GROW FOUNDATION GANDHINAGAR,GANDHINAGAR vs. THE CIT(EXEMPTION), AHMEDABAD

3. In the present case, the applicant has got provisional approval u/s 80G(5) of the Act and therefore the applicant was required to file application in Form No. 10AB under clause (iii) of first proviso to sub-section (5) of section 80G of the Act within the time period of at least six months prior to expiry of period of the provisional approval or within six months of commencements of its activities, whichever is earlier. The time limits prescribed therein is mandatory and the Commissioner of Income Tax has no power to condone the delay in filing application in Form No. 10AB. Hon'ble Kolkata Tribunal in the case of Bishnupur Public

Education Institute, reported in 139 taxmann.com 121, wherein the Hon'ble Tribunal while adjudicating the issue of similar provisions of due date u/s 10(23C) of the Act has held that "7. The adjudicating authorities under the Income-tax Act are quasi judicial authorities. They can grant approval with retrospective effect if such mechanism is provided in the Act. There is no such provision nor there is any power to condone the delay after considering the reasonable reasons. A reasonable cause can be taken into cognizance for condoning the delay, if such provision is provided in the Act while considering any issue for adjudication. Therefore, considering the above proposition, we are of the view that Id. CIT (Exemption) has rightly rejected the application of the assessee for grant of approval under section 10(23C)(vi) of the Income-tax Act. All these three appeals are rejected." The same ratio apply for applications made under clause (iii) of first proviso to of Income Tax Act, 1961 also.

4. CBDT on multiple occasions had extended the time limit in filing the application in Form 10AB under clause (iii) of first proviso to sub-section (5) of section 80G as under:

Sr.No Circular no. Relaxation provided for filing application u/s 10AB for 80G up to 1. Circular No. 12 Extended up to 31st August 2021 as under. of 2021 dated The application under section 10(23C), 12AB, 25.06.2021 35(1)(ii)/(iia)/(iii) and 80G of the Act in Form No. 10A/Form No. 10AB, for registration/provisional "(6) registration/intimation/approval/provisional approval of Trusts/Institutions/Research Associations etc. required to be made on or before 30th June, 2021, may be made on or before 31st August, 2021;"

3. Extended up to 30.09.2022 as under. 31.03.2022 Circular No. 1. On consideration of difficulties in electronic filing of 8/2022 dated Form No. 10AB as stipulated in Rule 2C or 11AA or 17A of the Income-tax Rules, 1962, w.e.f. 1-4-2021, the Central Board of Direct Taxes (CBDT), in exercise of its powers under section 119(1) of the Act, extends the due date for electronic filing of such Form as under The application for registration or approval under section 10(23C), 12A or 80G of the Act in Form No.10AB (I) for which the last date for filing falls on or before 29th September 2011, may be filed on or before 30th September 2022.

4. Circular The date was not extended so far as filing of form 10AB No.6/2023 dated under section 80G(5)(iii) of Income Tax Act, 1961 is 24.05.2023 concerned.

* extract from circular no.6 of 2023 dated 24.05.2023 "5. In order to mitigate genuine hardship in such cases, the Board, in the exercise of the power under section 119 of the Act, extends the due date of making an application in, Form No. 10A, in case of an application under clause (i) of the first proviso to clause (23C) of section 10 or under sub-clause (i) of clause (ac) of sub- (i) section (1) of section 12A or under clause (i) of the first proviso to sub- section (5) of section 80G of the Act, till 30-9-2023 where the due date for making such application has expired prior to such date, Form No. 10AB, in case of an application under clause (iii) of the first proviso to clause (23C) of section 10 or under sub-clause (iii) of clause (ac) of sub-section (1) of section 12A of the Act, till 30-9-2023 where the due date for making such application has expired prior to such date."

