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Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD
Before: SMT. ANNAPURNA GUPTA& SHRI SIDDHARTHA NAUTIYAL
IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER& SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER (Assessment Year: N.A.) Adani Education Foundation, Vs. Commissioner of Income Tax, Adani Corporate House, (Exemptions), Shantigram, Nr. Vaishnodevi Ahmedabad Circle, Khoraj, Khodiyar B.O., Ahmedabad-382421 [PAN No.AAVCA9995Q] (Appellant) .. (Respondent) I.T.A. No.860/Ahd/2023 (Assessment Year: N.A.) Adani Kindergarten Education Vs. Commissioner of Income Tax, Foundation, (Exemptions), Adani Corporate House, Ahmedabad Shantigram, Nr. Vaishnodevi Circle, Khoraj, Khodiyar B.O., Ahmedabad-382421 [PAN No.AAWCA3161B (Appellant) .. (Respondent) Appellant by : Shri Bandish Soparkar & Shri Parin Shah, A.Rs. Respondent by: Fr. Darsi Suman Ratnam, CIT D.R. Date of Hearing 04.04.2024 Date of Pronouncement 17.04.2024 O R D E R PER SIDDHARTHA NAUTIYAL, JM:
Both the appeals have been filed by the Assessee against the orders passed by the Ld. Commissioner of Income Tax (Exemption), (in short “Ld. CIT(E)”), Ahmedabad vide orders dated 29.08.2023. Since common facts and issues are involved for both the years under consideration, both appeals are being taken up together.
The assessee has raised the following grounds of appeal:- &860/Ahd/2023 Adani Education Foundation/ Adani Kindergarten Education Foundation vs. CIT(E) Asst. Year –N.A. - 2 - ITA No. 859/Ahd/2023 “1. In law and in the facts and circumstances of the appellant's case, the impugned order rejecting the application made under Section 80G (5) of the Income Tax Act, 1961 is bad in law and deserves to be cancelled.
2. In law and in the facts and circumstances of the appellant's case, CIT(EXEMPTION) has erred in rejecting the application for final registration on the ground that the said application is belatedly filled without considering genuine hardship faced in filling Form 10AB which is also an admitted position in the CBDT circular dated 24 May, 2023.
3. In law and in the facts and circumstances of the appellant's case, the Ld. CIT (EXEMPTION) erred in drawing a conclusion that application filled under Section 80 G for final registration is beyond time limit prescribed under the referred Section without considering the effect of provisions of sub-Clause (iii) to first proviso of sub-Clause (5) to Section 80 G of the Act under which the only effective condition which is applicable in the current case for filling of such application was that the same has to be made 6 months prior to the expiry of the period of provisional registration and the application so filled was within such time frame as prescribed in the referred condition.
4. In law and in facts and circumstances of the appellant's case, the Ld. CIT (EXEMPTION) has grossly erred in not considering the fact that the one of the conditions provided in sub-Section (5) of Section 80G of the Income Tax Act, 1961 which is relevant for reckoning the time limit for filling the application, being that the application must be filled within a period of 6 month form the date of commencement of its activities, was rendered otiose or nugatory due to technical default on the part of department to make available such form before such period expired in terms of said condition.
5. In law and in facts and circumstances of the appellants case the Ld. AO has grossly erred in not considering the fact that since one of the two conditions providing for arriving at period within which the application for final registration ought to be filled under sub-Section (5) of Section 80G of the Income Tax Act, 1961 was already rendered otiose and therefore, the time limit for filling the application under Section 80 G (5) had to be reckoned only with reference to sole condition being "at least 6 months prior to expiry of the period of the provisional approval "(quoted).
6. The appellant craves leave to add, amend, and alter any or withdraw any grounds of appeal at or before the time of appeal hearing.”
