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Facts
The assessee, M/s. Sparsha Trust (R), filed an application in Form 10AB for approval under Section 80G of the Income Tax Act, 1961, belatedly on 16.01.2024, after the expiry of the provisional approval period which was granted on 31.08.2021 and valid till A.Y. 2024-2025. The CIT(E) rejected this application for approval.
Held
The Tribunal, referring to CBDT's Circular No.7/2024 and a similar order by the Bangalore Bench in the case of Samyata Foundation, noted that the circular allows for fresh applications in Form 10AB within an extended deadline of 30.06.2024, especially when rejections were solely due to late filing. Therefore, the matter was restored to the CIT(E) for fresh consideration.
Key Issues
Whether the CIT(E) was justified in rejecting the application for approval under Section 80G solely on the grounds of late filing, despite the applicability of CBDT Circular No.7/2024 extending the deadline for fresh applications?
Sections Cited
80G(5), 10AB
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Income Tax Appellate Tribunal, “A” BENCH : BANGALORE
Before: SHRI GEORGE GEORGE K & SHRI WASEEM AHMEDR
Per George George K, Vice President:
This appeal at the instance of the assessee is directed against the order of CIT(E) dated 04.04.2024 wherein the CIT(E) rejected the application for approval under section 80G of the Act. The reasons for rejection of approval under section 80G of the Act was that assessee had not filed application in Form 10AB within the due dates specified but only on 16.01.2024 i.e., after expiry of provisional approval period.
The learned AR, by referring to CBDT’s Circular No.7/2024 dated 25.04.2024, submitted that a fresh application in Form 10AB can be filed within the extended deadline i.e., 30.06.2024. Therefore, it was prayed that the matter may be remanded to the CIT(E) to take a decision in light of the CBDT’s Circular
ITA No.688/Bang/2024 Page 2 of 4
No.7/2024 letter dated 25.04.2024. In this context, the learned AR relied on the Order of the Bangalore Bench of the Tribunal in the case of Samyata Foundation Vs. DCIT in ITA No.657/Banga/2024 (Order dated 16.05.2024). On identical facts, the Bangalore Bench of the Tribunal had restored the matter to the CIT(E) for fresh consideration. The relevant finding of the Bangalore Bench of the Tribunal in the case of Samyata Foundation Vs. DCIT (supra) reads as follows:
“3. We have heard the rival submissions and perused the materials available on record. The ld. A.R. submitted that there was a delay in filing the application for approval u/s 12AB of the Act. However, that delay was condoned by CBDT vide Circular No.7/2024 dated 25.4.2024, wherein specifically observed as follows:
“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.” 3.1 In view of this, we remit the entire issue in dispute to the file of ld. CIT (Exemptions) for fresh consideration to decide the same in accordance with law.”
The learned DR was duly heard.
We have heard the rival submissions and perused the material on record. Assessee’s application for approval under section 80G of the Act was rejected by the CIT(E) by observing as under:
“On receipt of application in Form No.10AB dated 16.01.2024 for approval u/s.80G(5) of the Income tax Act, 1961, assessee was granted
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opportunity of being heard vide notice dated 15.03.2024, wherein the assessee was required to appear before CIT (Exemptions), either in person or through an authorized representative alongwith the documents/details. In response to the same, Assessee's Managing Trustee, Shri. Gopinath appeared alongwith Sri S Ananth, Chartered Accountant, on 26.03.2024 and discussed the case. 2. Assessee has obtained approval u/s.80G in Form 10AC dated 31.08.2021 (provisional from 31.08.2021 to A Y 2024-2025). For regularization of the provisional approval obtained u/s.80G, assessee filed application in Form No.10AB only on 16.01.2024. 3. As per proviso to Section 80G(5) of the Act, the institution/fund shall make an application for grant of approval "(iii) where the institution or fund has been provisionally approved, at least six months prior to expiry of the period of the provisional approval or within six months of commencement of its activities, whichever is earlier". According to the Section, assessee should have made the application on or before 30.09.2023. However, in the present case, assessee has made the application in Form No.10AB only on 16.01.2024. Thus the application is filed belatedly. 4. In view of the above, the application filed in Form No.10AB dated 16.01.2024 for approval u/s.80G of the Act, is hereby rejected and approval cancelled.” 5. We notice that CBDT in its Circular No.7/2024 dated 25.04.2024 had stated that if an earlier application in Form 10AB has been rejected solely for the reason of late filing, assessee may submit fresh application in Form 10AB within the extended deadline of 30.06.2024. The relevant extract of the CBDT Circular extending the due date for filing Form 10AB reads as follows:
“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.”
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In light of the aforesaid order of the Tribunal and the Board’s Circular, we restore the matter to the CIT(E) for fresh consideration of the issue.
In the result, appeal filed by the assessee is allowed for statistical purposes.
Pronounced in the open court on the date mentioned on the caption page. Sd/- Sd/- Sd/- (WASEEM AHMED) (GEORGE GEORGE K) Accountant Member Vice President Bangalore. Dated: 12.06.2024. /NS/*
Copy to: 1. Appellants 2. Respondent 3. DRP 4. CIT 5. CIT(A) 6. DR, ITAT, Bangalore. 7. Guard file By order
Assistant Registrar, ITAT, Bangalore.