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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: JUSTICE (RETD.) C V BHADANG&
O R D E R
Per Padmavathy S, AM:
This appeal by the assessee is against the order of the Commissioner of Income Tax (Exemptions), Mumbai [In short 'CIT(E)'] dated 26.06.2025 rejecting the registration sought by the assessee under section 80G of the Income Tax Act, 1961 (the Act).
2. The assessee is a Charitable Trust registered under Bombay Public Trusts Act, 1950 with Charity Commissioner, Mumbai. The assessee registered under section 12A of the Act upto 31.03.2026 and is having provisional approval under section 80G granted upto 31.03.2024. The assessee made the Shri Satguru Sainath Charitable Trust application for renewal of 80G approval on 17.05.2024 and the said application was rejected on the ground that the application is made under the wrong section 80G(5)(iv)(B). The assessee subsequently submitted the second application on 29.11.2024 under section 80G(5)(iii) of the Act. The said application was also rejected by the CIT(E) stating that the assessee has not shown a reasonable cause for delay in filing the application and the CIT(E) did not condone the delay. Further the CIT(E) also held that the assessee has not offered any comments on violation of section 11 caused by the objects of the Trust-deed. The assessee is in appeal before the Tribunal against the order of the CIT(E).
We heard the parties and perused the material on record. The assessee is a Charitable Trust having registration under section 12A of the Act. The first application made by the assessee for renewal of 80G which was rejected on the ground that the application is made under wrong section. The relevant observation of the CIT(E) in this regard are extracted below: “1 Mis Shri Satguru Sainath Charitable Trust (hereafter the applicant or the assessee'] filed application in Form 10AB under clause (iv)(B) of 1st proviso to 80G(5) seeking approval under section 80G of the Act.
Under the relevant section 80G(5)(iv)(B) of the Act, in any other case, where activities of the trust or institution have “………. (B) commenced and no income or part thereof the said trust or institution has been excluded from the total income on account of applicability of sub- clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, or section 11 or section 12, for any previous year ending on or before the date of such application, at any previous year ending on or before the date of such application, at any time after the commencement of such activity 3. On verification of the facts and circumstances of the case, it is found that the trust was incorporated on 17.12.1996. Further, the assessee has already claimed exemption by filing ITR-7 for A.Y. 2022-23 & A.Y. 2023-24 i.e. before applying for approval in Form 10AB (Previous Years).
Shri Satguru Sainath Charitable Trust 4. As per above mentioned provision of Income Tax Act, the assessee has to file Form 10AB u/s 80G(5)(iv)(B), if the assessee has not claimed exemption in Previous years. Since the assessee has claimed exemption in Previous years, therefore this application u/s 80G is not allowable Further, the assessee is not fulfilling the stipulated conditions prescribed for filing application for approval in Form 10AB.
5. In view of the above this application Form is hereby rejected.”
Subsequently, the assessee made the second application under the right section on 29.11.2024. The CIT(E) rejected the application on the ground that there was a delay in submitting the application for registration under section 80G according to which the application should have been made at least six months prior to expiry of the period of the provisional approval or within six months of commencement of its activities. The CIT(E) also rejected the 80G registration for the reason that the object clause of the Trust-deed includes application outside India. From the perusal of the order of the CIT(E) we notice that the CIT(A) has considered only response explaining the reason for delay in filing the second application under section 80G and has not considered the other details submitted on merits (page 162 to 424 of paper book). We further notice that the CIT(E) did not condone the delay stating that the first application made by the assessee itself is not within the due date. However, it is relevant to note that the CIT(E) while rejecting the first application under 80G did not record any finding with regard to the delay but has rejected the application on the ground that the application is made under wrong section. Further the Co-ordinate Bench in various cases has been consistently taking the view that mere mention of wrong section cannot be the ground for rejecting the registration under section 80G unless the assessee is otherwise not eligible. It is also relevant to consider the observations of the Kolkatta Bench of the Tribunal in the case Sarda Mission Sevasram vs. CIT (ITA No. 994/Kol/2023 dated 31.01.2024) while considering a similar issue has Shri Satguru Sainath Charitable Trust observed that the CIT(E) ought to have given opportunity to the assessee to rectify the mistake i.e. the mentioning of the appropriate Clause or even could have suo- moto passed an order treating the said application under the relevant 'Clause-in' of Section 80G(5) of the Act. Accordingly we are unable to agree with the finding of the CIT(E) that the rejection of first application is not a reasonable cause for the delay in filing the second application and the delay is thus condoned. As already stated the CIT(E) did not examine the application on merits based on the documents submitted but has merely stated that the delay is not condoned and that the assessee has not fulfilled the stipulated conditions. Considering these facts peculiar to assessee's case and in the interest of natural justice and fair play, we are remitting the appeal back to the CIT(E) to consider the application for registration under section 80G on merit by calling for relevant details and consider the same in accordance with law. The assessee is directed to file all the required details as may be called by the CIT(E).
In result, appeal filed by the assessee is allowed for statistical purposes.