“1. In law and in the facts and circumstances of the appellant's case, the impugned order rejecting the application made under Section 80G (5) of the Income Tax Act, 1961 is bad in law and deserves to be cancelled. 2. In law and in the facts and circumstances of the appellant's case, CIT(EXEMPTION) has erred in rejecting the application for final registration on &860/Ahd/2023 Adani Education Foundation/ Adani Kindergarten Education Foundation vs. CIT(E) Asst. Year –N.A. - 3 - the ground that the said application is belatedly filled without considering genuine hardship faced in filling Form 10AB which is also an admitted position in the CBDT circular dated 24 May, 2023.
3. In law and in the facts and circumstances of the appellant's case, the Ld. CIT (EXEMPTION) erred in drawing a conclusion that application filled under Section 80 G for final registration is beyond time limit prescribed under the referred Section without considering the effect of provisions of sub-Clause (iii) to first proviso of sub-Clause (5) to Section 80 G of the Act under which the only effective condition which is applicable in the current case for filling of such application was that the same has to be made 6 months prior to the expiry of the period of provisional registration and the application so filled was within such time frame as prescribed in the referred condition.
4. In law and in facts and circumstances of the appellant's case, the Ld. CIT (EXEMPTION) has grossly erred in not considering the fact that the one of the conditions provided in sub-Section (5) of Section 80G of the Income Tax Act, 1961 which is relevant for reckoning the time limit for filling the application, being that the application must be filled within a period of 6 month form the date of commencement of its activities, was rendered otiose or nugatory due to technical default on the part of department to make available such form before such period expired in terms of said condition.
5. In law and in facts and circumstances of the appellants case the Ld. AO has grossly erred in not considering the fact that since one of the two conditions providing for arriving at period within which the application for final registration ought to be filled under sub-Section (5) of Section 80G of the Income Tax Act, 1961 was already rendered otiose and therefore, the time limit for filling the application under Section 80 G (5) had to be reckoned only with reference to sole condition being "at least 6 months prior to expiry of the period of the provisional approval "(quoted).
6. The appellant craves leave to add, amend, and alter any or withdraw any grounds of appeal at or before the time of appeal hearing.”
We shall take appeal file by the assessee in ITA No. 859/Ahd/2023.
The brief facts of the case are that the assessee filed application in Clause (iii) first Proviso to sub Section (5) of Section 80G of the Act filed in Form No. 10AB. The CIT(Exemptions) observed that the applicant has got provisional approval under Section 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 &860/Ahd/2023 Adani Education Foundation/ Adani Kindergarten Education Foundation vs. CIT(E) Asst. Year –N.A. - 4 - expiry of period of the provisional approval or within six months of commencements of its activities, whichever is earlier. The time limits prescribed therein are mandatory and the Commissioner of Income Tax has no power to condone the delay in filing application in Form No.10AB. The CBDT on multiple occasions had extended the time limit in filing the application in Form 10AB and vide Circular No. 6/2003 dated 25.05.2023, the date was not extended so far as filing of form 10AB under Section 80G(5)(iii) of Income Tax Act, 1961 is concerned beyond 30.09.2022. The applicant has filed Form 10AB, under Section 80G(5) of the Act on 04/02/2023. The applicant had been granted order for provisional approval in Form No. 10AC issued on 23.11.2021 for the period commencing from 23.11.2021 to A.Y. 2024-25. The Ld. CIT(E) observed that applicant had submitted that the date of commencement of activities was 08.12.2021. In view of the above, the applicant was required to file application in Form 10AB in this case on or before 30.09.2022, which it had failed to submit. The applicant has also not filed any request before appropriate authority for delay condonation under Section 119(2)(b) of I.T. Act, 1961. Therefore, the as per the CIT(E), the application in Form No. 10AB under Section 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.
The assessee is an appeal before us against the aforesaid order passed by CIT(Exemption) dismissing the application filed by the assessee in Form No. 10AB under Section 80G(5) of the Act.
