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Facts
The assessee, a charitable trust, applied for renewal of registration under Section 12AB of the Income Tax Act. The application was filed on 17.11.2023, which was after the stipulated deadline of 30th September 2023. The CIT(E) rejected the application as belated without considering its merits.
Held
The Tribunal noted that the timeline for filing Form 10AB has been extended by various CBDT circulars due to genuine hardship faced by charitable institutions. Therefore, the issue is remitted to the CIT(E) to consider the application in accordance with the CBDT circulars.
Key Issues
Whether the CIT(E) was justified in rejecting the renewal application as belated, without considering the impact of CBDT circulars extending the filing deadline.
Sections Cited
Section 12A, Section 12AB
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Income Tax Appellate Tribunal, ‘B’ BENCH : BANGALORE
Before: SMT BEENA PILLAI & SHRI LAXMI PRASAD SAHU
ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present appeal arises out of the order passed by Ld.CIT(E), Bangalore dated 12/04/2024 on following grounds of appeal: “1) The Ld. Commissioner of Income Tax (E) erred in law and on facts in rejecting the application made by the Appellant Trust for renewal of registration u/s.12 AB of Income Tax Act without going into the merits of the case.
Page 2 ITA No. 857/Bang/2024
2) The Ld. Commissioner of Income Tax (E) erred in law and on facts in cancelling the provisional registration granted on 01.10.2021 without following the due process of law stating that the application was filed beyond the permitted date. 3) The Ld. Commissioner of Income Tax (E) erred in la‘‘ and on facts that provisional registration granted on 01.10.2021 without even going through the merits and genuineness of the activities of the Trust and in absence of any violation of conditions prescribed under law, rejecting granting of Registration is not justified. 4) The Appellant submits that as per amended provisions of section 12 AB, though the application for renewal was required to he filed 6 months prior to expiry of the period of the provisional approval or within 6 months of commencement of its activity, whichever is earlier, the Appellant could not submit the application because due date for Income tax returns filing was required to be followed, hence the advisors could not file the renewal application earlier to 6 months. However, the Appellant submits that filing of Form 10AB was only procedural in the matter and what was necessary to be seen is the genuineness of activities of the Trust. 5) For the above and any other grounds that may be advanced at the time of hearing, the appellant prays that the appeal be allowed.”
Brief facts of the case are as under: 2.1 The assessee is a registered Charitable Trust, carrying out various charitable activities like Relief of the Poor, Education, Medical Relief, in particular with Stroke Management, Advancement of any other objects of General Public Utility, etc. The Trust applied for registration u/s.12AB of Income tax Act and Provisional Registration in Form-10AC was granted to the Assessee vide document identification No. AAETK5296NE2021501, Unique Registration No.
Page 3 ITA No. 857/Bang/2024 AAETK5296NE20215 effective from 01.10.2021. Initially Provisional Registration was given under Sub Clause (iii) of Clause (ac) of Sub section (1) of Section 12A of Income Tax Act. The Provisional Registration was from AY 2023-24 to 2024-25. Since the Provisional Registration was only upto Asst.Year 2024- 25, as required under Sub Clause (vi) of Clause (ac) of Sub section (1) of Section 12A of Income Tax Act, the Assessee Trust was required to make an application for registration of the Trust atleast 6 months prior to expiry of the period of the Provisional Registration, that means the Trust should have made an application for registration before 30th September 2023. However the Assessee Trust made an application for renewal on 17.11.2023 under Ack.No.516681970171123.
2.2 The Ld. Commissioner of Income tax, without going into the merits of the case and the activities carried out by the Trust, rejected the application as well as registration earlier granted was cancelled. The only reason given by the Ld.CIT(E) in the impugned order is that “the present application is filed only on 17th November 2023, which is beyond the time limit specified under Sub Clause (iii) of Clause (ac) of Sub section (1) of Section 12A of Income Tax Act. Thus the application is filed belatedly”.
2.3 The Commissioner (Exemption) observed that assessee was required to file application in Form No. 10AB under section 12A within time period of at least six months prior to expiry of period of provisional approval or within six months of commencement of Page 4 ITA No. 857/Bang/2024 its activities, whichever was earlier. .Hence, there was delay in filing the Form. Commissioner (Exemption) held that the time limit prescribed under section 12A(1)(ac)(iii) was mandatory and rejected the same.
2.4 The Ld.AR before us submitted that, the due date for filing the Income tax returns for all the Trust and Tax Audit cases was in the month of September and also the return of income of the Trust and Tax Audit of the assessee were required to be filed in the month of October. Therefore there was delay of one month in filing application for renewal of registration under Sub Clause (vi) of Clause (ac) of Sub section (1) of Section 12A of Income Tax Act.
2.5 The Ld.AR relied on CBDT circular dated 25/04/2024 and submitted that he time period to file Form 10AB has been extended till 30/06/2024.
On the contrary, the Ld.DR relied on the orders passed by Ld.CIT(E). We have perused the submissions advanced by both sides in the light of records placed before us.
The only issue in this appeal of assessee is against the order of CIT (Exemption) rejecting Form No. 10AB dated 17/11/2023 filed for seeking approval under section Page 5 ITA No. 857/Bang/2024 12A(1)(ac)(iii) of the Act treating the same as belated. The assessee was granted provisional registration on 01/01/2021. It is noted that the timeline prescribed for filing Form No. 10AB for registration under section 12AB in the case of assessee has been extended vide various CBDT circulars, vide Circular No. 6/2023 dated 24/05/2023 and Circular 7 dated 25/04/2024, after considering the genuine hardship faced by charitable institutions. We therefore remit this issue to the file of Ld.CIT(E) to consider the application of the assessee as per the CBDT circular in accordance with law. Accordingly, the grounds raised by the assessee stands allowed. In the result, the appeal filed by the assessee stands allowed. Order pronounced in the open court on 24th June, 2024.