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2024 (6) TMI 805 - AT - Income TaxIssues involved: The rejection of an application filed in Form No.10AB for seeking approval under clause (iii) of first proviso to sub-section (5) of Sec. 80G u/s 80G(5)(iii) due to exceeding the mandatory timeline for filing the application. Summary: Issue 1: Application rejection due to exceeding timeline for filing: The assessee trust filed an application in Form No.10AB seeking registration under clause (iii) of first proviso to sub-section (5) of Sec.80G after the prescribed timeline. The Ld. CIT(E) rejected the application as non-maintainable based on the violation of mandatory time limits. However, a co-ordinate bench decision in another case recognized the genuine hardship faced by charitable institutions in meeting the timelines, leading to the acceptance of the plea that the timeline should be treated as directory and not mandatory. The bench held that the extended time limit as per CBDT Circular should apply to Form No.10AB as well, remanding the matter back to the Ld. CIT(Exemption) for re-decision on merits. Issue 2: Legitimacy of Circular No.6 of 2023: The Hon'ble High Court of Madras declared clause 5(ii) of Circular No.6 of 2023 dated 24.05.2023 as illegitimate, arbitrary, and ultra vires the Constitution of India. Following this decision, the ITAT Chennai set aside the impugned order and directed the Ld. CIT(E) to consider the application on merits without raising the issue of timeline. The appeal was allowed for statistical purposes based on the above orders.
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