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1. ISSUES PRESENTED AND CONSIDERED
1.1 Whether a third application in Form 10AB for registration under Section 12A/12AB, filed within the extended time allowed by CBDT Circular No. 07/2024, was maintainable when the immediately preceding rejection order was not based on delay or wrong section code.
1.2 Whether approval under Section 80G(5) can be granted in the absence of a valid and subsisting registration under Section 12A/12AB.
2. ISSUE-WISE DETAILED ANALYSIS
Issue 1: Maintainability of third Form 10AB application under CBDT Circular No. 07/2024
Legal framework
2.1 The Tribunal examined sub-clause (iii) of clause (ac) of sub-section (1) of Section 12A of the Act regarding registration of trusts, and Para 4.1 of CBDT Circular No. 07/2024 dated 25.04.2024. Para 4.1 permits a fresh application in Form 10AB where an earlier Form 10AB application has been rejected on or before the issuance of the Circular solely because (i) the application was furnished after the due date, or (ii) the application was furnished under the wrong section code, provided the fresh application is filed within the extended time (up to 30.06.2024).
Interpretation and reasoning
2.2 The Tribunal noted that: (a) the first Form 10AB application of the assessee was rejected on 18.02.2023 for having been filed under an incorrect section code; (b) a second application, filed under the correct section code, was rejected on 17.08.2023 for want of prosecution; and (c) the third, impugned application was filed within the extended deadline of 30.06.2024 and was rejected as non-maintainable on the ground that the earlier rejection dated 17.08.2023 did not fall within Para 4.1 of the Circular.
2.3 The Tribunal observed that even on the assessee's own statement of facts, the rejection order dated 17.08.2023 was passed for want of prosecution and not for either of the two grounds specified in Para 4.1 of the Circular (delay or wrong section code). Hence, the condition precedent for availing the relaxation under Para 4.1 was not satisfied in respect of the operative earlier order.
2.4 The Tribunal accepted the finding of the Commissioner (Exemptions) that the rejection order dated 17.08.2023 was the relevant earlier order and that it was not covered by Para 4.1 of the Circular. Consequently, the assessee's third application, though filed within the extended period, could not be entertained under the Circular and was rightly treated as non-maintainable.
2.5 It was recorded that the assessee's counsel fairly conceded that the appropriate remedy lay in challenging the rejection order dated 17.08.2023 passed for non-prosecution, rather than in filing a fresh application under the Circular. The Tribunal also indicated that the assessee remained free to avail any remedy in law against that order and that the authorities may consider the assessee's explanation for delay in such proceedings.
Conclusions
2.6 The Tribunal held that Paragraph 4.1 of CBDT Circular No. 07/2024 applies only where the earlier rejection of Form 10AB was solely on account of delayed filing or wrong section code. An earlier rejection for want of prosecution does not qualify.
2.7 The third Form 10AB application filed by the assessee within the extended time under the Circular was, therefore, non-maintainable, and the Commissioner (Exemptions) was justified in rejecting it. The denial of registration under Section 12A/12AB was accordingly upheld, and the appeal on this issue was dismissed.
Issue 2: Entitlement to approval under Section 80G(5) absent registration under Section 12A/12AB
Legal framework
2.8 The Tribunal considered that registration under Section 12A/12AB is a necessary prerequisite for grant of approval under Section 80G(5) of the Act.
Interpretation and reasoning
2.9 The Commissioner (Exemptions) had rejected the assessee's application for approval under Section 80G(5)(iii) on the ground that the assessee did not have a valid registration under Section 12A/12AB in Form 10AD or Form 10AC.
2.10 Having affirmed the order denying registration under Section 12A/12AB in the connected appeal, the Tribunal held that the foundational condition for grant of approval under Section 80G(5) remained unfulfilled.
Conclusions
2.11 In the absence of a valid subsisting registration under Section 12A/12AB, the assessee was not entitled to approval under Section 80G(5). The rejection of the assessee's Section 80G application was therefore upheld, and the appeal on this issue was dismissed.
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