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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGHAND SHRI MANOJ KUMAR AGGARWAL
PER MAHAVIR SINGH, VICE PRESIDENT: These appeals by the assessee are arising out of the different orders of the Commissioner of Income Tax (Exemption), Chennai of even date 30.04.2023 / 29.04.2023, rejecting Form No.10AB filed for seeking approval under clause (iii) of first proviso to section 80G(5) of the Income Tax Act, 1961 (hereinafter the ‘Act’). The issue involved in all these appeals is common and hence, by way of this common order, these appeals are being disposed off.
At the outset, it is noticed that these appeals of assessees are time barred by 275 / 277 days. It is noticed that the orders of CIT(A) are dated 29.04.2023 / 30.04.2023 and the assessees in its condonation petition also admitted to have received the order of CIT(A) on the same day. Therefore, the last date of filing of appeals expired on 27.06.2023 / 28.06.2023 but assessees filed appeals before Tribunal on 01.04.2024. Thereby, there is a delay of 275 / 277 days. The assessees have stated the following common reason for delay in its condonation petition:- “On receipt of Commissioner of Income Tax(Exemption) order, we were getting ourselves prepared to file an appeal, meanwhile, there was a Circular No.6 of 2023 issued by CBDT dated 24.05.2023, wherein dates were extended to file Form No.10AB for Regular Registration u/s.12AB.
- 3 - ITA No.865 to 868/Chny/2024 The same was filed and the Regular Registration u/s.12AB was obtained vide Form No.10AD issued by the Commissioner of Income Tax (Exemption) dated 23.02.2024 and only after such registration obtained, the Appellant realized that the appeal was not filed for Regular Approval u/s 80G. Immediately, the Appellant paid the appellate fees on 26.03.2024 and prepared the appeal papers. The Appellant had taken copies of the enclosures, signed the appeal papers and filed the appeal before this Honourable Tribunal on 27.03.2024.”
When this was confronted to ld. CIT-DR, he could not controvert the above fact situation. In view of the reasons stated in the assessees condonation petition (reproduced above), we are of the view that the reason stated is reasonable and there is sufficient cause by virtue of which, delay happened. Hence, we condone the delay and admit the appeals.
The only issue in all these appeals of assessees is against the order of CIT(Exemption) refusing recognition / registration under clause (iii) of first proviso to section 80G(5) of the Act by holding that the application filed in Form No.10AB was barred by limitation. For this, assessees have raised various grounds which are factual and argumentative and hence, need not be reproduced.
The grounds raised by assessees in all these four appeals are identically worded and facts and circumstances are exactly identical
- 4 - ITA No.865 to 868/Chny/2024 and hence, will take the facts from ITA No.865/CHNY/2024 in the case of M/s.KC & MSM Charitable Trust.
Brief facts are that the assessee trust filed an application in Form No.10AB on 06.10.2022 seeking approval under clause (iii) of first proviso to section 80G(5) of the Act. The assessee is provisionally approved u/s.80G(5)(iii) of the Act and therefore, assessee was required to file application in Form No.10AB u/s.80G(5)(iii) of the Act within the time period of six months prior to the expiry of period of the provisional approval or within six months of commencement of its activities whichever is earlier. In the present case, the assessee filed application in Form No.10AB on 06.10.2022 whereas the date of commencement of its activities is 03.04.2021 and hence, application filed is after expiry of six months from commencement of its activities. Therefore, the CIT(A) rejected the assessees application by giving identical finding in all these four appeals and the finding given by the CIT(A) in these four appeals reads as under:- “11. On careful consideration of the above facts in the light of judicial pronouncements cited above, the applicant’s present application filed on 06.10.2022 / 07.10.2022 in Form No.10AB u/s 80G(5)(iii) of the Act is rejected as non maintainable.”
- 5 - ITA No.865 to 868/Chny/2024 Aggrieved against rejection of assessees applications filed in Form No.10AB u/s.80G(5) of the Act dated 06.10.2022/07.10.2022 as ‘non maintainable’, the assessees came in appeal before the Tribunal.
