2024 (3) TMI 1365 - AT - Income Tax

Denial of granting regular registration u/s 80G(5) - application is barred by limitation - delay in filing forms like 10A/10AB - applicability of circular 08/2023 in cases where provisional approval u/c (iv) of first proviso to s/s (5) of section 80G of the Act is granted - HELD THAT - In the present case before us, reading from para 3 of impugned order it as an undisputed fact that the appellant assessee was granted a provisional registration u/c (iv) of s/s (5) of section 80G of the Act by an order u/c (vi) of s/s (5) of section 80G of the Act by the Ld. CIT(E). Therefore, there remains no reason to draw out appellant s case from claiming benefit of extended period for filing application for regular registration. Further the circular 08/2023 also clarified that the extended period upto 30/09/2023 shall apply even in cases, (i) where the application was rejected by the CIT(E) on or before issuance of this circular dated 24/05/2023 (ii) where due date for making/filing application has expired, on or before 30/09/2023. In addition to above, in reply to a specific query, one of the Trustee/founder members appearing for the appellant spelt out the reasons beyond delayed filing of application, which in our considered view also formed sufficient reasonable ground to condone the delay. We find in similar facts circumstance, the co-ordinate benches allowed benefit of extended time period in Swachh Vapi Mission Trust 2024 (3) TMI 614 - ITAT SURAT , TB Lulla Charitable Foundation 2024 (6) TMI 798 - ITAT PUNE and Gujarat Hira Bourse 2024 (1) TMI 946 - ITAT SURAT and Bhamashah Sundarlal Daga Charitable Trust 2023 (11) TMI 1210 - ITAT JODHPUR Thus, rejection of appellant s application on the ground of limitation in our considered view is without appreciating the facts in its entirety and devoid of subsisting circular (supra), hence deserves to be set-aside, ergo ordered accordingly. Remand the matter back to the file of Ld. CIT(E) with a direction to treat appellant s application dt. 31/03/2023 as filed within the time limit prescribed u/c (iii) to first proviso to s/s (5) of section 80G of the Act r.w.c. 06/2023 - Assessee appeal is allowed for statistical purpose.

Issues:
Challenge to denial of regular registration u/s 80G(5) of the Income Tax Act, 1961 based on grounds of limitation and violation of natural justice.

Detailed Analysis:

1. The appellant challenged the denial of regular registration u/s 80G(5) of the Income Tax Act by the Commissioner of Income Tax (Exemption), Pune, after provisional registration was granted but the final registration application was rejected on grounds of limitation.

2. The appellant's application for provisional registration was accepted, and a certificate was issued, valid until the assessment year 2024-25. Subsequently, the application for regular registration was rejected due to being filed after the stipulated period, leading to the rejection by the Revenue.

3. The Revenue contended that the delayed application was beyond the extended time allowed by CBDT Circular 08/2022, citing precedents like 'All Angels Educational Society Vs CCIT' and judgments of the Supreme Court. The rejection was based on the application being barred by limitation.

4. The appellant appealed on legal grounds of error and violation of natural justice, which were found to be inconsonant with ITAT Rules, 1963. The appeal focused on the procedural aspects rather than the merits of the case.

5. After hearing both parties and examining the material on record, the Tribunal considered the issue of limitation and the application's rejection based on procedural grounds rather than the merits of the case.

6. The Tribunal noted that the appellant was granted provisional registration but failed to file the regular registration application within the stipulated period, leading to rejection by the Revenue. The rejection was based on the application being time-barred and lacking provisions for condonation of delay.

7. The key question revolved around the applicability of Circular 08/2022 in cases where provisional approval was granted under section 80G(5) of the Act, highlighting the importance of time limits and extensions granted by the CBDT.

8. The Tribunal analyzed the provisions of Circular 08/2022 and subsequent Circular 06/2023, emphasizing the extension of time limits for filing applications for regular registration in cases like the appellant's where provisional approval was granted.

9. Considering the facts of the case and the provisional registration granted to the appellant, the Tribunal concluded that the appellant was entitled to the extended period for filing the regular registration application.

10. The Tribunal also took into account the reasons provided for the delayed filing of the application, which were deemed sufficient and reasonable grounds to condone the delay, aligning with the principles followed in similar cases.

11. Citing precedents where extended time periods were allowed in comparable circumstances, the Tribunal found the rejection of the appellant's application on grounds of limitation to be unjustified and lacking appreciation of the relevant circulars.

12. Consequently, the Tribunal set aside the rejection based on limitation, remanding the matter to the Commissioner of Income Tax (Exemption) to consider the application within the prescribed time limit and adjudicate on the merits of the case in accordance with the law.

13. The appeal was allowed for statistical purposes, emphasizing the importance of procedural adherence and consideration of circulars in determining the validity of registration applications under the Income Tax Act.

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