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Income Tax Appellate Tribunal, “B” BENCH KOLKATA
Before: SHRI SANJAY GARG & SHRI RAKESH MISHRA
Present for: Appellant by : Shri Giridhar Dhelia, Advocate Respondent by : Shri Abhijit Kundu, CIT, DR Date of Hearing : 17.04.2024 Date of Pronouncement : 22.04.2024 O R D E R
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of Ld. Commissioner of Income Tax (Exemption), Kolkata (hereinafter referred to as “the Ld. CIT(E)” vide DIN & Notice No. ITBA/EXM/F/EXM45/2023-24/1058023878(1) dated 17.11.2023 rejecting the application filed for approval u/s. 80G(5) of the Act.
2. At the outset, it is observed that this appeal of the assessee is delayed by 19 days for which the assessee has filed an affidavit sworn by Shri Ashok Purohit, son of Late Badri Narayan Purohit, President of the assessee society praying for condonation of delay which is reproduced as under:
2 Concern For Calcutta. “1. That an application for registration under section 80G(5) of the Act in terms of the requirement of the amended Act was filed by the Assessee Trust on 16/05/2023.
That the said application for registration under section 80G(5) of the Act was rejected by Ld. CIT(Exemption), Kolkata on technical grounds under an Order in Form 10AD dated 17/11/2023.
3. That the said order was served on the portal of Income Tax Department on 17/11/2023 and an appeal against the same was due to be filed within a period of 60 days i.e. upto 15/01/2024 as per the provisions of the income Tax Act.
That on and around the period of December, 2023 to January, 2024 myself Ashok Purohit who was aware about the facts in the matter and looking after Income Tax matter for the Assessee Trust was having ill health and therefore could not be able to consult with the tax consultant on time to prepare this appeal for filing before Hon'ble ITAT, which resulted in delay in filing as per statutory timeline.
In view of the above facts I on behalf of the Assessee Trust submit that the delay was unintentional, for bonafide reasons.
6. That I on behalf of the Assessee Trust, I hereby pray for condonation of delay in the interest of justice, more so when the appellant has a good case on merits.
7. I am making this affidavit to bring the correct facts on records which are true to the best of my knowledge and I believe it to be true.”
Along with the application, a certificate dated 15.12.2023 of Dr. Sankha Santra, BDS has also been enclosed. Since there is justification for the delay in filing the appeal, the delay is hereby condoned for adjudicating the appeal on merits.
4. Grounds of appeal raised by the assessee are reproduced as under:
“1) For that on the facts and circumstances of the case, Ld. CIT (Exemption) was grossly erred in rejecting the application filed for approval u/s 80G(5) of the Act (post amendment). 2) For that on the facts and circumstances of the case, the order of Ld. CIT (Exemption) rejecting the application filed for approval u/s 80G(5) is highly arbitrary, unjustified and unwarranted to the facts of the case. 3) For that on the facts and circumstances of the case, Ld. CIT (Exemption) was grossly erred in ignoring the existing registration of the assessee under section 3 Concern For Calcutta. 80G(5) of the Act (before amendment) rejecting the application filed for approval u/s 80G(5) of the Act (post amendment). 4) For that on the facts and circumstances of the case, Ld. CIT (Exemption) was grossly erred in ignoring the fact that the online application on IT portal did not provide an option for rectification of the proper clause under section 80G(5) in case of mistake happened and inadvertently wrong clause choose by the assessee. 5) For that on the facts and circumstances of the case, Ld. CIT (Exemption) was grossly erred in rejecting the application of assessee only on account of technical error in choosing the proper clause under section 80G(5) of the Act and has not considered the application on merit at all which is improper. 6) For that on the facts and circumstances of the case, Ld. CIT (Exemption) be directed to consider the application u/s 80G(5) afresh considering the application for approval dated 16/05/2023 as filed under clause (i) of the second proviso to section 80G(5) of the Act. 7) For that on the facts and circumstances of the case the rejection order dated 17/11/2023 passed Ld. CIT (Exemption) is without according proper opportunity of hearing to the appellant, therefore, the same was passed in violation of Principles of Natural Justice and hence the said order be quashed and/or set aside. 8) The appellant craves leave to produce additional evidences in terms of Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963. 9) The appellant craves leave to press new, additional grounds of appeal or modify, withdraw any of the above grounds at the time of hearing of the appeal.”