We have heard rival contentions and gone through facts and circumstances of the case. We find that this issue now stands covered by the Co-ordinate Bench decision in the case of Teddy Trust in ITA No.1315/Chny/2023, order dated 10.04.2024, wherein the Tribunal has considered the entire factum and also considered the decision of Hon’ble Madras High Court in the case of Sri Nrisimha Priya Charitable Trust in WP Nos.27030 & ors. of 2024, order dated 02.04.2024 and held as under:- 5. It is admitted fact that the assessee is an old trust and it has already commenced its activities on 17.01.1992. It could further be noted that the assessee has already received provisional approval u/s 80G(5)(iv) for a period commencing from 21.10.2022 to AY 2025-26. It sought approval u/s 80G(5)(iii) by filing Form No.10AB on 30.03.2023 which has been rejected by Ld. CIT(E) on the ground that the assessee had violated the mandatory time lines as statutorily provided. However, we find that this issue has been decided by co-ordinate bench in bunch of appeals titled as M/s CIT-1982 Charitable Trust & Ors, ITA No.827/Chny/2023 order dated 08.03.2024 as under: -
7.8 After hearing the arguments of ld. counsel for the assessee and ld. CIT-DR as noted above, we find from the facts that the timeline prescribed for filing Form No.10AB for registration u/s.12A of the Act in the case of assessee trust has been extended up-to 30.09.2023 after considering the genuine hardship faced by charitable institutions vide various CBDT circulars and finally, vide
- 6 - ITA No.865 to 868/Chny/2024 Circular No.6/2023 dated 24.05.2023. Similarly, the timeline prescribed for filing Form No.10A for recognition u/s.80G of the Act was also extended up-to 30.09.2023 by the same circular for trusts filing registration under clause (i) to first proviso to section 80G(5) of the Act. But the above extension was not extended beyond 30.09.2022, unlike other forms which were extended up to 30.09.2023 to the disputed forms namely Form No.10AB for renewal of recognition u/s.80G(5) of the Act under clause (iii) of the first proviso to section 80G(5) of the Act. Once, the CBDT has extended the timeline for filing Form No.10AB for recognition u/s.12A of the Act and also for filing Form No.10A for recognition u/s.80G of the Act extended up to 30.09.2023 for trusts filing registration under clause (i) of first proviso to section 80G(5) of the Act, we find no difference in continuing hardship as recognized by CBDT even in filing Form No.10AB for renewal of recognition u/s.80G of the Act under clause (iii) of first proviso to section 80G(5) of the Act. In our view, this being a genuine hardship case, which is recognized by Revenue or CBDT by issuing a general circular, we are of the view that this specific provision of clause (iii) to first proviso to section 80G(5) cannot be excluded and or it has not been the intention of the CBDT while issuing the circular. There cannot be a distinction within the same provision without bringing out any exception and even this provision is for the benefit of the donors who are donating money to the charitable trusts for claiming exemption in their returns of income. In our view, we agree with the argument of ld. counsel for the assessee that the timeline prescribed under clause (iii) of first proviso to section 80G(5) of the Act should be treated as directory and not mandatory especially considering the transitional nature of the amendment as brought out by the taxation of other laws (relaxation and amendment of certain provisions) act 2020 for bringing new regime. Hence, in our view, the CIT(Exemptions) should not have rejected the assessee’s application in Form No.10AB only for this technical reason. We are of the view that the intention of CBDT in its circular clearly reflects their mind that once the timeline prescribed for filing Form No.10AB for recognition u/s.12A of the Act has been extended up to 30.09.2023, the same may be treated as extended for forms namely Form No.10AB for renewal of approval/recognition/registration under clause (iii) of first proviso to section 80G of the Act also. Hence, we accept the plea of
- 7 - ITA No.865 to 868/Chny/2024 assessee and agree with the arguments of ld. counsel for the assessee and remand the matter back to the file of the CIT(Exemption) to decide the issue on merits. Hence, the order of CIT(Exemption) on this issue is set aside and matter is remanded back to the file of the CIT(Exemption) for redeciding the issue on merits as per law. The appeal of the assessee is allowed for statistical purposes.
The bench thus held that the extended time limit of 30.09.2023 as per CBDT Circular would apply to Form No.10AB as well.
The bench also takes note of the latest decision of Hon’ble High Court of Madras in the case of Sri Nrisimha Priya Charitable Trust in WP Nos.27030 & ors. of 2024 order dated 02.04.2024 wherein Hon’ble Court has held that clause 5(ii) of Circular No.6 of 2023 dated 24.05.2023 is illegitimate, arbitrary and ultra vires the constitution of India. It has been held as under: -
In the result, these Writ Petitions are allowed on the following terms: - (i) The clause 5(ii) of Circular No.6 of 2023 bearing F.No.370133/06/2023-TPL, dated 24.05.2023 of the first respondent is declared as illegitimate, arbitrary, and ultra vires the Constitution of India;
(ii) The respondents are directed to consider the applications submitted by the petitioners as to the recognition/approval in respect of clause (i) of the first proviso to sub-section (5) of section 80G of the Act as within time and consider the same and pass orders thereon on merits, in accordance with law within six months from the date of receipt of a copy of this order;
Respectfully following the same, we set aside the impugned order and direct Ld. CIT(E) to consider the application on merits without raising the issue of timeline.
We further noted that the CBDT has extended the due date for filing of Form No.10A / 10AB till 30.06.2024 vide Notification F.No.173/25/ 2024-ITA-I, Circular No.7/2024 dated 25th April, 2024.
- 8 - ITA No.865 to 868/Chny/2024 In view of the above, we set aside the orders of CIT(E) and remand the matter back to his file for fresh adjudication on merits. In term of the above, the appeals of the assessees are allowed for statistical purposes.
In the result, the appeals filed by the assessees in ITA Nos.865, 866, 867 & 868/CHNY/2024 are allowed for statistical purposes.
Order pronounced in the open court at the time of hearing on 24th June, 2024 at Chennai.
Sd/- Sd/- (महावीर �सह ) (मनोज कुमार अ�वाल) (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) उपा�य� /VICE PRESIDENT लेखा सद�य/ACCOUNTANT MEMBER चे�ई/Chennai, �दनांक/Dated, the 24th June, 2024 RSR आदेश क� �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु� /CIT, Chennai/Madurai 4. िवभागीय �ितिनिध/DR 5. गाड� फाईल/GF.