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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGHAND SHRI MANOJ KUMAR AGGARWAL
आदेश /O R D E R
PER MAHAVIR SINGH, VICE PRESIDENT:
These two appeals by the assessee are arising out of the respective orders of the Commissioner of Income Tax (Exemption), Chennai rejecting Form No.10AB dated 28.09.2022 & 07.03.2023 filed for seeking approval under clause (ii) & (iii) of first proviso to section 80G(5) of the Income Tax Act, 1961 (hereinafter the ‘Act’) vide orders dated 06.03.2023 & 25.09.2023 respectively.
- 2 - ITA Nos.1535 & 1536/Chny/2023 2. At the outset, the ld.counsel for the assessee stated that for rejection of approval by CIT(Exemption), vide order dated 06.03.2023 on an application filed by assessee online on 28.09.2022 in Form No.10AB under clause (ii) of first proviso to Section 80G(5) of the Act is not maintainable because the assessee has erroneously filed the present application under clause (ii) of first proviso to section 80G(5) of the Act instead of clause (iii). The ld.counsel stated that this appeal is time barred by 229 days and assessee has filed condonation application supported by affidavit. He also informed during the course of hearing that the assessee has moved application dated 07.03.2023 in Form No.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, which was rejected by the CIT(Exemption) vide order dated 25.09.2023. For both the rejections, the assessee has filed appeals and he is pursuing appeal filed against the order of CIT(Exemption) dated 25.09.2023 instead of appeal filed against the order of CIT(Exemption) dated 06.03.2023, which is barred by limitation by 229 days. The ld.counsel stated that the appeal filed against the order dated 06.03.2023 in ITA No.1535/CHNY/2023 can be dismissed as infructuous. The ld.Senior DR has not objected to the same.
- 3 - ITA Nos.1535 & 1536/Chny/2023 Hence, the appeal filed in ITA No.1535/CHNY/2023 is dismissed as infructuous.
We find that the appeal in ITA No.1536/CHNY/2023 filed by assessee against the order of CIT(Exemption) dated 25.09.2023, is delayed by 26 days and assessee in its condonation petition supported by affidavit stated reasonable cause that the assessee was under advice from counsel and on an understanding that only a writ remedy was available and hence, it was decided to file writ petition before the Hon’ble High Court of Madras. In the mean time, another professional advice, who is the counsel on record, that appeal remedy was the property route and on his advice, appeal was filed instead of writ petition. The reason stated by assessee and now canvassed before us by the ld.counsel, we feel that cause seems reasonable and delay of 26 days is very small. When these facts were pointed out to ld. Senior DR, he could not controvert the above fact situation. Considering the reason stated and the fact that the ld.Senior DR could not controvert the same, we condone the delay and admit the appeal.
The only issue in this appeal is against the order of CIT(Exemption) dated 25.09.2023 rejecting the registration or
- 4 - ITA Nos.1535 & 1536/Chny/2023 approval claimed by filing an application dated 07.03.2023 filed in Form No.10AB under Rule 11AA of the Rules, seeking approval under clause (iii) of first proviso to sub-section (5) of section 80G of the Act.
Brief facts are that the assessee is old trust continuing to exist since 15.07.2019, 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 Sumunum Foundation with PAN Number AAYTS2827F filed an application dated 07.03.2023 in Form 10AB under Rule 11AA of 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 29.03.2022 u/s.80G(5)(iv) of the Act, for the period commencing 29.03.2022 to assessment year 2024-25. The assessee before CIT(Exemption) vide letter dated 19.08.2023 admitted that the date of commencement of the activities of the Trust is 15.07.2019. 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 trusts/institutions mentioned therein. He
- 5 - ITA Nos.1535 & 1536/Chny/2023 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 15.07.2019 and the date of filing of application in Form No.10AB is 07.03.2023, 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 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
5.1 From the above, the CIT(Exemption) noted that CBDT vide Circular No.6 of 2023 dated 24.05.2023 extended the due date for
- 6 - ITA Nos.1535 & 1536/Chny/2023 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 07.03.2023 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
- 7 - ITA Nos.1535 & 1536/Chny/2023 121), rejected the assessee’s application filed on 07.03.2023 in Form No.10AB u/s.80G(5)(iii) of the Act as not-maintainable. Aggrieved, assessee is in appeal before the Tribunal.
The ld.counsel for the assessee relied on the case law of M/s. Shri Ramajayam Charitable Trust vs. ITO in ITA No.1136/CHNY/2023, wherein the Tribunal vide order dated 08.03.2024 has 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 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
- 8 - ITA Nos.1535 & 1536/Chny/2023 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.
Respectfully following the same, we set aside the order of CIT(Exemption) and remand the matter back to his file to decide the
- 9 - ITA Nos.1535 & 1536/Chny/2023 issue on merits. This appeal of the assessee is allowed for statistical purposes.
In the result, the appeals filed by the assessee in ITA No.1535/CHNY/2023 is dismissed and ITA No.1536/CHNY/2023 is allowed for statistical purposes.
Order pronounced in the open court at the time of hearing on 13th March, 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 13th March, 2024 RSR आदेश क� �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु� /CIT 4. िवभागीय �ितिनिध/DR 5. गाड� फाईल/GF.