5. Brief facts of the case are that the assessee is an old society and was granted certificate of registration of societies under the West Bengal Societies Registration Act of XXVI of 1961 by the Asstt. Registrar of Firms, Societies & Non-Trading Organisations, West Bengal vide No. S/46999 of 1984-1985 on 17.12.1984 and was also initially granted registration by the CIT, WB-VII, Kolkata vide letter No. Assmnt./422/8E/23/87-88/CT dated 08.04.1988/24.06.88. Subsequently, vide letter dated 27.09.2011, the approval granted u/s. 80G(5)(vi) vide office order No. DIT(E)/38/8E/23/87-88 dated 24.04.2009 having validity till 31.03.2011 for AY 2011-12, was deemed to be extended in perpetuity unless specifically withdrawn consequent upon omission of the provision to section 80G(5)(vi) of the Act read with CBDT Circular dated 27.10.2010. This letter dated 27.09.2011 was issued on 18.10.2011 vide M. No. DIT(E)/8E/23/87-88/6292-94. The 4 Concern For Calcutta. assessee applied for registration u/s. 80G(5)(ii) on 25.11.2022 on Form No. 10AB. It also filed an application for registration u/s. 80G(5)(iii) on Form No. 10AB on 16.05.2023. Since it was an existing assessee and was granted approval which was deemed to be extended in perpetuity unless specifically withdrawn post the amendment in the provisions of section 80G(5), it was required to apply for registration under the amended provision under clause (i) of the proviso to section 80G(5)(i) while it incorrectly applied under clause (ii) which is for the case where the approval is due to expire. Both the applications u/s. 80G(5)(ii) as well as 80G(5)(iii) were filed within time. As the approval was granted in perpetuity, therefore, clause (ii) was not applicable but clause (i) was applicable. Further, due to technical error, the assessee could not correct the application by mentioning the correct clause. The provisional approval clause applies to new applicant only whereas in the case of the assessee being an existing assessee, clause (i) of the proviso to section 80G(5) was applicable. The assessee has requested that the application filed on 25.11.2022 may be treated as filed u/s. 80G(5)(i).
We have heard the rival submissions. Similar issue had come up before the Coordinate Bench in ITA No. 105/Kol/2024 Friends of Kolkata and vide order dated 01.04.2024 the Tribunal “B” Bench has held as under: “5. As far as the details of application and their dates, there is not much dispute. The ld. CIT(Exemption) was of the view that activity of the assessee-Trust commenced in 2012 and, therefore, for grant of a regular registration, it ought to have applied within six months from the appointed date, i.e. 1st of April, 2021 extended upto 30th September, 2023. The assessee did not file such application. He further observed that the assessee has applied for grant of a provisional registration under sub-clause (iv) and immediately thereafter applied for grant of a regular registration under sub-clause (iii), which is meant for those Trust or Society, which came after April, 2021. In view of the above, he was of the opinion that being an old Trust, the assessee has applied for a provisional registration and thereafter regular registration. But such application is not in consonance with the procedure laid down under sub-clause (iii) as well as sub-clause (iv) and, therefore, on account of this technical aspect, he rejected the application of the assessee.
6. With the assistance of ld. Representatives, we have gone through the record carefully. As observed earlier, had application was moved under sub-clause (i) instead of applying for 5 Concern For Calcutta. provisional registration, then no dispute would have come, because the assessee-Trust is an existing Trust and the time limit to move an application under sub-clause (i) has been extended upto 30th September, 2023. Its application alleged to be moved under subclause (iii) would have been under clause (i), then it would be construed as within time limit? 7. We are of the view that it is only a technical error. The ld. CIT(Exemption) ought to have looked into the matter on this aspect and call for a clarification from the assessee. Once he was seized of the matter and aware that the Trust was enjoying registration under section 80G under old regime, it fulfilled all other conditions, then on account of wrong mention of section (iii) instead of (i), in its application should have not been given much weightage for rejecting the application on technical grounds. Therefore, we set aside the impugned order and relegate this issue to the file of ld. CIT(Exemption) with a direction that application of the assessee be treated under clause (i) and it be decided on merit.”
Further, in another case in & 50/Kol/2024 Shree Ram Chandra Saraf Seva Nidhi dated 14.03.2024 decided by the Tribunal “C” Bench, Kolkata in which the Bench vide para 3 has held as under: “3. Considering the overall facts and circumstances of the case and also as observed by us in many cases that due to complexity of the newly inserted provisions even the ld. CIT(E)s also could not properly interpret the same, therefore, the assessee cannot be punished on this technical ground. The impugned orders of the CIT(E) are, therefore, set aside and it is directed that the ld. CIT(E) will consider the applications filed by the assessee in Form 10AB as being flied in the relevant prescribed form which is required for making applications for the institutions who are already registered as on 0l.04.2021 and the applications moved by the assessee will be treated as being moved u/s. 12A(ac)(i) of the Act and under Clause (i) to the First Proviso to section 80G(5) of the Act respectively and the CIT(E) will grant the provisional registration accordingly. The Ld. CIT(E) will decide both the applications of the assessee within two months of the receipt of copy of this order.”
Respectfully following the above decisions of the Coordinate Benches, cited supra, we direct the Ld. CIT(E) to consider the application filed by the assessee in Form 10AB as being filed in the relevant prescribed Form which is required for making application for the institutions which are already registered on 01.04.2021 and the application filed by the assessee will be treated as filed under clause (i) of the first proviso to sec. 80G(5) of the Act. The Ld. CIT(E) will decide the matter of the assessee within two months of the receipt of this order in accordance with law.