2024 (6) TMI 975 - AT - Income Tax

Rejection of approval u/s 80G(5) - delay in filing of application by 178 days - assessee vehemently argued that assessee-trust was allowed provisional registration, which is followed up to assessment year 2024-25 and that the assessee-trust was under bona fide belief that they have applied for regular approval well within time limit from the commencement of their activities, which is started from 27.09.2022 - alternative plea, the assessee prayed for condoning the delay on the basis of decision of Vishwa Jagriti Mission 2013 (1) TMI 157 - DELHI HIGH COURT - HELD THAT - Considering the alternative plea of assessee and following the decisions of this combination in the case of GHB Green Foundation and in SDA Aarogya Trust 2024 (1) TMI 946 - ITAT SURAT and decision of Vishwa Jagriti Mission 2013 (1) TMI 157 - DELHI HIGH COURT the delay in filing of application under section 80G(5) of 178 days is condoned and appeal of the assessee is restored beck the file of Ld.CIT(E) to reconsider the application of assessee and examine the remaining requirements of approval and to pass order afresh in accordance with law and allow relief to assessee, if assessee fulfilled all requisites conditions for availing approval under section 80G(5) of the Act. In the result, the grounds of appeal raised by the assessee is allowed for statistical purpose.

Summary

Issues:
- Rejection of application for approval under section 80G(5) of the Income Tax Act, 1961.
- Commencement of activities by the assessee-trust.
- Delay in filing the application for approval.
- Condonation of delay in filing the application.
- Interpretation of charitable activities by the Ld. CIT(E).
- Legal implications of donations made by the assessee-trust.

Analysis:

1. The appeal was filed against the order of the Ld. Commissioner of Income-Tax (Exemption, Ahmedabad) rejecting the application for approval under section 80G(5) of the Income Tax Act, 1961. The assessee argued that the activities of the trust commenced on 27.09.2022 when students were admitted for computer courses, not when donations were given and received. The Ld.CIT(E) rejected the application based on donations made in 2021-22, stating the trust should have applied before 23.09.2022. The assessee contended that the application was filed within six months of commencing activities, making it eligible for approval under section 80G(5).

2. The assessee, in the alternative, requested the condonation of the 178-day delay in filing the application. They cited previous Tribunal decisions and a Delhi High Court case where delays were condoned in similar situations. The Ld.CIT-DR for the Revenue supported the rejection, emphasizing that donations made were part of the trust's activities and the application was not timely. The Tribunal considered all arguments and case laws presented.

3. The Tribunal found that the Ld.CIT(E) had based the rejection on donations made on 31.03.2022, deeming them charitable activities and requiring the application within six months. The assessee believed they applied within the required time limit from the commencement of activities on 27.09.2022. Following previous decisions, the Tribunal decided to condone the 178-day delay and directed the Ld.CIT(E) to reconsider the application, ensuring all conditions for approval under section 80G(5) were met. The appeal was allowed for statistical purposes.

4. The Tribunal's decision highlighted the importance of the timing of application submissions under section 80G(5) and the interpretation of activities as charitable. The case demonstrated the significance of timely compliance with statutory requirements and the possibility of condoning delays in certain circumstances based on legal precedents and bona fide beliefs.

5. Ultimately, the Tribunal's ruling provided clarity on the commencement of activities for trust approval under section 80G(5) and the considerations for condoning delays in filing applications, ensuring fair treatment and adherence to legal provisions in such matters.