Before us, the Counsel for the assessee firstly submitted that the ITAT has the power to condone the delay in filing of Form 10AB of the ITA Nos. 859&860/Ahd/2023 Adani Education Foundation/ Adani Kindergarten Education Foundation vs. CIT(E) Asst. Year –N.A. - 5 - Act for obtaining the final registration under Section 80G on the Act. The Counsel for the assessee relied upon several judicial precedents on this issue. Secondly, the Counsel for the assessee submitted that it could not file the application for final registration in time due to amendment in law regarding provisional and regular registration. The Counsel further submitted that the entire procedure of certification of trusts has undergone a substantial change/overhaul and various Circulars have been brought out by CBDT to mitigate the hardship to file the application for final registration of trust, and the time limit has been extended many times. Thirdly, the Counsel for the accessory relied on the recent case of CIT-1982, Charitable Trust in in which the ITAT held that 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 No.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.
In response, DR submitted that the correct course of action on part of the assessee was to approach the CBDT under Section 119 of the Act, for appropriate orders for extension of time-line or for condonation of delay in fling of present application. The DR submitted that approaching ITAT for relief for grant of extension of timeline is not the correct course of action, looking into the instant set of facts. The DR placed reliance on the observation made by CIT(Exemptions) in the order rejecting the application for grant of final registration under Section 80G(5) of the Act. &860/Ahd/2023 Adani Education Foundation/ Adani Kindergarten Education Foundation vs. CIT(E) Asst. Year –N.A. - 6 - 7. We have heard the rival contentions and perused the material record.
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.
&860/Ahd/2023 Adani Education Foundation/ Adani Kindergarten Education Foundation vs. CIT(E) Asst. Year –N.A. - 7 -
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 &860/Ahd/2023 Adani Education Foundation/ Adani Kindergarten Education Foundation vs. CIT(E) Asst. Year –N.A. - 8 - 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 Bhamashah Sundarlal 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) of the Act rejected by CIT(Exemption) relating to assessment years 2016-17, 2017-18 & 2018-19. The assessee’s application was dated 11.02.2019 under the old regime. The new regime of taxation of charitable trusts / institutions started w.e.f. 01.04.2021 and hence, reliance placed by Revenue on the Co-ordinate Bench decision of Kolkata Tribunal in the case of Bishnupur Public Education Institute, supra is not at all relevant and even the case law of Hon’ble High Court of Madras and the Hon’ble High Court of Andhra Pradesh are also relating to taxation of old regime prior to 01.04.2021. Hence, these are clearly distinguishable on facts and hence, not applicable. In term of the above, we now go through the factual aspect. 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 &860/Ahd/2023 Adani Education Foundation/ Adani Kindergarten Education Foundation vs. CIT(E) Asst. Year –N.A. - 9 - 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 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.”
Now coming to the instant facts, we observe that the assessee had filed Form 10AB for grant of final registration under Section 80G of the Act on 04.02.2023 i.e. within the extended time-line provide vide CBDT Circular with respect for final registration of Trust under Section 12A of the Act in Form 10AB i.e. 30.09.2023. Accordingly, in light of the aforesaid Ruling, the order of CIT(Exemptions) on this issue is set aside, &860/Ahd/2023 Adani Education Foundation/ Adani Kindergarten Education Foundation vs. CIT(E) Asst. Year –N.A. - 10 - and matter is remanded to the file of CIT(Exemption) for re-deciding the issue of grant of final registration under Section 80G(5) of the Act, on merits, as per law.
In the result, the appeal of the assessee is allowed for statistical purposes.
Since the facts and issues for consideration for both the appeals under consideration are similar, the appeal of the assessee in the case of Adani Kindergarten Education Foundation in is also restored to the file of CIT(Exemption) for re-deciding the issue on merits, as per law.
In the result, both the appeals of the assessed are allowed for statistical purposes. This Order pronounced in Open Court on 17/04/2024
Sd/- Sd/- (ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 17/04/2024 TANMAY, Sr. PS TRUE COPY आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A)- 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,