6. In view of the above, trusts may now apply for registration/approval under clause (1) or clause (iii) of the first proviso to clause (23C) of section 10 or (ii) sub-clause (i) or sub-clause (iii) of clause (ac) of sub-section (1) of section 12A of the Act by 30.09.2023 and where such application is made by the said date and registration/approval is granted, the provisions of clause (iii) of sub-section (3) of section 115TD of the Act shall not apply on account of delay in making application in accordance with the provisions of clause (i) or (iii) of the first proviso to clause (23C) of section 10 or sub-clause (i) or (iii) of clause (ac) of sub-section (1) of section 12A of the Act.

7 it may be also noted that the extension of due date as mentioned in paragraph 5(ii) shall also apply in case of all pending applications under clause (ii) of the first proviso to clause (23C) of section 10 or sub-clause (ii) of clause (ac) of sub-section (1) of section 12A of the Act, as the case may be Hence, in cases where the trust has already made an application in Form No. 10AB under the said provisions but such application has been furnished after 30.09.2022 and where the Principal Commissioner or Commissioner has not passed an order before the issuance of this Circular, the pending application in Form No 10AB may be treated as a valid application. Further, in cases where the trust had already made an application in Form No. 10AB, and where the Principal Commissioner or Commissioner has passed an order rejecting such application, on or before the issuance of this Circular, solely on account of the fact that the application was furnished after the due date, the trust may furnish a fresh application in Form No. 10AB within the extended time provided in paragraph 5(ii) ie. 30.09.2023"

4.1 From the above, it is clear that there is no change in last date for filing Form No. 10AB for approval under clause (ii) of first proviso to sub-section (5) of section 80G of the Act, which was 30th September, 2022 as per circular no. 08/2022 dated 31/03/2023. It may also be noted that sub para (5) to sub para (7) of circular no. 06 of 2023 dated 24/05/2023 does not talk about application made under Form No. 10AB under Clause (iii) of first proviso to sub-section (5) of Section 80G of the Act. The extension upto 30.09.2023 was allowed only in respect of applications made under Clause (i) of first proviso to sub-section (5) of Section 80G of the Act in respect of application made in form 10A under Para 5(i) of circular No. 6/2023 dated 24.05.2023 discussed above. Therefore, no extension was provided after 30.09.2022 in respect of applications made under Clause (iii) of fist proviso to sub-section (5) of Section 80G of the Act. Facts of case 5. The applicant has filed Form 10AB, u/s 80G (5) of the Act on 28/08/2023. The date of registration/incorporation in this case is 01/09/2013 as per Form 10AB. The applicant had been granted order for provisional approval in Form No. 10AC issued on 16/09/2022 under Clause (iv) of first proviso to sub-section (5) of section 80G for the period commencing from 16/09/2022 to AY 2025-26. 5.1 Vide notice dated 03/11/2023, the applicant was intimated the followings "5. It is to be bring to your notice that you have filed in Form 10AB for registration under clause (ii) of first proviso to section 80G(5) of the income Tax Act, 1961, which states as under "where the institution or fund has been provisionally approved, at least six months prior to expiry of the period of the provisional approval or within six months of commencement of its activities, whichever is earlier.

6. Therefore, the date of commencement of activities in your case should also be 6 month prior to the date of filing of Form 10AB. You may note that the benefit of circular No. 6/2023 dated 24.05 2023 of CBDT for filing belated application under clause (i) of first proviso to section 80G(5) was also available till 30.09.2022 only.

7. Therefore, if the activities of of the fund/institution are not commenced within stipulated time as discussed above, you are requested to explain as to why the present application filed in section 80G(5)(iii) in form No. 10AB should not be treated as not filed within due date specified in the Act & why the same should not be rejected as non-maintainable. 6 In response to the same, the applicant has filed its reply dated 04/12/2023 wherein the applicant has mentioned that the date of commencement of activities of the trust is 28.08.2023, However, the applicant has submitted its Annual account for FY 2021-22, on verification of the same it is observed that the applicant has received income from Grant income of Rs 7,25,575/- and also incurred expenses towards Service & Maintenance 5,38,000/-, Rs.9,000 toward Training expenses respectively. Similarly in FY 2020-21 the applicant has received income from Grant income of Rs. 1,81,572/-,& in FY 2019-20 of Rs. 70,72,700. Further, it is also found that during FY 2018-19, the applicant incurred salary expenses of Rs. 4,15,000/-

