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Income Tax Appellate Tribunal, JAIPUR BENCHES,”A” JAIPUR
Before: SHRI SANDEEP GOSAIN, JM & DR MITHA LAL MEENA, AM vk;djvihy la-@ITA No. 652/JP/2023
ORDER PER: SANDEEP GOSAIN, JM This appeal is filed by the assessee against order of the Ld.CIT (Exemption), Jaipur dated 31-08-2023 passed under section 80G of the Income Tax Act, 1961 wherein the grounds appeal raised by the assessee are as under:- ‘’1.Under the facts and circumstances of the case and in law the ld. CIT(E) has erred in denying the approval to the assessee u/s 80G of the Act.
Under the facts and circumstances of the case and in law the ld. CIT(E) has erred in rejecting the application of approval u/s 80G of the 2 DARIDRA NARAYAN SEWA TRUST VS CIT (E), JAIPUR Income Tax Act, such action being unlawful as well as against the concept of natural justice, hence the order passed by ld. CIT(E) deserves to be quashed.
Under the facts and circumstances of the case and in law the ld. CIT(E) even after granting registration u/s 12AB denied to allow the approval u/s 80G of the Income Tax Act, 1961, hence, the said denial being invalid in law deserves to be quashed. 2.1 Apropos Ground No. 1 to 3 of the assessee trust, the facts as emerges from the order of the ld. CIT(E) are as under:- On Perusal of above reply it is observed that the assessee itself has admitted that Form No.10AB could not be submitted on time and activity of the trust was commenced on 05.08.2021 itself, Further, the applicant has falled to justify the delay of more than six months Between commencement of activities and in filing of application for regularisation of provisional registration. Therefore, as discussed in length above, it is concluded that the applicant has begun its activities from F.Y. 2021-22 itself and the present application filed in Form No.10AB clause (iii) of first proviso to sub-section (5) of sec. 80Gof the Act has not been filed within the time limit prescribed therein and therefore the same is liable to be rejected as such as non-maintainable. Reliance is also placed on the decision of the Hon'ble Kolkata Tribonat in the case of Bishnupur Public Education Institute, reported in 139 taxmann.com 121, wherein the Hon'ble Tribunal while adjudicating the issue of similar provisions of due date uls 10(230) of the Act, after placing reliance on various decisions of the Hon'ble Supreme Court and that of Hon'ble High Court has held as under:- ‘’5. The Hon'ble Madras High Court in the case of All Angels Educational Society (supra) while considering the issue whether the id. CIT (Exemption) has power to condone the delay in filing application for grant of approval under section 10(23C) or not, has considered the judgments of Hon'ble Supreme Court in the case of State of UP v. Harish Chandra AIR 1996 SC 2173 as well as Union 3 DARIDRA NARAYAN SEWA TRUST VS CIT (E), JAIPUR of India v. Kirloskar Pneumatic Co. Ltd. 1996 taxmann.com 575 (SC) and held that where there is no provision to empower the statutory authority to condone the delay, than the authority cannot condoned. The finding of the Hon'ble Court in Paragraphs no. 15 & 16 worth to note, which read as under- "15. However, considering the legal position that there is no power to condone the delay in filling an application under section 10(230) of the Act, this Court is not inclined to exercise its extraordinary jurisdiction to condone the delay, However, this Court is inclined to give appropriate direction to the respondent to consider the petitioner's application as an application for the subsequent assessment year, namely, 2013-2014 in accordance with law. Such direction is issued considering the peculiar facts and circumstances of the case and that the petitioner could not have made an application for the subsequent assessment year 2013-2014, since their application for assessment year 2012-2013 was still pending consideration and the impugned order came to be passed only on 13-11-2013. The respondent is at liberty to consider the amended objectives of the petitioner Trust.
