C I P FOUNDATION ,AHMEDABAD vs. THE COMMISSIONER OF INCOME TAX (EXEMPTION), AHMEDABAD

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH Before: Smt. Annapurna Gupta, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member CIP Foundation Commissioner of 7, Uma Dreams, Income Tax Nr. Kalhar Exotica, Vs (Exemption), Science City Road, Ahmedabad Sola, Ahmedabad Gujarat 380060 PAN: AADTC0730A (Appellant) (Respondent) Assessee Represented: Shri Snehal Sukhadia, A.R. Revenue Represented: Shri R. N. Dsouza, CIT-DR Date of hearing : 15-05-2024 Date of pronouncement : 30-07-2024 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-

This appeal is filed by the Assessee as against Rejection of registration under section 80G(5) of the Income Tax Act, 1961(hereinafter referred to as ‘the Act’) on the ground that the application in Form 10AB is filed beyond six months from the commencement of the activities of the trust vide order dated 21.12.2023 passed by the Commissioner of Income (Exemption), Ahmedabad. Page No 2 C I P Foundation vs. CIT(E)

raised by the assessee reads as under: 1 On the facts and in the circumstances of the case and in law, the learned CIT has erred in rejecting the application filed by the Appellant Trust on the ground that the application filed in Form 10AB has not been filed within time limit prescribed and therefore it is non- maintainable. The action of Ld. CIT of rejecting the application filed u/s 80G(5) of the Act is incorrect and unlawful and the approval u/s. 80G(5) of the Act ought to have been granted to the Appellant Trust.

2. On the facts and in the circumstances of the case and in law, the learned CIT has erred in rejecting the application on the basis that the application filed in Form 10AB regarding the approval of the trust has been filed beyond six months of the commencement of the activities of the Appellant Trust i.e. after the prescribed time limit as per Section 80G(5) However, the learned CIT has erred in not considering that the trust is an educational institution and the activities of the trust have been said to commence after the approval from the State Education Board is received

3. On the facts and in the circumstances of the case and in law, the learned CIT has erred in rejecting the application filed u/s 80G(5) (iii) of the Act stating that the delay in filing of application cannot be condoned by the CIT. It is submitted that there is no delay in filing of Application u/s 80G(5)(iii) and the same has been filed within the time limit as prescribed under the provisions of clause (iii) of first proviso to section 80G(5)

4. On facts and circumstances of the case, it is prayed before your Honours that the application filed in Form 10AB u/s 80G(5)(iii) of the Act dated 8 June 2023 may please be accepted and necessary directions may please be given to Ld. CIT for granting approval u/s 80G(5)(i) considering ments of the case. The order passed by the learned CIT rejecting the application of the Appellant Trust for registration under section BOG is bad in law and contrary to the provisions of law. The Appellant craves leave to add, alter, amend or withdraw any of the above grounds at or before the hearing of the appeal.

3. Ld. Counsel appearing for the assessee submitted that the assessee Trust was registered on 22.03.2022 by Declaration of Trust and registered with the Charity Commissioner, Ahmedabad for running Educational Institution. The assessee Trust made application before District Education Officer, Ahmedabad for permission to start schooling activities. However permission was denied to the assessee by the District Education Officer vide letter dated 24.12.2023. Against Page No 3 C I P Foundation vs. CIT(E) which an appeal was filed before Director of Primary Education, Gandhinagar who has granted approval to the assessee to run Primary School education for Standards 1 to 5 and Standards 6 to 8 vide its appellate orders dated 24.04.2023. It is thereafter, the assessee Trust filed Form 10AB on 08.06.2023 for Registration u/s. 80G. However the same was rejected by ld. CIT(E) on the ground that on perusal of the bank statement of the assessee, the assessee has incurred expenditure of Rs.45,000/- on 05.11.2022 for ‘website Designing & Development’ and also received Rs. 24,000/- as school admission fee on 08.11.2022. Thus the application filed in Form 10AB is beyond six months period of the commencement of the activities of the Trust and thereby rejected the application as not maintainable. The Ld. Counsel placed on record copies of the appellate orders passed by Director of Primary Education and other details and pleaded without approval from the State Education Board, the assessee Trust is not permitted to start its schooling activities. Since appellate orders received from Director of Primary Education was on 24.04.2023 and Form 10AB application filed on 08.06.2023 which is well within the limitation of six months and therefore pleaded to set aside the matter back to the file of Ld. CIT(E) to consider the application for Final Registration u/s. 80G and pass appropriate order on merits.

4. Per contra Ld. CIT-DR appearing for the Revenue supported the order passed by Ld. CIT(E) and requested to uphold the same.

5. We have given our thoughtful consideration and perused the materials available on record including the Paper Book filed by the Page No 4 C I P Foundation vs. CIT(E) assessee. It is undisputed fact that the assessee’s approval to run Primary Education School was rejected by District Education Officer, Ahmedabad. Against which appeals were filed before Director of Primary Education, Gandhinagar who has granted approval to the assessee trust to run Primary School Education for Standards 1 to 5 and Standards 6 to 8 from the Academic Year June 2023. Without this approval, the assessee trust could not have literally started its activities of running school and imparting education to the students. Thus in our considered view, the rejection order made by Ld. CIT(E) is not correct in law. Just because the assessee trust has incurred ‘website Designing Expenses’ in November 2022 that does not mean the assessee started its activities. Ld. Counsel also relied upon various case laws, however none of them is relating to registration u/s. 12AB or 80G of the Act, since the same are not considered as not relevant. Thus the order passed by Ld. CIT(E) is hereby set aside with a direction to consider the application filed by the assessee in accordance with law. Needless to say, the assessee should file all necessary documents including its approval granted by Director of Primary Education, Ahmedabad to the Ld. CIT(E) and pass appropriate order on merits of the case.