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Facts
The assessee, a charitable trust, filed appeals against separate orders dated 23/06/2022 and 24/01/2023 by the CIT (Exemptions) rejecting their applications for approval under Section 80G. The appeals were filed belatedly, with the delay attributed to the assessee's reliance on consultants for online filing of applications under a new process.
Held
The Tribunal condoned the delay in filing the appeals, acknowledging the assessee's dependence on consultants and the genuine errors made in the application process. The Tribunal set aside the impugned orders and remanded the matter back to the CIT(E) to decide the issue afresh after considering the application made under the correct provisions.
Key Issues
Whether the delay in filing the appeals for 80G approval is justifiable, and whether the CIT(E)'s rejection of applications due to procedural errors should be set aside.
Sections Cited
80G, 10AB
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Income Tax Appellate Tribunal, ‘C’ BENCH
Before: SHRI AMIT SHUKLA & SHRI GIRISH AGRAWAL&
O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeals have been filed by the assessee against separate order dated 23/06/2022 and 24/01/2023 passed by CIT (Exemptions) rejecting the application in Form 10AB seeking approval u/s.80G. Both the appeals of the assessee are barred by limitation also.
The brief facts qua the issue involved and also the reasons for filing appeal belatedly before this Tribunal are that, assessee is a charitable trust registered since 10/01/1980 looking to its activities carried out for charitable purposes which was granted registration u/s.12A and approval u/s.80G from time to time. The last approval u/s.12A / 12AA was granted to the Trust on 24/09/2021 and even the approval u/s.80G was also granted from time to time. It has been stated that post year 2021 the process of application for renewal of approvals u/s.12A and 80G was made completely online by way of e-filing. Since assessee trust was not well versed with e-filing and new compliances and Rules, was dependent upon the consultants. The Consultant made lot of errors as procedures were new, he made mistake in filing such application by quoting wrong clause of section 80G.
It has been further stated that at the time of making the application for renewal of approval u/s 80G on 11.06.2022, the assessee had erroneously mentioned 'clause (iv) of First Proviso to sub-section (5) of Section 80G in Form 10A', instead of clause (i) of the First Proviso to sub-section (5) of Section 80G in Form 10A' under a mistaken belief. This was under the advice of the consultant. Further, this genuine error could also not be corrected since there was no option to correct the said Form 10A once it was uploaded. As a result, it was beyond the control of the assessee to correct the same. The assessee was granted provisional approval u/s 80G on 23.06.2022, for a period from 23.06.2022 to AY 2024-25, though it should have been granted upto AY 2025-26. Since assessee had erroneously mentioned 'clause (iv) of the first Proviso to Sub-Section (5) of Section 80G in form 104' under a mistaken belief, therefore, immediately on 06.07.2022, the assessee filed another application seeking final approval u/s 80G under 'clause (iii) of the first proviso to section 80G in Form 10AB. Thereafter, in pursuance of the aforesaid application, notices were issued by ld. CIT (E), assessee could not reply to the said notices issued on 15/12/2022 to 10/01/2023 as assessee was completely dependent on the tax consultant and he was not aware of any such notices and none of these notices were served to the assessee trust physically or through e-mail registered on the Income Tax portal. Thus, non-attendance was unintentional because assessee was not aware of the notices. Since there was no reply, ld. CIT (E) passed exparte order rejecting the applications.
However, instead of pursuing the said application by challenging the order dated 24.01.2023 passed by the CIT (E) in appeal, the assessee's Consultant filed another online application for renewal of 80G on 29.09.2023. This time it was filed under clause (ii) of the First Proviso to section 80G in Form 10AB. This was on the erroneous understanding that since the provisional registration granted vide order dated 23.06.2022 was to expire in AY 2024- 25, therefore an application for final registration was to be made within six months prior to the date of expiry of provisional registration. However, this application was again rejected vide order dated 13.01.2024 on the ground that it was made under clause (ii) of the First proviso instead of clause (iii) of the First Proviso to section 80G.
Then again another application for approval u/s 80G was filed on 12.02.2024 by the Consultant of the assessee. This time it was filed under sub- clause (B) of clause (iv) of the First Proviso to Section 80G. In response to the said application, two notices dated 07.06.2024 and 10.06.2024 were issued by the CIT(E) which were duly responded to. Finally, another order rejecting the said application and denying the registration u/s 80G was passed by the CIT (E) on 08.08.2024. This time the application was rejected on the ground that, "Since the assessee has already claimed exemption in previous years, therefore this application w/s 80G is not allowable. Further, the assessee is not fulfilling the stipulated conditions prescribed for filing application for approval in Form 10AB. In view of the above this application Form is hereby rejected.”
After receiving the said orders, the assessee trust again sought consultation from the Tax Consultant and there was no satisfactory reply received from him, and then another Tax Consultant was consulted, he advised that both the order passed by Ld. CIT(E) should have been pursued before this Tribunal and accordingly, the present appeals were filed by the assessee trust. The reasons for delay have been stated that assessee was pursuing different applications for the very same registration under advice of its Consultant and since it was unaware of the nitty gritty and complexities of the tax law, it was wholly dependent on its consultant for the present matter. It is because of this that the right course of action could not be taken in due time. The assessee purely acted under advice and probably took untenable courses of action, though it was always diligent in pursuing its registration u/s 80G. As a result, no appeal was filed against the order dated 24th January, 2023. As such under advice from the Tax counsel, an appeal is being filed against the said orders dated 23.06.2022 and 24.01.2023 passed by the CIT (E). Thus, it has been stated that the delay of 572 days should be condoned.
After hearing both the parties and on perusal of the material placed and averments made in the application filed before us, we are condoning the delay because assessee was dependent upon consultant who was continuously filing separate application for renewal of 80G without understanding the whole process. Since assessee was depending on Tax consultant which has led to filing of multiple applications online, therefore, it is a good case for condoning the delay because there was no latches on part of the assessee. Since assessee could not make proper representation before the ld. CIT(E) and also now correct application has been filed therefore, matter is set aside to the ld. CIT(E) to decide the issue afresh considering the application made under the correct provisions i.e. under Clause (i) of the First Proviso of sub-Section (5) of Section 80G in form 10AB. Accordingly, the impugned orders are set aside and matter is remanded back to the file of the ld. CIT(E) to decide the issue afresh in accordance with law after giving due opportunity of hearing to the assessee. 8. In the result, both the appeals of the assessee are allowed.
Order pronounced on 13th December, 2024.
Sd/- Sd/- (GIRISH AGRAWAL) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 13/12/2024 KARUNA, sr.ps Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy//
BY ORDER,
(Asstt. Registrar) ITAT, Mumbai