Accordingly, the writ petition is partly allowed and the finding rendered by the respondent that the petitioner's application cannot be considered as the same is time barred is affirmed and the finding with regard to objectives of the Society by respondent holding that the Society cannot be said to be solely for education purpose is set aside. Consequently, the matter is remanded back to the respondent for fresh consideration and the petitioner's application is directed to be considered for the assessment year 2013-2014 in accordance with law and while doing so, may consider the amendments made to the objectives of the petitioner Trust. No Costs. M.P. No. 1 of 2014 is closed"
Similar is the view of Hon'ble Andhra Pradesh High Court propounded in Aurora Educational Society case (supra). The Hon'ble Orissa High Court has also considered this aspect in the case of Roland Educational & Charitable Trust (supra). The concluding paragraph of the judgment is worth to note in this aspect, which read as under- 4 DARIDRA NARAYAN SEWA TRUST VS CIT (E), JAIPUR "Be that as it may, we are here concerned whether in the absence of any statutory provision to condone the delay in presenting the application under section 10/230)(V), the Chief Commissioner of Income-tax can exercise any such power 7. The adjudicating authorities under the Income-tax Act are quasi-judicial authorities They can grant approval with retrospective effect if such mechanism is provided in the Act. There is no such provision nor there is any power to condone the delay after considering the reasonable reasons. A reasonable cause can be taken into cognizance for condoning the delay, if such provision is provided in the Act while considering any issue for adjudication. Therefore, considering the above proposition, we are of the view that Id. CIT (Exemption) has rightly rejected the application of the assessee for grant of approval under section 10(23C)(iv ) of the Income-tax Act. All these three appeals are rejected.
In the result, all the appeals of the assesses are dismissed." 2.5 In view of the above, the present application filed in Form No. 10AB under clause (iii) of first proviso to sub- section (5) of sec. 80Gof the Act is liable to be rejected as non- maintainable.
3. In view of above discussion assessee's claim of approval for exemption under section 80G is liable to be rejected and thus being rejected on following grounds: - Commencement of activities.
2.2 During the course of hearing the ld. AR of the assessee has filed a detailed written submission dated 15th Feb.2024 containing10 pages and paper book containing 17 pages and further submitted that the issue raised by him is covered by the decision of ITAT Ahemdabad Bench in the case 5 DARIDRA NARAYAN SEWA TRUST VS CIT (E), JAIPUR of Buds Pet Care vs CIT(E) (ITA No. 731/Ahd/2023 dated 30-11-2023. He further submitted that case of the assessee is covered in the extended time limit as provided in Circular 6 of 2023 dated 24-05-2023 and thus conclusively prayed that application for registration/s 80G(5) may kindly be allowed setting aside the order of the ld. CIT(E) dated 31-08-2023. 2.3 On the other hand, the ld. DR strongly supported the order of the ld. CIT(E). 2.4 We have heard both the parties and perused the order of the ld. CIT(A) and also the submissions advanced by the ld. AR of the assessee vide written submission, paper book and also the decision of ITAT Ahemdad Bench (supra). The Bench noticed that the ITAT Ahemdabd Bench in the case of Buds Pet Care vs CIT(E) (ITA No. 731/Ahd/2023 dated 30-11-2023 has restored the matter to the file of the ld. CIT(E) for afresh adjudication by observing as under:- ‘’6. We have given our thoughtful consideration and perused the material available on record. It is undisputed fact that the Trust was created on 29-04-2021 and Final registration u/s. 12A(i) of the Act was granted to the Assessee Trust vide order dated 17-09-2022 for the assessment years 2022-23 to 2024-25. Similarly. Provisional registration u/s. 80G was granted on 01-10- 2021 However, the assessee failed to file final registration under 80G(5) within six months period. It is further seen from the affidavits filed by the Trustee and the Accountant, that they were in the bonafide wrong impression that the Provisional Registration granted u/s. 80G(5) on 01-10-2021 is the sufficient registration and not aware of the Final Registration which