2024 (8) TMI 1464 - AT - Income Tax

Tribunal Overturns Rejection of Tax Registration, Citing Extension Circulars and Emphasizing Case-Specific Considerations.

The ITAT Pune partially allowed the appeal, setting aside the rejection of the appellant's regular registration application under section 80G(5) of the ... Rejection of regular/final 80G approval/registration as barred by limitation - Need to file regular 80G registration within a period of six months therefrom provisional registration granted - HELD THAT:- Appellant assessee was granted a provisional registration u/c (iv) of s/s (5) of section 80G by an order u/c (vi) of s/s (5) of section 80G of the Act by the CIT(E). Therefore, there remains no reason to draw out appellant’s case from claiming benefit of extended period for filing application for regular registration. The circular 08/2022 also clarified that the extended period upto 30/09/2023 shall apply even in cases, (i) where the application was rejected by the CIT(E) on or before issuance of this circular dt 24/05/2023 (ii) where due date for making/filing application has expired, on or before 30/09/2023. In addition to above, in reply to a specific query, the appellant spelt out the reasons beyond delayed filing of application, which in our considered view also formed sufficient & reasonable ground to condone the delay. We find in similar facts & circumstance, the co-ordinate benches allowed benefit of extended time period in Rotary Club of Akurdi Charitable Trust [2024 (10) TMI 1246 - ITAT PUNE], Shashvat Paediatric Care Foundation [2024 (3) TMI 1365 - ITAT PUNE], ‘Birmani Charitable Foundation’ [2024 (4) TMI 89 - ITAT PUNE] Swachh Vapi Mission Trust [2024 (3) TMI 614 - ITAT SURAT], TB Lulla Charitable Foundation [2024 (6) TMI 798 - ITAT PUNE] and Gujarat Hira Bourse & Ors [2024 (1) TMI 946 - ITAT SURAT] and Bhamashah Sundarlal Daga Charitable Trust [2023 (11) TMI 1210 - ITAT JODHPUR] Maintaining parity with former decisions, we hold the application of the appellant was filed well within the extended time limit and in consequence we set-aside the impugned order of rejection for remand with a direction to treat appellant’s application dt. 30/09/2023 as filed within the time limit prescribed u/c (iii) to first proviso to section 80G(5) of the Act r.w.c. 06/2023 and adjudicate the same on merits in accordance with law. Issues:- Rejection of regular registration under section 80G(5) of the Income Tax Act, 1961 on the ground of limitation.- Applicability of circulars issued by CBDT for extension of time limit for filing applications for regular registration.- Consideration of reasons for delay in filing application and the power to condone such delay.Analysis:The judgment by the Appellate Tribunal ITAT Pune involved the challenge against the rejection of regular registration under section 80G(5) of the Income Tax Act, 1961. The appellant's application for provisional registration was initially accepted, but the regular registration application was rejected by the Commissioner of Income Tax (Exemption) on the grounds of limitation. The Revenue contended that the delayed application was beyond the extended time allowed by CBDT Circular 08/2022. The Tribunal noted that the appellant's application for regular registration was filed after the stipulated period, leading to its rejection based on the limitation and absence of statutory provision for condonation of delay.The Tribunal delved into the applicability of circulars issued by the CBDT regarding the extension of time limits for filing applications for regular registration. Circular 08/2022 extended the time limit to file such applications, and Circular 06/2023 further extended the deadline due to system glitches faced by stakeholders. The Tribunal emphasized that the circulars covered cases falling under the relevant provisions of the Income Tax Act, including those related to provisional registration under section 80G(5)(iv).In analyzing the case, the Tribunal considered that the appellant was entitled to the benefit of the extended time period for filing the application for regular registration. The Tribunal found the reasons provided for the delay in filing the application to be sufficient and reasonable, especially considering similar cases where the extended time limit was granted. Citing various precedents where the benefit of the extended time period was allowed, the Tribunal held that the appellant's application was filed within the prescribed time limit as per the circulars and directed the authorities to adjudicate the application on its merits.Ultimately, the Tribunal partly allowed the appeal for statistical purposes, setting aside the order of rejection and remanding the case with directions to treat the appellant's application as filed within the time limit prescribed under the relevant provisions of the Act and circulars. The judgment highlighted the importance of considering the circumstances of each case and the applicability of circulars in determining the validity of applications for registration under the Income Tax Act.