Trust wins appeal after Section 80G(5) registration wrongly rejected for missing deadline

The ITAT Ahmedabad allowed the trust's appeal against rejection of its Section 80G(5) application for final registration. The application was filed on 28.03.2023, allegedly after the 30.09.2022 deadline. However, the tribunal found the trust had filed within six months of provisional registration as required, with the deadline extended to 30.06.2024 per Circular No. 7/2024. The matter was remanded to CIT(E) for fresh consideration with proper hearing opportunity. The appeal was allowed for statistical purposes.

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Issues Involved:
1. Rejection of application under Section 80G(5) due to late filing.
2. Interpretation of amendments and circulars regarding the timeline for filing Form 10AB.
3. Extension of deadlines for filing Form 10A/10AB under various circulars.

Detailed Analysis:

Issue 1: Rejection of Application under Section 80G(5) Due to Late Filing
The primary issue in this case is whether the application for final approval under Section 80G(5) of the Income Tax Act, filed by the assessee on 28.03.2023, was valid despite being submitted after the stipulated deadline of 30.09.2022. The Ld. CIT(E) rejected the application on the grounds that it was not filed within the prescribed period, stating, "the present application in Form No. 10AB u/s 80G(5) of the Act is rejected as non-maintainable and also provisional approval granted in Form No 10AC under clause (iv) of first proviso to sub-section 15 of section 80G vide URN AAAJT2666FF20221 is hereby cancelled."

Issue 2: Interpretation of Amendments and Circulars Regarding the Timeline for Filing Form 10AB
The assessee argued that the application was filed within the extended timeline as per Circular No. 6/2023 dated 24.05.2023, which extended the deadline to 30.09.2023 for filing Form 10AB. The ITAT observed that the amendments effective from 01.04.2021 required the application to be filed within six months of the commencement of activities or six months prior to the expiry of provisional approval. The ITAT noted, "there is no reason to provide for a distinction / different timeline for accepting application for grant of final approval in respect of grant of registration in Form No. 10AB for registration under Section 12AB of the Act and for grant of final registration under Section 80G(5) of the Act."

Issue 3: Extension of Deadlines for Filing Form 10A/10AB Under Various Circulars
The ITAT referenced several cases, including Adani Education Foundation and CIT-1982 Charitable Trust, where similar issues were discussed. The ITAT concluded that the timeline for filing Form 10AB should be treated as directory and not mandatory, especially considering the transitional nature of the amendments. The ITAT stated, "the CIT(Exemptions) should not have rejected the assessee's application in Form No.10AB only for this technical reason." Furthermore, the ITAT noted that the CBDT had extended the deadline for filing Form 10A/10AB to 30.06.2024 via Circular No. 7/2024 dated 25.04.2024.

Conclusion
The ITAT set aside the order of the Ld. CIT(E) and remanded the matter for re-consideration, stating, "the order of CIT(Exemptions) on this issue is set aside, and matter is remanded to the file of CIT(Exemption) for re-deciding the issue of grant of final registration under Section 80G (5) of the Act, on merits, as per law." The appeal of the assessee was allowed for statistical purposes, and the matter was restored to the file of Ld. CIT(E) for de-novo consideration after giving due opportunity of hearing to the assessee.

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