is required to be applied within six months of the provisional registration or six 6 DARIDRA NARAYAN SEWA TRUST VS CIT (E), JAIPUR months of the commencement of the activities of the Trust. It is only when the assessee trust approached their Chartered Accountant, the assessee trust realized the mistake and filed the same in Form 10AB for final registration u/s. 80G(5) of the Act on 28-02-2023 6.1 For better understanding, section 80G(5)(3) of the Act reads as follows:- "(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;" 6.2 Reading of the above sub-section makes it clear that there is no provision to condone the delay in Registration of the Trust. However, the CBDT has extended the above time limits by invoking section 119 of the Act by issuing circular No. 8 of 2022, dated 31- 03-2022 extending the time limit upto 30th September, 2022. It is thereafter by circular No. 6 of 2023 dated 24-05-2023 clarified as follows:- 7. It may be also noted that the extension of due date as mentioned in paragraph 5(i) shall also apply in case of all pending applications under clause (iii) of the first proviso to clause (23C) of section 10 or sub-clause (iii) of clause (ac) of sub-section (1) of section 12A of the Act, as the case may be Hence, in cases where the trust has already made an application in Form Ho. 10AB under the said provisions but such application has been furnished after 30.09.2022 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. Further, in cases where the trust had 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 fid that the application wah furnished after the due date, the tn the may furnish a fresh application in Form No 10AB win the extended time provided in paragraph 5(i) ie. 30.09 2023.’’ However, this clause (7) was not referred by the CITIE) in his order while rejecting the registration u/a. 80G of the Act to the assessee 7 DARIDRA NARAYAN SEWA TRUST VS CIT (E), JAIPUR on the sole ground that he has no power to condone the delay of belated filing of Form no. 10AB u/s. 800(5) of the Act. 6.3 Reading of the above circular makes it clear that the time is extended up till 30-09-2023, whereas the assessee filed belated application on 28-02-2023. The above circular also clarified that even in case, where the application in Form No. 10AB was rejected by the CIT(E) on or before issuance of this circular dated 24-05- 2023, the assessee trust can make fresh application in Form 10AB on or before 30- 09-2023. Thus, the Id. CIT(E) has not considered the clause 7 of the Circular no. 6 of 2023 thereby rejected the application which is in our considered view is against the circular issued by the CBDT. Therefore, we hereby set aside the impugned order passed by CIT(E) with a direction to reconsider the From No. 10AB for final registration u/s. 80G of the Act by giving proper opportunity of being heard to the assessee trust. Needless to say the assessee trust should co-operate by furnishing all the required details as mandated under the law for granting final registration u/s. 80G of the Act. 7 In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 30-11-2023’’ Hence, the Bench respectfully following the order of the ITAT Ahemdabd Bench (supra) restores the matter to the file of the ld. CIT(E) for final registration u/s 80G of the Act by giving proper opportunity of being heard to the assessee trust. The assessee is directed to produce all the relevant paper before the ld.CIT(E) as mentioned hereinabove to settle the dispute in question. 2.5 Before parting, we may make it clear that our decision to restore the matter back to the file of the ld. CIT(E) shall in no way be construed as having any 8 ITA NO. 652/JP/2023 DARIDRA NARAYAN SEWA TRUST VS CIT (E), JAIPUR reflection or expression on the merits of the dispute, which shall be adjudicated by the ld. CIT(E) independently in accordance with law.
3.0 In the result, the appeal of the assessee are allowed for statistical purposes. Order pronounced in the open court on 08 /05/2024. Sd/- Sd/- ¼ Mk0 ehBk yky ehuk ½ ¼lanhi xkslkbZ½ (Dr. Mitha Lal Meena) (Sandeep Gosain) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 08 /05/2024 Mishra आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू The Appellant- Shri Daridra Narayan Sewa Trust, Jaipur 1. 2. izR;FkhZ@ The Respondent- CIT(E), Jaipur. 3. vk;dj vk;qDr@ The ld CIT 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZQkbZy@ Guard File ( )