Decision

7. The above said facts clearly prove that the activities of the trust have commenced long back i.e. during or before FY 2018-19. In view of discussion in Para 3 and Para 4 above, the applicant was required to file application in Form 10AB in this case on or before 30/09/2022, which he has failed to submit. Therefore, the present application in Form No. 10AB u/s 80G(5) of the Act has not been filed within the time limit prescribed therein and therefore, the same is liable to be rejected as such as non maintainable. Therefore, the present application in Form No. 10AB u/s 80G(5) of the Act is rejected as non maintainable without going into the merits and also provisional approval granted in Form No.10AC, under clause (iv) of first proviso to subsection (5) of section 80G is hereby cancelled.

4. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(E) rejecting the application filed by the assessee / Applicant Trust. In the instant case, we observe that the assessee / Applicant Trust is an old Trust which was registered on 01.09.2013. The assessee Trust filed application for grant of final approval under Section 80G of the Act on 28.08.2023 and the assessee / Applicant Trust was granted provisional approval on 16.09.2022. The said application filed by the assessee / Applicant Trust was rejected on 16.02.2024.

5. Therefore, the first question for our consideration is that since vide Circular No. 8/2022 dated 31.03.2022, the date of grant of registration under Section 80G(5) of the Act was extended to 30.09.2022 and vide Circular No. 6/2023 dated 24.05.2023, this date was not extended beyond the period of 30.09.2022 so far as filing of Form 10AB under Section 80G(5)(iii) of the Act is concerned and only the time for grant of registration under Section 12AB of the Act was extended to 30.09.2023, can a view / interpretation be taken that the time limit for filing of application in Form 10AB for grant of registration under Section 80G(5) of the Act had also been extended to 30.09.2023. We observe that the ITAT in the case of Adani Education Foundation in has discussed the issue and has held that on a reasonable interpretation, there is no reason to provide for a distinction / different timeline for accepting application for grant of final approval in respect of grant of registration in Form No. 10AB for registration under Section 12AB of the Act and for grant of final registration under Section 80G(5) of the Act. While passing the order, the ITAT made the following observations:-

