RATNAM FOUNDATION,VADODARA vs. THE COMMISSIONER OF INCOME TAX(EXEMPTION), AHMEDABAD

The present appeal is filed by the applicant trust against the order dated 20.11.2023 passed by the Commissioner of Income Tax (Exemption) Ahmedabad, (in short ‘the CIT(Exemption)’), rejecting the application for approval u/s. 80G(5)(iii) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).

The application for approval of the Trust under clause (iii) of first Proviso to Sub-Section (5) of Section 80G of the Income Tax Act, 1961 was received in Form No.10AB electronically by the CIT(Exemption) and as per the data available in ITBA the same was filed on 27.05.2023. The ld. CIT(Exemption) observed that the assessee had got provisional approval u/s 80G(5) of the Act and, therefore, was required to file application in Form 10AB within the time period of at least six months prior to the expiry of the Assessment Year: Nil Page 2 of 4 period of provisional approval or within six months of commencement of its activities, whichever was earlier. The CIT(Exemption) noticed that the assessee trust was incorporated on 03/07/2021 and provisional approval was issued to the trust on 15/08/2022. As the present application was filed belatedly by the assessee the CIT(Exemption) issued notice on 06.10.2023 calling for an explanation of the assessee in this regard. In reply dated 19/10/2023 the assessee had submitted that the activities of the trust started in the month of March, 2023 but no explanation for the delay in filing the present application was given. The CIT(Exemption) has observed that from the accounts for F.Y. 2021-22 it was evident the activities of the firm had started in the F.Y. 2021-22 itself and the applicant trust was required to file the application in Form 10AB on or before 30/09/2022. As the present application was filed belatedly on 27.05.2023 in Form No.10AB under Section 80G(5) of the Act, the same was rejected by the ld. CIT(Exemption) as non-maintainable.

The Ld. AR submitted that the CBDT vide Circular no.7/2024 has extended the time limit for making application for approval of exemption under Section 80G(5) of the Act till 30.06.2024. Therefore, the applicant trust may be allowed to make the application as per the said Circular and the present appeal be disposed of with the said liberty granting to the applicant trust.

The Ld. DR relied upon the order of the ld. CIT(Exemption).

We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the CBDT vide recent Circular No.7/2024 dated 25th April, 2024, has allowed another opportunity for grant of approval u/s. 80G(5)(iii) of the Act by extending time limit for filing the application in Form No. 10AB till 30.06.2024. The assessee has also submitted that it will exercise the option of filing new application for Assessment Year: Nil Page 3 of 4 registration within this extended time limit. Thus, the present appeal filed in respect of dismissal of the applications filed by the assessee under Section 80G(5) of the Act has to be taken inconsonance with the latest Circular No.7/2024 issued by the CBDT dated 25th April, 2024. Since the time limit for application is extended till 30.06.2024, we are hereby granting the liberty to the assessee to make the appropriate application within the stipulated time issued by the CBDT and, therefore, the present appeal is dismissed accordingly.

In the result, appeal of the assessee is dismissed with the liberty as mentioned in para-5 hereinabove. Order pronounced in the open Court on this 7th June, 2024.