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Facts
The assessee filed an application dated 30.09.2023 in Form 10AB for approval under Section 80G(5) of the Income Tax Act. The CIT (Exemption) rejected this application as non-maintainable, citing that it was not filed within the due date specified. The assessee contended that it was provisionally registered under Section 12AB(1)(b) and that a similar application for that registration was accepted within time.
Held
The Tribunal observed that CBDT Circular No. 7/2024, dated 25/04/2024, specifically extended the time period for trusts to file fresh Form 10AB applications until 30.06.2024, especially when previous applications were rejected solely due to late filing. Given this extension, the Tribunal set aside the order of the Ld. CIT (Exemption) and directed them to pass a fresh speaking order.
Key Issues
Whether the rejection of the application for approval under Section 80G(5) by the CIT (Exemption) was valid, considering the subsequent CBDT circular extending the time limit for filing such applications.
Sections Cited
80G(5), 12AB(1)(b)
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Income Tax Appellate Tribunal, DELHI BENCH ‘A’ : NEW DELHI
Before: SHRI SHAMIM YAHYA & SHRI SUDHIR PAREEK
Order
: 27.06.2024 ORDER
PER SHAMIM YAHYA, ACCOUNTANT MEMBER :
This appeal by the assessee is directed against the order of the ld. CIT (Exemption), Delhi dated 26.03.2024.
Grounds of appeal
taken by the assessee read as under :- “1. On the facts and circumstances of the case, the order passed by Learned Commissioner of Income Tax (Exemptions), Delhi rejecting the application of the assessee for approval under section 80G(5) of the Income Tax Act is bad both in the eye of law and on facts.
2. On the facts and circumstances of the case, the Ld. CIT(E) has erred both on facts and in law in passing the order Form 10AB under clause (iii) of first proviso to sub-section (5) of the Section 80G of the Act as 'non maintainable' as the same has not been filed within the due date specified under the Act.
3. On the facts and circumstances of the case, the Ld. CIT(E) has erred both on facts and in law in ignoring the fact that the assessee was provisionally registered w.e.f. 29.03.2022 to AY 2024-25 vide order dated. 29.03.2022 and impugned application for registration under clause (iii) of first proviso to sub-section (5) of the Section 80G was filed on 30.09.2023 and hence the application was filed within the time limit prescribed under the Act.
4. On the facts and circumstances of the case, the Ld. CIT(E) has erred both on facts and in law in misinterpreting the provisions of law with regard to the time limits for filing the application specified under clause (iii) of first proviso to sub- section (5) of the Section 80G of the Act.
5. On the facts and circumstances of the case, the Ld. CIT(E) has erred both on facts and in law In ignoring the fact that the assessee has been granted the registration under section 12AB(1 )(b) vide order dated 27.03.2024 wherein the similar time limits are applicable for filing of application by the assessee and the same was accepted by the CIT(E) and held as filed within the time limit.
6. On the facts and circumstances of the case, the order passed by Id. CIT(E) are in violation of the statutory conditions of the Act and the procedure prescribed under the law and as such the same is bad in the eye of law and liable to be quashed.
7. On the facts and in the circumstances of the case, Ld CIT(E) erred in rejecting the application for registration u/s BOG(5) of the Act, 1961 of the assessee despite the fact that there is no adverse finding regarding the aims, objects and genuineness of activities of the trust and hence application for registration cannot be rejected.
8. On the facts and in the circumstances of the case, Ld CIT(E) erred in rejecting the application for registration u/s BOG(5) of the Act, 1961 despite the fact that the assessee has 12AB(1)(b) Act vide order dated 27/03/2024.
9. On the facts and circumstances of the case, the Ld. CIT(E) has erred both on facts and in law in relying upon the judgments which are contrary to the facts of the present case and distinguishable."
The assessee has filed an application dated 30.09.2023 in Form 10AB for approval under clause (iii) of first proviso to section 80G (5) of the Income-tax Act, 1961. Ld. CIT (Exemption) rejected the application as non- maintainable by observing as under :- “6. From Form 10AB filed, it is observed that the applicant has mentioned the date of Incorporation/Creation/Registration as 20.05.2020 and has obtained order or provisional approval in Form No. 10AC issued on 29.03.2022 under Clause (iv) of first proviso to sub-section (5) of section 80G for the period commencing from 29.03.2022 to 2024-25. 6.2 The applicant has filed Form 10AB under Clause (iii) of first proviso to sub- section (5) of section 80G of the Act on 30.09.2023. However, it is noticed from the details available on record by way of information provided in form 10AB and Income and Expenditure and balance sheet filed for the different assessment Years, that the activities were already commenced at the date of obtaining of provisional approval. 6.3 On being asked to justify the application filed in form 10AB for approval u/s 80G, no tenable / justifiable reply has been filed by the assessee. 6.4 From the above, it is evident that the activities of the applicant has already commenced its activities after obtaining the provisional approval and the present application filed in Form NO.10AB under Clause (iii) of first proviso to sub- section (5) of section 80G of the Act has not been filed within the time limit prescribed therein and also the assessee has not filed its application within the extended time limit provided by CBDT vide its circular No. 12 of 2021 dated 25.06.2021, circular No. 16 of 2021 dated 29.08.2021 and circular NO.8 of 2022 dated 31.03.2022. Therefore the above application is liable to be rejected as non maintainable, without going into the merits. 7. In view of the facts discussed above and the fact that provisional certificate u/s 10AC has been issued on 29.03.2022 and the application in form 10AB has not been filed within the statutory time limit, the present application filed in Form NO.10AB under Clause (iii) of first proviso to sub-section (5) of section 80G of the Act is rejected as non maintainable.”
Against the above order, assessee is in appeal before us. We have heard both the parties and perused the records.
Ld. Counsel for the assessee made the following submissions :- “1. That the CBDT has issued Circular no. 7/2024 vide dated 25/04/2024 by allowing the trust etc to file/ furnish a fresh application in Form no 10AB till 30106/2024 ,where an application in form no 10AB has been rejected by the CIT (E) on or before the issuance of said circular vide its Para no 4.1 which is reproduced below:- "4.1 Further, in cases where any trust, institution or fund has already made an application in Form no.10AB, and where the Principal Commissioner or Commissioner has passed an order rejecting such application, on or before the issuance of this circular, solely on account of the fact that the application was furnished after the due date or that the application has been furnished under the wrong section code, it may furnish a fresh application in Form no.10AB within the extended time provided in paragraph 3 (ii) i.e. 30.06.2024." 2. That the said appeal matter is squarely covered by the judgement dated 23/0112024 passed by the Hon'ble ITAT Delhi Bench 'B', in the matter of Freepathshala Vs Commissioner of Income-tax (Exemptions), Chandigarh in & the judgement dated 05/0112024 by the Hon'ble ITAT Pune Bench' A', in the matter of Shri Kailash Math Trust Vs Commissioner of Income-tax(Exemptions), Pune in ITA No.1177/PUN/2023. The copy of said judgements and circular no 7 of 2024 have already been filed before the ITAT vide email dated 21106/2024. Prayer In view of the Circular no 7 of 2024 and the judgements referred above, the appeal be allowed by set-asiding the impugned order dated 26/03/2024.”
Per contra, ld. DR for the Revenue did not have any opposition to the above proposition.
Accordingly, we set aside the order to the file of ld. CIT (Exemption) inasmuch as CBDT has extended the time period to 30.06.2024. Ld. CIT (Exemption) is directed to pass a speaking order in this respect. 8. In the result, the appeal of the assessee stands allowed for statistical purposes. Order pronounced in the open court on this 27th day of June, 2024.