“8. In our considered view, the ITAT in the case of CIT-1982, Charitable Trust in has elaborately discussed the issue under consideration before us, after taking into consideration various judicial precedents which have been rendered in the past on the instant subject. The ITAT, in our considered view has correctly observed that there is no reason to provide for a distinction within the same provision, so as to have a different timeline for accepting application for grant of final approval in respect for grant of registration in Form No. 10AB for registration under Section 12A of the Act and for grant of final registration under Section 80G(5) of the Act. The ITAT, in our view has correctly observed that there cannot be a distinction within the same provision for having different time-lines, without bringing out any exception and further, even the provisions of Section 80G are for the benefit of the donors, who are donating money to the charitable Trust for claiming exemption in their returns of income. It would be useful to reproduce their relevant extracts of the Ruling for reference: “7.2 The legislature by way of amendment introduced new regime for taxation of Trusts w.e.f. 01.04.2021 and this amendment was made with the objective that it needs improvement with the advent of technology and keeping in mind the practical issue of difficulty in obtaining registration/approval/notification before actually starting the activities. To make the process of registration completely electronic under a 16 digit Unique Registration Number (URN), the new regime was introduced for new as well as to existing charitable institutions. Due to change in law, a new clause (ac) has been inserted in sub-section (1) of section 12A w.e.f. 01.04.2021 which states that notwithstanding anything contained in clauses (a) to (ab), the person in receipt of the income who wants to claim benefit of section 11 & 12 is to made an application in the prescribed form 10A or 10AB and in prescribed manner to the Principal Commissioner or Commissioner, for registration of the Trust or institution. 7.3 Similarly, for approval u/s.80G of the Act, similar changes were effected in the provisions of section 80G(5), the first and second provisos, which were made applicable with effect from 01.04.2021 for existing Trusts as well as new Trusts or entities. This amendment is brought in by Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 amended the provisions related to application by a Trust for registration or approval by amending the first and second proviso to clause (23C) of section 10, clause (ac) of sub-section (1) of section 12A of the Act, inserting section 12AB of the Act and amending the first and second proviso to sub-section (5) of section 80G of the Act. 7.4 We are concerned with the provisions of section 80G of the Act in these cases. In view of the above provisions, the deduction u/s.80G of the Act in respect of a donation made by a donor to a fund or institution referred to in sub-clause (iv) of clause (a) of subsection (2) of section 80G, shall be allowed to the donor only if a statement of such donations is furnished by the donee in Form 10BD. The certificate of such donation is required to be provided in Form No. 10BE. Further, Form No. 10BD and Form No. 10BE are required to be furnished on or before the 31st May, immediately following the financial year in which the donation is received. The timeline provided for filling of application for approval of Trust or any institution under the first and second proviso to sub-section (5) of section 80G of the Act is within six months of commencement of activities or at least six months prior to expiry of provisional approval. These two timelines are provided in first proviso to section 80G(5) of the Act. But, the CBDT time and again considering the difficulties in filing in the electronic mode of filing of Form No.10A or 10AB, in exercise of powers conferred upon it u/s.119 of the Act, extended the due date for filing Form No.10A or 10AB up to 30.09.2022 vide Circular No.16/2021 dated 29.08.2021 and further, vide Circular No.6/2023 dated 24.05.2023 up to 30.09.2023. But the CBDT has extended this date up to 30.09.2023 in filing Form No.10A for registration u/s.12A of the Act vide paras 6 to 8 of the Circular (which is reproduced in this order at para 7.1 above). The Revenue has filed the date and events which are undisputed in this case and as admitted by Revenue that in this case, provisional registration was granted u/s.80G(5) of the Act in Form No.10A under the new regime under clause (iv) of the said provision vide dated 23.09.2021. Even the final registration was granted u/s.12A of the Act in Form No.10AD under the new regime vide dated 13.09.2023 but rejected the application for final approval applied u/s.80G of the Act in Form No.10AB vide order dated 25.09.2023 by CIT(Exemption) on the reason that the application was filed by assessee only on 17.03.2023, which is belated application. There is no dispute about the final registration granted to the assessee Trust u/s.12A of the Act in Form No.10AD under the new regime vide order dated 13.09.2023 but rejected assessee’s application filed in Form No.10AB u/s.80G of the Act dated 17.03.2023 vide order dated 25.09.2023 as the application is a belated one. 7.5 We have considered the case laws of Co-ordinate Bench of Jaipur Tribunal in the case of Go Gram Eco Foundation, supra and noted that the Jaipur Bench has considered this issue of delay in application filed in Form No.10AB in term of clause (iii) of first proviso to section 80G(5) of the Act, wherein the provisional registration was granted to the assessee Trust on 16.10.2021 in Form No.10A u/s.12A(1)(ac)(vi) and under clause (iv) of first proviso to section 80G(5) of the Act. In that case, the provisional registration was granted in form No.10AC on 27.10.2021. Admitted fact in the case is that the assessee Trust commenced its activities from 13.10.2021 being new Trust and assessee filed application for grant of approval under clause (iii) of first proviso to section 80G(5) on 16.12.2022, which is delayed by almost about 2.5 months from the extended date. The Tribunal considered this issue and finally in para 6.1 noted and the relevant reads as under:-

