SRI LAKSHMANACHARYA CHARITABLE TRUST,VILLUPURAM vs. CIT, EXEMPTIONS, CHENNAI, CHENNAI

The issue involved in all these appeals is common and hence, by way of this common order, these appeals are being disposed off. The facts and circumstances are exactly identical in all these assessees appeals.

The only issue in all these appeals of assessees is against the order of CIT(Exemption) 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’) treating the same as - 3 - & 1144/Chny/2023 & 3 others belated. For this, assessees have raised various grounds numbering 13 and all are factual or argumentative and hence, need not be reproduced.

First, we will take up ITA No.1143/CHNY/2023. Brief facts are that the assessee is old trust continuing to exist since 29.11.2019, as per the date of incorporation/registration. The assessee trust exists much before the commencement of new regime of registration and approval. The assessee trust namely Shri Lakshmanacharya Charitable Trust with PAN Number AAZTS0409C filed an application dated 01.02.2023 in Form 10AB under Rule 11AA of the Income Tax Rules, 1962 (hereinafter the ‘Rules’), seeking approval under clause (iii) of first proviso to sub-section (5) of section 80G of the Act. The CIT(Exemption) also noted that the assessee had been granted provisional approval in Form No.10AC dated 28.05.2021 u/s.80G(5)(iv) of the Act, for the period commencing 28.05.2021 to assessment year 2024-25. The assessee before CIT(Exemption) vide letter dated 20.07.2023 admitted that the date of commencement of the activities of the Trust is 29.11.2019. 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 - 4 - & 1144/Chny/2023 & 3 others 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 29.11.2019 and the date of filing of application in Form No.10AB is 01.02.2023, 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 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 - 5 - & 1144/Chny/2023 & 3 others 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 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 01.02.2023 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

- 6 - & 1144/Chny/2023 & 3 others 121), rejected the assessee’s application filed on 01.02.2023 in Form No.10AB u/s.80G(5)(iii) of the Act as not-maintainable. Aggrieved, assessee is in appeal before the Tribunal.

The ld.counsel for the assessee relied on the arguments made in lead case of M/s. Shri Ramajayam Charitable Trust vs. ITO in wherein the Tribunal has heard the matter and judgment is reserved. We have taken cognizance of judgment passed in the case of M/s. Shri Ramajayam Charitable Trust vs. ITO in ITA No.1136/CHNY/2023, wherein the order is passed on 08.03.2024 and pronounced the judgment and held that the timelines 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. Similar view is taken by the Tribunal in the case, wherein it is held 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 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 - 7 - & 1144/Chny/2023 & 3 others 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 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.

Now coming to the case of M/s. Hindu Educational Association in the trust was incorporated on 30.03.1977 and assessee filed application for obtaining provisional registration u/s.12A of the Act in Form No.10A. The CIT(Exemption) granted provisional registration u/s.80G(5) of the Act in Form no.10A on 16.02.2022. The assessee finally moved application for obtaining final registration/approval u/s.80G of the Act in Form No.10AB on 24.02.2023. The final registration was rejected by CIT(Exemption) u/s.80G of the Act on 30.08.2023. The Revenue brought out the fact that the date of commencement of activities is 30.03.1977. 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 applied provisional registration u/s.80G of the Act on 16.02.2022 and having commenced activities on 30.03.1977, the assessee could have filed application in Form No.10AB on or before 30.09.2022, which the assessee failed to do. We noted

Now coming to the case of M/s. CVMV Reddy’s Educational and Public Charitable Trust in the trust was incorporated on 22.11.2018 and assessee filed application for obtaining provisional registration u/s.12A of the Act in Form No.10A on 08.05.2021. The CIT(Exemption) granted provisional registration u/s.80G(5) of the Act in Form no.10A on 16.02.2022. The assessee finally moved application for obtaining final registration/approval u/s.80G of the Act in Form No.10AB on 02.02.2023. The final registration was rejected by CIT(Exemption) u/s.80G of the Act on 30.08.2023. The Revenue brought out the fact that the date of commencement of activities is 22.11.2018. 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 - 10 - & 1144/Chny/2023 & 3 others CIT-DR that having applied provisional registration u/s.80G of the Act on 08.05.2021 and having commenced activities on 22.11.2018, 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 appeal in the case M/s. Shri Ramajayam Charitable Trust vs. ITO in ITA No.1143/CHNY/2023, order dated 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.

Now coming to the case of M/s.Asian Foundation in the trust was incorporated on 24.03.2021 and assessee filed application for obtaining provisional registration u/s.12A of the Act in Form No.10A on 10.05.2021. The CIT(Exemption) granted provisional registration u/s.12A of the Act in Form no.10AC on 28.05.2021. The assessee moved final registration application u/s.12A of the Act in Form No.10AB on 31.03.2023 and final registration was granted u/s.12A of the Act in Form No.10AD vide dated 29.09.2023. Subsequently, the assessee finally moved application for obtaining final registration/approval u/s.80G of the Act in Form No.10AB on 31.03.2023. The final registration was rejected

Now coming to the case of M/s. Sri Vishnu Mohan Foundation in the trust was incorporated on 11.12.2008 and assessee filed application for obtaining provisional registration u/s.12A of the Act in Form No.10A on 30.05.2022. The CIT(Exemption) granted provisional registration u/s.12AC of the Act in - 12 - & 1144/Chny/2023 & 3 others Form no.10AC on 22.06.2022. Subsequently, the assessee filed application for obtaining provisional registration u/s.80G of the Act in Form No.10A on 05.07.2022 and consequently provisional registration was granted u/s.80G(5) of the Act in Form No.10A on 03.08.2022. The assessee moved final registration application u/s.12A of the Act in Form No.10AB on 12.04.2023 and final registration was granted u/s.12A of the Act in Form No.10AD vide dated 30.10.2023. The assessee finally moved application for obtaining final registration/approval u/s.80G of the Act in Form No.10AB on 20.04.2023. The final registration was rejected by CIT(Exemption) u/s.80G of the Act on 30.10.2023. The Revenue brought out the fact that the date of commencement of activities is 05.11.2008. 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 applied provisional registration u/s.80G of the Act on 03.08.2022 and having commenced activities on 05.11.2008, 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 appeal in the case M/s. Shri Ramajayam Charitable Trust vs. ITO in ITA No.1143/CHNY/2023, order dated 08.03.2024 and facts being identical, we set aside the - 13 - & 1144/Chny/2023 & 3 others 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 appeals filed by the assessees in 1144, 1146, 1230 & 1455/CHNY/2023 are allowed for statistical purposes.