Medical College Development Society Vs CIT (Exemption) (ITAT Surat)
ITAT Surat held that rejection of application for regular approval of fund under section 80G(5) of the Income Tax Act as time barred not justified in terms of relaxation of time period as per CBDT Circular no. 7/2024 dated 25.04.2024. Thus, appeal allowed.
Facts- This appeal by assessee is directed against the order of Ld. Commissioner of Income-Tax (Exemption), Ahmedabad passed u/s. 80G(5) of Income Tax Act, 1961 in rejecting application for approval funds dated 27.05.2023. Notably, CIT(E) rejected the application of assessee on 27.05.2023 by taking view that application is time barred and it should have been made on or before 30.09.2022. Thereafter, rectification application filed under section 154 was also rejected.
Conclusion- Held that the sole ground for rejection of approval of fund is that it was filed beyond time period extended by the CBDT vide its Circular No. 8/2022, wherein time period for filing application for regular approval of fund under Section 80G(5) was extended up to 30/09/2022. We find that the CBDT in its Circular No. 7/2024 dated 25.04.2024 extended the time period upto 30.06.2024 for seeking approval under section 80G(5). When the CBDT issued Circular dated 25/04/2024, the application of assessee was pending consideration before the ld. CIT(E). Thus, the ld. CIT(E) should have allowed the relaxation of time period as per CBDT Circular No.7/2024 dated 25.04.2024. Considering the peculiar facts of the case and the fact that the assessee trust is an instrument of State Government and fulfilled all the conditions for availing approval under Section 80G(5), therefore, the ld. CIT(E) is directed to issue approval of fund under Section 80G(5) in favour of assessee. In the result, the grounds of appeal raised by the assessee are allowed.
