2024 (9) TMI 264 - AT - Income Tax

Denial of grant of registration u/s 12AB and u/s 80G(5) - application not filed before 30-09-2023 - timeline prescribed for filing Form No. 10A for recognition under section 12A/ 80G - HELD THAT - Very recently vide Circular No. 7/2024 dated 25.04.2024 CBDT has further extended the due date of filing Form No. 10A/10AB under the Income Tax Act till 30.06.2024, taking into consideration the difficulties reiterated by tax payers electronic filing of 10A/10AB Since in the instant facts, as it evident from the various dates mentioned above, the assessee / Applicant Trust had filed application for grant of final approval under Section 80G(5) of the on 02.08.2023 and as noted by us in the preceding paragraph, the assessee could have filed application for grant of approval on or before 30.09.2023 which stands further extended to 30.06.2024 vide Circular No. 7/2024 dated 25.04.2024, then, in our considered view, the application for grant of final registration under Section 80G(5) of the Act could not be denied only on the ground that the same was not filed before 30-09-2023. Appeal of the assessee is allowed for statistical purposes.

Summary

Issues Involved:
1. Rejection of application filed by the assessee in Form 10AB under Section 80G(5) of the Income Tax Act.
2. Cancellation of provisional approval granted to the assessee in Form 10AC under Section 80G(5)(iv) of the Act.
3. Interpretation of the timeline for filing Form 10AB under the amended provisions of Section 80G(5) effective from 01.04.2021.

Detailed Analysis:

Issue 1: Rejection of Application Filed by the Assessee in Form 10AB Under Section 80G(5)
The assessee's application for final approval under Section 80G(5)(iii) in Form No. 10AB, filed on 02.08.2023, was rejected by the CIT(Exemptions) on the grounds of non-compliance with the prescribed timeline. The CIT(E) noted that the application should have been filed within six months prior to the expiry of the provisional approval or within six months of the commencement of activities, whichever is earlier. The commencement date of activities was 11.11.2021, making the deadline 30.09.2022. The application, filed beyond this date, was deemed non-maintainable.

Issue 2: Cancellation of Provisional Approval Granted to the Assessee in Form 10AC
Alongside the rejection of the Form 10AB application, the CIT(E) also cancelled the provisional approval granted to the assessee in Form No. 10AC under Section 80G(5)(iv). This cancellation was based on the failure to meet the filing deadline for Form 10AB, rendering the provisional approval void.

Issue 3: Interpretation of the Timeline for Filing Form 10AB Under Amended Provisions
The Tribunal examined whether the timeline for filing Form 10AB should be treated as directory rather than mandatory, especially considering the transitional nature of the amendments effective from 01.04.2021. The Tribunal referenced several cases, including Adani Education Foundation and CIT-1982 Charitable Trust, which discussed the issue of different timelines for applications under Section 12A and Section 80G(5).

The Tribunal observed that the CBDT had extended the due date for filing Form No. 10A/10AB multiple times due to difficulties faced by taxpayers in electronic filing. The latest extension, as per Circular No. 7/2024 dated 25.04.2024, extended the deadline to 30.06.2024. The Tribunal concluded that the same extension should apply to Form 10AB for final approval under Section 80G(5).

Conclusion:
The Tribunal set aside the CIT(E)'s order, remanding the matter back for re-consideration on merits. The Tribunal highlighted that the intention of the CBDT's circulars was to alleviate genuine hardship, and thus, the timeline for filing Form 10AB should be treated as directory. The appeal was allowed for statistical purposes, directing the CIT(E) to re-decide the issue after giving due opportunity of hearing to the assessee.

Order Pronounced:
The order was pronounced in the open court on 12-06-2024.