ANNAI GURUVAMMAL ALAGURAJ PUBLIC CHARITABLE TRUST,SANKARAPNDIAPURAM vs. ITO (EXEMPTION), MADURAI, MADURAI

The registry has noted delay of 31 days in the appeal, the condonation of which has been sought by Ld. AR on the strength of condonation petition and affidavit of authorized signatory of the - 2 - assessee trust. Considering the period of delay, the delay is condoned and the appeal is admitted for adjudication.

From the record, it emerges that the assessee trust filed an application in Form No.10AB on 19.01.2023 seeking registration under clause (iii) of first proviso to sub-section (5) of Sec.80G. It transpired that the assessee trust was incorporated on 15.06.2020 and it commenced its activities on 05.07.2020. The assessee was granted provisions approval in Form No.10AC u/s 80G(5)(iv) for the period commencing from 10.02.2022 to AY 2024-25. The first proviso to Sec. 80G(5), provided timeline for an application to be filed under clause (iii) of first proviso to sub-section (5) of Sec.80G. As per sub-clause (iii) of this proviso, the assessee was required to file this application at least before 6 months prior to expiry of provisional approval or within 6 months from the date of commencement of its activities, whichever is earlier. The said timeline was mandatory in nature. As against this, the assessee filed application on 19.01.2023 which was much after expiry of 6 months from commencement of its activities. Accordingly, it was held by Ld. CIT(E) that the application was time barred and liable to be rejected.

It was further noted by Ld. CIT(E) that the assessee trust was an old trust continuing to exist much before commencement of new regime of registration effective from 01.04.2021 and therefore, it could seek registration under new regime in Form No.10A u/s 80G(5)(i) itself under which it would have got registration for five years. Instead, the assessee wrongly made an application in Form No.10A u/s 80G(5)(iv) and received provisional approval for 3 years.

It is admitted fact that the assessee is an old trust and it has already commenced its activities on 05.07.2020. Therefore, under new regime of registration u/s 80(G)(iii) as effective from 01.04.2021, it could not have made an application for registration within 6 months of commencement of its activities. It could further be noted that the assessee has already received provisional approval u/s 80G(5)(iv) for a period commencing from 10.02.2022 to AY 2024-25. It sought approval u/s 80G(5)(iii) by filing Form No.10AB on 25.09.2022. However, in the application, the assessee mentioned wrong sub-clause (ii) instead of sub-clause (iii). When being brought to notice, the assessee filed revised Form No.10AB under correct sub-clause (iii) on 19.01.2023 which has been rejected by Ld. CIT(E) on the ground that the assessee had violated the mandatory time lines as statutorily provided. However, it could very well be seen that the earlier application filed on 25.09.2022 is well within the extended time line. Secondly, even if assuming the date of application as 19.01.2023, 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, 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 Circular - 29 - ITA Nos.827, 875 & 1136/Chny/2023 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 assessee and agree - 5 - 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 re-deciding the issue on merits as per law. The appeal of the assessee is allowed for statistical purposes.

The appeal stand allowed for statistical purposes in terms of our above order. Order pronounced on 01-04-2024 Sd/- Sd/- (MANOMOHAN DAS) (MANOJ KUMAR AGGARWAL) �ाियक सद3 / JUDICIAL MEMBER लेखा सद3 / ACCOUNTANT MEMBER चे,ई / Chennai; िदनांक / Dated :01-04-2024 DS आदेश की Qितिलिप अ/ेिषत/Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु�त/CIT 4. �वभागीय ��त�न�ध/DR 5. गाड� फाईल/GF