result, appeal of the assessee is allowed for statistical purpose.”

7. Respectfully following the above decision of the Tribunal (supra), and in the light of newly inserted proviso to sub clause vi of clause (ac) of sub-section (1) of section 12A wherein the PCIT or CIT have been empowered to condone the delay if they find that there was reasonable cause in not filing the application within the prescribed time limit, we deem it appropriate to set-aside the order passed by Ld.

CIT, Exemption, Pune and remand the matter back to his file with a direction to treat the application as filed within time and decide the issue afresh as per fact and law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by Ld. CIT, Exemption, Pune in this regard and produce relevant documents/evidences, if any, in support of application for registration u/s 12A(1)(ac)(iii) of the IT Act without taking any adjournment under any pretext, otherwise Ld. CIT, Exemption, Pune shall be at liberty to pass appropriate order as per law. Thus, the grounds raised by the assessee are partly allowed.”

“5. We have considered the submissions of both the parties and perused the record carefully. There is no dispute that the appellant applied for registration under Section 12A/12AB of the Act under Form 10AB on 28.09.2023. The ld. CIT(E) while considering the application of appellant noted that the application filed by appellant is not maintainable and accordingly, a show cause notice dated 02/11/2023 was issued for seeking clarification. The appellant responded to the show cause notice of ld CIT(E) vide their reply dated 15.12.2023. The contents of show cause notice and the reply thereof is not recorded by ld CIT(E) in his order. We find that the appellant vide their reply dated 15/12/2023 prayed to consider the application in appropriate sub-clause of section 12A(1). The ld CIT(E) held that he has no power to change/ amend or rectify Form-10AB. We find that it was an inadvertent mistake and the appellant has already explained the facts and prayed for correction before the ld. CIT(E). In our view the mistake in filing entry was not fatal and could be considered in appropriate sub-clause or clause of section 12A(1). Otherwise, the appellant has provided all the details and information in Form-10AB, while applying for registration under section 12A/12AB. Being first appellate authority, the plea of appellant for correction in Form-10AB is accepted and the order of ld CIT(E) is setaside. The registry official of ld CIT(E) maintaining record of ITBA portal about the registration of trust under section 12A/12AB is directed either to correct such mistake or allow the appellant to rectify or amend the relevant clause/ sub-clause of section 12A(1). Considering the fact that the application of appellant was not considered on merit, therefore, we deem it appropriate to direct the ld. CIT(E) to treat the application of appellant under Section 12A(1)(ac)(iii) in place of Section 12A(1)(ac)(iv) of the Act and to consider the case on merit and pass the order in accordance with law. Needless to direct that before passing the order, the ld CIT(E) shall grant opportunity of hearing to the appellant. The appellant is also directed to furnish complete details to prove its object and activity and make all compliances as desired by the ld. CIT(E). In the result, the grounds of appeal raised by the appellant are allowed for statistical purposes only.”

13. In light of the above decision and having given our thoughtful consideration to the given facts and circumstances prevailing in the instant case, we are of the opinion that the ld. CIT(E) ought to have given an opportunity to the appellant to rectify the defect. Further we are of the view that wrong selection of section code/clause would not disentitle the appellant to its rightful claim. Selection of wrong clause by the appellant cannot be treated as fatal to the proceedings initiated after the filing of the application. We therefore in the interest of natural justice and being fair to both the parties deem it appropriate to grant one more opportunity to the appellant, setting aside the impugned order to the file of ld. CIT(E). The ld.CIT(E) shall give an opportunity to the appellant to file the correct application and then decide the case on merits denovo after granting reasonable opportunity to the appellant. Appellant is also directed to remain vigilant and make satisfactory compliance to the notice(s) of hearing issued by ld.CIT(E). It should refrain from taking adjournments unless otherwise required for reasonable cause. Effective grounds of appeal raised by the appellant are allowed for statistical purposes.”

14. In view of the above discussion and respectfully following the above decisions of the Co-ordinate Bench of the Tribunal cited (supra), we deem it proper to restore the issue to the file of the Ld. CIT(Exemption) with a direction to consider the application for condonation of delay and give an opportunity to the assessee to file correct application removing the defects in selection of wrong code/clause and decide the appeal afresh. Needless to say, the Ld. CIT(Exemption) shall give due opportunity of being heard to the assessee and decide the issue as per fact and law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

15. So far as the application for approval u/s 80G is concerned, since we are restoring the matter relating to registration u/s 12A of the Act to the file of the Ld. CIT(Exemption), therefore considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue of grant of approval u/s 80G of the Act also to the file of the Ld. CIT(Exemption) with a direction to give an opportunity to the assessee to file the requisite details to his satisfaction and decide the issue afresh and in accordance with law. The grounds raised by the assessee in are accordingly allowed for statistical purposes.

Order pronounced in the open Court on 21st January, 2026.

Sd/- Sd/- (ASTHA CHANDRA) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 21st January, 2026 GCVSR आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी / The Appellant; 2. प्रत्यर्थी / The Respondent 3. The concerned Pr.CIT, Pune 4. DR, ITAT, ‘B’ Bench, Pune ग र्ड फ ईल / Guard file. 5. आदेशानुसार/ BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune

S.No. Details Date Initials Designation 1 Draft dictated on 20.01.2026 Sr. PS/PS 2 Draft placed before author 21.01.2026 Sr. PS/PS Draft proposed & placed before the 3 JM/AM Second Member Draft discussed/approved by Second 4 AM/AM Member 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS Date on which the file goes to the Office 9 Superintendent 10 Date on which file goes to the A.R. 11 Date of Dispatch of order