2024 (7) TMI 878 - AT - Income Tax

Rejection of final approval u/s 80G(5) - application filed u/s 80G(5)(iii) in Form 10AB treated as not filed within due date as specified in the Act - HELD THAT - We find that the case of the assessee is that they have made application for provisional approval u/s 80G, which was granted on 19.01.2023 for three years from 19.01.2023 to assessment year 2025-26, which was allowed and on receipt of provisional approval filed application in Form No.10AB for final approval on 24.01.2023 i.e., within week of provisional approval. The assessee never obtained approval of their fund in past, though their activities commenced in the year 1984, so the application of the assessee is not to be treated as time barred. We find that for obtaining approval u/s 80G, the primary condition is to first avail registration u/s 12AB, which the assessee has already been allowed. As find that the ld CIT(E) has not examined other requisite condition for approval of fund under section 80G and dismissed the application in limine, therefore, the application of the assessee is restored back to the file of CIT(E) to examine other required condition and pass the order in accordance with law. Appeal of the assessee is allowed for statistical purpose.

Issues:
1. Rejection of approval under section 80G(5)(iii) of the Income Tax Act, 1961.
2. Interpretation of Circular No.6/2023 dated 24.05.2023 regarding the due date for filing Form No.10A.
3. Rejection of final approval for delay in filing Form No.10AB.
4. Requirement of filing Form No.10AB for final registration within the prescribed time limit.
5. Consideration of the application for approval under section 80G.

Analysis:
1. The appeal was against the rejection of approval under section 80G(5)(iii) of the Income Tax Act, 1961. The assessee contended that the rejection was based on an incorrect interpretation of Circular No.6/2023 dated 24.05.2023, which extended the due date for filing Form No.10A. The assessee argued that they complied with the requirements within the prescribed time limit.

2. The issue of the interpretation of Circular No.6/2023 dated 24.05.2023 regarding the due date for filing Form No.10A was crucial. The assessee claimed that the Circular extended the due date till 30.09.2023, allowing them to file Form No.10A within the specified timeframe. However, the Revenue argued that the application was filed after the extended period, leading to its rejection.

3. The rejection of final approval for the delay in filing Form No.10AB was another key issue. The assessee maintained that they submitted the form within the prescribed time limit and that the order of rejection was unfounded. The Tribunal noted the sequence of events and found no delay on the part of the assessee in filing the necessary forms.

4. The requirement of filing Form No.10AB for final registration within the prescribed time limit was a significant point of contention. The assessee argued that they applied for final registration promptly after obtaining provisional approval, as required by law. The Tribunal emphasized the importance of complying with the prescribed timelines for such applications.

5. The consideration of the application for approval under section 80G was the central issue in the judgment. The Tribunal found that the assessee had met the primary condition of obtaining registration under section 12AB and had followed the necessary procedures for approval under section 80G. The Tribunal directed the authorities to re-examine the application, considering all relevant conditions and granting the assessee a fair opportunity to present their case.

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