Case Law Details
Prayas Charitable Trust Vs CIT (ITAT Ahmedabad)
In the case Prayas Charitable Trust vs. CIT, ITAT Ahmedabad addressed an appeal by Prayas Charitable Trust challenging the rejection of its 80G(5) approval application due to a delayed filing of Form 10AB. The CIT (Exemption) had originally denied the application, citing non-maintainability because the trust missed the filing deadline of November 20, 2022. The trust argued that the delay was due to unavoidable circumstances and requested condonation. However, the CIT(E) maintained that it lacked authority to condone such delays.
A recent circular from the CBDT (Circular No. 7/2024, dated April 25, 2024) allowed entities like Prayas Charitable Trust to refile Form 10AB. In light of this new guidance, the ITAT restored the trust’s application to the CIT(E) for fresh review. The tribunal directed the CIT(E) to reevaluate the case without dismissing it solely based on the previous filing delay and to give the trust an opportunity to present its case. This decision allows Prayas Charitable Trust another chance to seek 80G(5) approval for tax-exempt status, supporting the trust’s charitable objectives under updated procedural flexibility.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Exemption), (in short “Ld. CIT(E)”), Ahmedabad vide order dated 13.03.2024.
2. The Assessee has taken the following grounds of appeal:-
“1. The learned Commissioner of Income Tax (Exemption) has erred in rejecting the application filed by the Appellant Trust on the ground that the application filed in Form 10AB has not filed within time limit prescribed and therefore it is non-maintainable. On facts and circumstances of the case, the action of Ld. CIT(Exemption) of rejecting the application filed u/s. 80G(5) of the Act is incorrect and unlawful and the approval u/s. 80G(5) of the Act ought to have been granted to the Appellant Trust. The same please be held now.
2. The learned Commissioner of Income Tax (Exemption) has erred in rejecting the application filed u/s 80G(5)(iii) of the Act stating that the delay in filing of application cannot be condoned by him. It is submitted that the delay in filing of Application u/s 80G(5)(iii) in only because of bonafide reasons and circumstances prevailing beyond the control of the Appellant Trust at that time. On facts and circumstances of the case, it is prayed before your honours that delay in application filed in Form 10AB u/s 80G(5)(iii) of the Act dated 30-09-2023 may please be condoned and necessary directions may please be given to Ld. CIT(Exe.) for granting approval u/s. 80G(5)(iii) considering merits of the case. The same please be held accordingly.
3. The order passed by the learned Commissioner of Income Tax (Exemption) is bad in law and contrary to the provisions of law and facts. It is submitted that the same be held so now.
4. Your appellant craves leave to add, alter and/or to amend all or any of the grounds before the final hearing.”
3. At the time of hearing none appeared on behalf of the assessee.
4. In the present case the assessee got provisional approval under Section 80G(5)(iii) of the Act and was required to file application in Form No.10AB. The due date for filing of Form No. 10AB was 20.11.2022 which the assessee failed to adhere, which laid to dismissal of the application by the Ld. CIT(E) as non-maintainable.
5. As per Circular No. 7/2024 dated 25.04.2024 the Board has allowed filing for fresh application in Form No. 10AB. The Ld. CIT(E) may decide the case of the assessee considering the Boards Circular.
6. In view of the above observations, the matter is restored to the file of CIT(Exemptions), for de-novo consideration, after giving due opportunity of being heard and with the direction not to disentitle the assessee for grant of registration only on the grounds as mentioned in its order for rejecting the application filed by the assessee trust.
7. In the result, the appeal of the assessee is allowed for statistical purposes.
This Order is pronounced in the Open Court on 22/10/2024
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