There is no dispute as to the fact that assessee is provisionally registered till A.Y. 2024-25 vide order dated 27.10.2021. Thus it has complied with section 80G(5). The proviso to this section only deals with the procedure as to the filing of the application. The law of procedure has to be approached, understood and appreciated as a helpmate in the course of the process of administration of justice. Procedural provision should be so construed as to sub serve the course of justice and not to hinder it. It is a settled proposition of law that technicalities should not come in way in imparting the substantial justice. We get support of our this view from the decision of Hon’ble Supreme Court in case of S. Nagaraj & Others Vs. State of Karnataka & Another 4 SCC 595. 7.6 Even in the decision of Jodhpur Bench of this Tribunal in the case of BhamashahSundarlal Daga Charitable Trust, supra, the assessee Trust received provisional approval u/s.80G(5) vide order dated 16.08.2022 for the period from 16.08.2022 to A.Y. 2025-26. The assessee has also got approval u/s.12A(1)(ac) of the Act from A.Y. 2022-23 to A.Y. 2026-27 and assessee filed application in Form No.10AB for approval u/s.80G(5) of the Act on 11.01.2023, which was treated as belated application and appropriate authority rejected the approval application filed by the assessee. But the Tribunal allowed the maintainability of application and directed the CIT(Exemption) to re-decide on merits. Hence, these decisions favors the case of the assessee and clearly applicable to the facts of present case before us. 7.7 The case law cited by the Revenue of Kolkata Tribunal in the case of Bishnupur Public Education Institute, supra wherein the Kolkata Tribunal has relied on the decision of Hon’ble High court of Madras in the case of All Angels Educational Society, supra and the Hon’ble High Court of Andhra Pradesh in the case of Aurora Educational Society vs. CCIT reported in 20 taxmann.com 46, after considering these decisions has decided the issue on the approval of application filed u/s.10(23C)(vi) 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.”

6.1 In the case of CIT-1982 Charitable Trust vs. ITO 160 taxmann.com 475 (Chennai – Tribunal), while passing the order the Tribunal held that the Timeline prescribed under clause (iii) of first proviso to section 80G(5) should be treated as directory and not mandatory, hence, once timeline prescribed for filing Form N0.10A for recognition under section 12A had been extended up to 30.09.2023, 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 also.

Circular No. 7/2024

F. No. 173/25/2024-ITA-I Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes New Delhi, Dated 25th April, 2024

Sub: Extension of due date for filing of Form No. 10A/10AB under the Income-tax Act, 1961-reg. On consideration of difficulties reported by the taxpayers and other stakeholders in the electronic filing of Form No. 10A/10AB, the Central Board of Direct Taxes (the Board) in exercise of its powers under section 119 of the Income-tax Act, 1961 (the Act) extended the due date for filing Form No. 10A to 31.08.2021 by Circular No. 1212021 dated 25.06.2021, to 31.03.2022 by Circular No.16/2021 dated 29.08.2021, to 25.11.2022 by Circular No. 22/2022 dated 01.11.2022 filing Form No. 10AB to 30.09.2022 by Circular No. 8/2022 dated 31.03.2022 and further to 30.09.2023 by Circular No. 6/2023 dated 24.05.2023.

2. Representations have been received in the Board with a request to condone the delay in filing Form No. 10A/10AB, as the same could not be filed in such cases within the last extended date, i.e.,30.09.2023.

3. On consideration of the matter, with a view to avoid and mitigate genuine hardship in such cases, the Board, in exercise of the powers conferred under section 119 of the Act, hereby extends the due date of making an application/intimation electronically in –

(i) Form No. 10A, in case of an application under clause (i) of the first proviso to clause (23C) of section 10 or under sub-clause (i) of clause (ac) of sub-section (1) of section 12A or under clause (i) of the first proviso to sub-section (5) of section 80G or in case of an intimation under fifth proviso of subsection(1) of section 35 of the Act, till 30.06.2024;

(ii) Form No. 10AB, in case of an application under clause (iii) of the first proviso to clause (23C)of section 10 or under sub-clause (iii) of clause (ac) of sub-section ( I) of section 12A or under clause (iii) of the first proviso to sub-section (5) of section 80G of the Act, till 30.06.2024.

4.1 Further, in cases where any trust, institution or fund has already made an application in Form No. 10AB, and where the Principal Commissioner or Commissioner has passed an order rejecting such application, on or before the issuance of this Circular, solely on account of the fact that the application was furnished after the due date or that the application has been furnished under the wrong section code, it may furnish a fresh application in Form No. 10AB within the extended time provided in paragraph 3(ii) i.e. 30.06.2024.

In the result, the appeal of the assessee is allowed for 9. statistical purposes.

This Order pronounced in Open Court on 10/09/2024