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Facts
The assessee filed an appeal against the order of the CIT(E) dated 09.08.2024, which rejected their application for final approval. The rejection was based on the premise that the application in Form No. 10AB was filed after the expiry of six months from the commencement of activities.
Held
The Tribunal held that the CIT(E) erred in rejecting the application without considering CBDT Circular No. 7/2024, which extended the due date for filing Form No. 10AB. The circular clearly states that pending applications, where no order was passed before its issuance, should be treated as valid.
Key Issues
Whether the rejection of the application for final approval was justified in light of the CBDT Circular No. 7/2024 extending the due date for filing Form No. 10AB.
Sections Cited
80G(5)(iii), 10, 12A
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Income Tax Appellate Tribunal, DIVISION BENCH, AMRITSAR
Before: SHRI UDAYAN DAS GUPTA & SHRI KRINWANT SAHAY
आदेश आदेश/Order आदेश आदेश
Per Krinwant Sahay, AM: Appeal in this case has been filed by the Assessee against the order dated 09.08.2024passed by Commissioner of Income Tax (Exemption), [herein referred to as ‘CIT(E)’], Chandigarh.
Grounds of appeal are as under: - 1. That, the orders passed by the Ld. Commissioner dated 09.08.2024 is illegal, uncalled for and against the law & facts.
506-Asr--2024 S.D. Sabha Gaushala, Ferozepur 2
2 That the Ld. Commissioner of Income Tax (Exemptions). Chandigarh has passed the rejection Order merely on conjectures and surmises without any legal basis.
3 That, the Ld. Commissioner of Income Tax(Exemptions). Chandigarh has miserably failed to appreciate the facts of the case that society has already got Registered under section 80G(5) and order has been passed by Commissioner of Income Tax. Bathinda. So, the order of the Ld. Commissioner of Income Tax (Exemptions). Chandigarh is null and void-ab-intio, it may please be overturned.
That, the Ld. Commissioner of Income Tax(Exemptions), Chandigarh has also failed to consider the CBDT Circular no. 7/2024 dated 25th April, 2024 regarding extension of due date of filing of Form no. 10AB under the Income Tax Act. 1961 till 30th June 2024 duly submitted to Ld. Commissioner of Income Tax (Exemptions), Chandigarh in response to show cause notice dated: 04 07 2024. In this regard please refer to paragraph 3(H) of the said circular, which is read as under: -
"Form no. 10AB, in case of an application under clause (iii) of the first proviso to clause 23(C) of section 10 OR under sub clause (iii) of clause (ac) of sub-section (1) of section 12A or clause (iii) of the first proviso to sub section (5) of section 8oG of the Act, due has been extended till 30-06-2024".
Further also refer to paragraph 4 of this circular (No. 7/2024 dated 25/04 2024) which states as under: -
506-Asr--2024 S.D. Sabha Gaushala, Ferozepur 3
"In cases where any trust, institution or fund has already made an application in Form No. 10AB under 5 The said provisions on or before the issuance of this Circular, and where the Principal Commissioner or Commissioner has not passed an order before the issuance of this Circular, the pending application in Form No 10AB may be treated as a valid application". Thus, the Ld. Commissioner of Income Tax (Exemptions), Chandigarh has passed the rejection order without considering the applicability of above circular which clearly states that application in Form No. 10AB, if any pending before the Principal Commissioner or Commissioner who has not passed an order before the issuance of this Circular may please treat it as a valid application. Our application in Form 10AB dated 16-02-2024 has been furnished under correct code i.e. under section 80G(5)(iii) Which was pending before as on the date of this circular i.e. Circular no. 7 dated 25- 04-2024. Therefore, our case is fairly covered under paragraph 3(ii) and paragraph 4 the said circular.
6 So. the Ld. Commissioner of Income Tax (Exemptions), Chandigarh has erred in law by not applying the above said circular and rejected the application of Assessee.
7 The Assessee craves leave to argue on any other question of law or facts at the time of hearing of this appeal.
During the proceedings before us, the ld. Counsel for the Assessee argued that the rejection of application for final approval is not taken into consideration in terms of CBDT Circular No.7/2024
506-Asr--2024 S.D. Sabha Gaushala, Ferozepur 4 dated 25.4.2024 regarding extension of due date of filing of Form No.
10AB under the Income Tax Act, 1961 till 30.6.2024. During proceedings, the ld. Counsel further argued that the rejection of the application for final approval u/s 80G has been done by the ld. CIT(E) noting that the date of commencement of the activities of the Trust was 05.09.1989 and the filing of the application in Form No. 10AB was 06.02.2024, which was after expiry of six months of commencement of its activities. The ld. Counsel further submitted that now CBDT has issued a Circular No.7 /2024 dated 25.4.2024 and it has extended the time limit for filing Form No.10AB upto30.6.2024 for approval u/s 80G of the Act. The ld. Counsel submitted as under:-
“that, the Ld. Commissioner of Income Tax (Exemptions), Chandigarh has also failed to consider the CBDT Circular no. 7/2024 dated 25th April, 2024 regarding extension of due date of filing of Form no. 10AB under the Income Tax Act. 1961 till 30th June 2024 duly submitted to Ld. Commissioner of Income Tax (Exemptions), Chandigarh in response to show cause notice dated: 04 07 2024. In this regard please refer to paragraph 3(H) of the said circular, which is read as under: - "Form no. 10AB, in case of an application under clause (iii) of the first proviso to clause 23(C) of section 10 OR under sub clause (iii) of clause (ac) of sub-section (1) of section 12A or clause (iii) of the first proviso to sub section (5) of section 8oG of the Act, due has been extended till 30-06-2024".
Further also refer to paragraph 4 of this circular (No. 7/2024 dated 25/04 2024) which states as under: -
506-Asr--2024 S.D. Sabha Gaushala, Ferozepur 5
"In cases where any trust, institution or fund has already made an application in Form No. 10AB under the said provisions on or before the issuance of this Circular, and where the Principal Commissioner or Commissioner has not passed an order before the issuance of this Circular, the pending application in Form No 10AB may be treated as a valid application". Thus, the Ld. Commissioner of Income Tax (Exemptions), Chandigarh has passed the rejection order without considering the applicability of above circular which clearly states that application in Form No. 10AB, if any pending before the Principal Commissioner or Commissioner who has not passed an order before the issuance of this Circular may please treat it as a valid application. Our application in Form 10AB dated 16-02-2024 has been furnished under correct code i.e. under section 80G(5)(iii) Which was pending before as on the date of this circular i.e. Circular no. 7 dated 25-04-2024. Therefore, our case is fairly covered under paragraph 3(ii) and paragraph 4 the said circular.
4. The ld. Counsel further prayed before the Bench that the matter maybe remitted back to the CIT(E) to verify the issue and pass the order accordingly
The ld. DR did not object to this.
We have considered the findings of the ld. CIT(E) on this issue in his order and we have also considered the Circular No. 7/2024 issued by the CBDT vide F.No.173/25/2024-ITA-I dated 25th April, 2024. As
per the Circular the CBDT has extended the date up to 30.06.2024 of
506-Asr--2024 S.D. Sabha Gaushala, Ferozepur 6 filing of Form No. 10AB. Thus, the matter is remanded back to the file of the CIT(E) Chandigarh to examine the issue in the light of the latest Circular No. 7/2024 dated 25.4.2024 and pass an order accordingly.
In the result, the appeal of the Assessee is allowed for statistical purposes. Order pronounced on 03.02.2025