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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGHAND SHRI S.R. RAGHUNATHA
आदेश /O R D E R
PER MAHAVIR SINGH, VICE PRESIDENT:
This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Exemption), Chennai rejecting Form No.10AB dated 20.03.2023 filed for seeking approval under clause (iii) of first proviso to section 80G(5) of the Income Tax Act, 1961 (hereinafter the ‘Act’) vide order dated 25.09.2023.
At the outset, it is noticed that this appeal is barred by limitation by 32 days. The assessee has filed condonation petition for condonation of delay supported with affidavit. The order of CIT(Exemption) is dated 25.09.2023 and as per Form No.36, the date of communication of order is also mentioned as 25.09.2023. The appeal was filed by assessee in Tribunal on 26.12.2023, thereby there is a delay of 32 days. The assessee contended in its petition for condonation of delay that the last date for filing of appeal before Tribunal fell on 24.11.2023 however, this could not be filed due to various complexities in understanding the further course of action against the rejection order as well as understanding the scope of the circular issued by CBDT dated 24.05.2023. The assessee through Chartered Accountant approached the counsel on record seeking professional advice who advised the trustee to file an appeal before the Tribunal. The assessee stated that the legal complexity surrounding the registration of Trust under 80G and lack of understanding of the judicial remedies constituted to the delay of 32 days. The ld.counsel for the assessee contended that the cause is reasonable and the small delay of 32 days may be condoned. On the other hand, the ld.Senior DR opposed condonation of delay.
- 3 - 2.1 After hearing rival contentions and going through the reasons stated in the petition and arguments made by ld.counsel, we are inclined to accept the cause as reasonable and hence, condone the delay and admit the appeal.
The only issue in this appeal of assessee is against the order of CIT(Exemption) rejecting Form No.10AB dated 20.03.2023 filed for seeking approval under clause (iii) of first proviso to section 80G(5) of the Act, treating the same as belated. For this, assessee has raised various grounds numbering 15 and all are factual or argumentative and hence, need not be reproduced.
Brief facts of the case are that the assessee trust was incorporated on 12.08.2020 and granted provisional registration u/s.12A of the Act in Form No.10AC on 31.08.2021 u/s.80G(5)(iv) for the period 31.08.2021 to assessment year 2024-25. The assessee filed application dated 20.03.2023 in Form 10AB under Rule 11AA of the Income Tax Rules, 1962 seeking approval under clause (iii) of first proviso to sub-section (5) of section 80G of the Act. The final registration was rejected by CIT(Exemption) u/s.80G of the Act on 25.09.2023 as ‘non maintainable’ for the reason that the application is belated one. The assessee before CIT(Exemption)
- 4 - vide letter dated 10.08.2023 admitted that the date of commencement of the activities of the Trust is 26.1.2020. The CIT(Exemption) noted that as per the provisions of section 80G(5) of the Act, various time limit has been prescribed within which the assessee is required to file application for approval, depending upon the various categories of trusts/institutions mentioned therein. He noted the fact that in the present case, the assessee is provisionally approved u/s.80G(5)(iv) of the Act and therefore, the 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 expiry of period of the provisional approval or within six months of commencement of its activities, whichever is earlier. From the provisions of section 80G(5)(iii) of the Act, the CIT(Exemption) noted that the time limit prescribed therein is mandatory and the CIT(Exemption) has no power to condone the delay in filing application in Form No.10AB. He noted that in the present case, the date of commencement of its activities is 26.10.2020 and the date of filing of application in Form No.10AB is 20.03.2023, which is after expiry of six months of commencement of its activities. The CIT(Exemption) further noted that with the advent of new regime of registration of trusts/institutions seeking registration under the Act, the CBDT on - 5 - multiple occasions had extended time line in filing the application in Form No.10A or Form No.10AB as under:- Sl . CBDT Circular Extension upto 1 No.12 of 2021 dated 25-06-2021 31-08-2021 2 No.16 of 2021 dated 29-08-2021 31-03-2022 3 No.08 of 2022 dated 31-03-2022 30-09-2022 4.1 From the above, the CIT(Exemption) noted that CBDT vide Circular No.6 of 2023 dated 24.05.2023 extended the due date for filing of applications in Form No.10AB to 30.09.2022 to 30.09.2023 only in respect of trusts/institutions registered u/s.10(23C) & 12AB of the Act. He noted that this circular did not mention any such extension of due date for filing of Form No.10AB to get approval u/s.80G of the Act. He also noted that on earlier occasions, even vide Circular No.8 of 2022 dated 31.03.2022, the assessee whose last date for filing Form No.10AB for registration u/s.10(23C)/12A/80G was falling on or before 29.09.2022 was extended upto 30.09.2022 but thereafter, there was no further extension for delay in filing Form No.10AB by CBDT and the same is evident from CBDT Circular No.22/2022 dated 01.11.2022 through which the CBDT extended the time limit for filing of application in Form No.10A under various sections made therein up to 25.11.2022. But in the said Circular No.22/2022, no further extension of time was granted for filing of Form No.10AB. Hence, he noted that since
- 6 - the said circular did not mention any such extension of due date for filing of Form No.10AB to get approval u/s.80G of the Act, the application filed by the assessee trust on 20.03.2023 is treated as time barred and invalid one, as the same was not filed within the due date. Hence, the CIT(Exemption) considering the decision of Co-ordinate Bench, of Kolkata Tribunal in the case of Bishnupur Public Education Institute in ITA Nos.585 to 587/Kol/2020, order dated 20.04.2022 (reported in 139 taxman.com 121), rejected the assessee’s application filed on 20.03.2023 in Form No.10AB u/s.80G(5)(iii) of the Act as not-maintainable. Aggrieved, assessee is in appeal before the Tribunal.
The Revenue brought out the fact that the date of commencement of activities is 26.10.2020. According to Revenue, the assessee is covered by the extended date of 30.09.2022, extended by CBDT and not eligible for final registration u/s.80G and the CIT(Exemption) has rightly rejected the approval. It was argued by CIT-DR that having commenced activities on 26.10.2020, the assessee could have filed application in Form No.10AB on or before 30.09.2022, which the assessee failed to do. We noted that all these aspects are dealt with in the case of Shri Ramajayam Charitable Trust vs. ITO in order dated
- 7 - 08.03.2024 and facts being identical, we set aside the order of CIT(Exemption) on the same reason and remand the matter back to the file of the CIT(Exemption) for deciding the issue on merits as per law. The appeal of the assessee is allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court at the time of hearing on 18th April, 2024 at Chennai.