2023 (11) TMI 1241 - AT - Income Tax

ITAT allows section 80G approval despite 2.5-month delay in Form 10AB filing for permanent registration

ITAT Jaipur allowed the appeal regarding denial of approval under section 80G despite a 2.5-month delay in filing Form 10AB application for permanent ... Denying the approval u/s 80G - delay on the part of the appellant in filing the application in Form 10AB - delay of about 2.5 months from the extended date of filing the application for obtaining the permanent registration u/s 80G(5)(vi) - HELD THAT:- There is no dispute as to the fact that assessee is provisionally registered till A.Y. 2024-25 vide order dated 27.10.2021. Thus it has complied with section 80G(5). The proviso to this section only deals with the procedure as to the filing of the application. The law of procedure has to be approached, understood and appreciated as a helpmate in the course of the process of administration of justice. Procedural provision should be so construed as to sub serve the course of justice and not to hinder it. It is a settled proposition of law that technicalities should not come in way in imparting the substantial justice. We get support of our this view from the decision of Hon’ble Supreme Court in case of S. Nagaraj & Others Vs. State Of Karnataka & Another [1993 (8) TMI 292 - SUPREME COURT] Though the assessee has filed the application of 2.5 months delay and the provisions registration was not cancelled merely for permanent registration the application filed delayed. The assessee has all the reasons for recognition u/s 80G of the Act at least from the date the assessee filed an application and therefore, we direct the ld. CIT(A) to decide the issue of registration u/s 80G of the Act in accordance with law from the date on which the assessee made an application for permanent registration - Appeal of the assessee is allowed for statistical purpose. Issues Involved:1. Rejection of application for approval under Section 80G(5) of the Income Tax Act.2. Delay in filing the application in Form 10AB.3. Procedural defects and their impact on substantive justice.Summary:Issue 1: Rejection of Application for Approval under Section 80G(5)The appellant's application for approval under Section 80G(5) was rejected by the Commissioner of Income Tax (Exemption) (CIT(E)) on the grounds of non-maintainability due to a delay in filing the application in Form 10AB. The appellant argued that the approval under Section 80G should follow naturally from their registration under Section 12A, and that the delay was unintentional and due to genuine difficulties.Issue 2: Delay in Filing the Application in Form 10ABThe appellant filed the application on 16.12.2022, whereas the activities commenced on 22.03.2015. The CIT(E) noted that the application should have been filed within six months of commencement of activities or six months before the expiry of provisional registration, whichever is earlier. The delay of more than six months was deemed a violation of Section 80G(5)(iii). The CIT(E) cited the case of Bishnupur Public Education Institute, where it was held that in the absence of statutory provision to condone the delay, the authority cannot condone it.Issue 3: Procedural Defects and Substantive JusticeThe appellant contended that procedural defects should not defeat substantive justice, citing various legal precedents. The appellant argued that the CIT(E) has inherent power to condone the delay unless specifically denied by statute. The appellant also pointed out that the delay was only 2.5 months from the extended date, and that the CIT(E) should have granted registration from the date of application rather than rejecting it entirely.Tribunal's Findings:The Tribunal noted that the appellant satisfied all conditions under Section 80G(5) and was provisionally approved. The Tribunal emphasized that procedural provisions should serve the course of justice and not hinder it. The Tribunal found that the CIT(E)'s reliance on the Kolkata ITAT decision was misplaced, as it pertained to Section 10(23C)(vi) and not Section 80G(5). The Tribunal concluded that the CIT(E) should have granted permanent registration from the date of the application despite the delay.Conclusion:The Tribunal directed the CIT(E) to grant registration under Section 80G(5) from the date the appellant filed the application for permanent registration. The appeal was allowed for statistical purposes.Order Pronounced:The appeal of the assessee was allowed for statistical purposes, and the order was pronounced in the open court on 28/10/2023.