Vallab Yuyak Parishd Vs CIT (E) (ITAT Varanasi)
Summary: The appeal was filed by Shree Vallab Yuyak Parishd against the order dated 24.12.2024 passed by the Commissioner of Income Tax (Exemption), whereby the assessee’s application for registration under section 80G(5)(ii) of the Income Tax Act, 1961 was rejected. The assessee had filed the application in Form No. 10AB on 29.06.2024.
The assessee had earlier been granted provisional registration under section 80G(5)(iv) on 05.04.2022, valid from AY 2022-23 to AY 2024-25. The CIT(E) observed that section 80G(5)(ii) applied to trusts or institutions already registered under section 80G(5) for five years where the period of such registration was due to expire. Since the assessee held only provisional registration, the CIT(E) considered the application under section 80G(5)(ii) premature and non-maintainable. The application was accordingly rejected, while the provisional registration under section 80G(5)(iv) remained undisturbed. The provisions relating to section 80G and Form No. 10AB are materially relevant to the application process.
Before the Tribunal, the assessee’s counsel submitted that notice of the appeal fixation had been received shortly before the hearing and therefore the necessary records and Paper Book could not be compiled. An adjournment was sought. The Departmental Representative, however, submitted that the CIT(E) had not recorded any adverse inference against the assessee or withdrawn any existing exemption. According to the Revenue, the application had merely been rejected because it was made under the wrong section, and the assessee could file a fresh application under the correct section for consideration in accordance with law.
The Tribunal examined the statutory position and noted that the assessee had provisional registration under section 80G(5)(iv) from 05.04.2022 to AY 2024-25. It observed that section 80G(5)(iii) required an application for permanent registration to be filed before expiry of the provisional registration and at least six months before the date of expiry. The Tribunal therefore observed that the assessee had filed its application within the applicable period.
The Tribunal further noted that the CIT(E) had issued a detailed questionnaire concerning the assessee’s activities before rejecting the application, but had not recorded any adverse finding against the assessee. The Tribunal therefore presumed, from the order, that no adverse material had been gathered which would otherwise disqualify the assessee from obtaining registration. The difficulty arose because the assessee had filed the application under section 80G(5)(ii) instead of section 80G(5)(iii), resulting in its rejection as non-maintainable.
Considering that the period for filing the application under section 80G(5)(iii) had subsequently lapsed, the Tribunal held that it would be in the interest of justice to restore the matter to the CIT(E). It directed that the application made under section 80G(5)(ii) may be considered as an application under section 80G(5)(iii) and decided accordingly. The Tribunal also permitted the CIT(E), if considered necessary, to obtain a fresh application from the assessee under the correct section and thereafter examine the matter in accordance with law. The issue was consequently restored to the file of the CIT(E).
The appeal was consequently allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT VARANASI
This is an appeal filed by the assessee against the order of the ld. Commissioner of Income Tax (Exemption) dated 24.12.2024 wherein the learned CIT(E) has rejected the application of the assessee for registration under section 80G(5)(ii) of the Income Tax Act, 1961 (the Act). The grounds of appeal are as under:-
“1. BECAUSE, on the facts and in circumstances of the case Ld CIT Exemption has erred for rejecting the application filed for granting registration u/s 80G(5) (ii) of the I.T. Act 1961 in form No. 10AB on dated 29.06.2024.
2. BECAUSE, on the facts and in circumstances of the case order passed by the authorities below is against the principle of natural justice & equity and also without giving proper opportunity of being heard.”
2. The facts of the case are that the assessee’s Society filed an application on 29.06.2024 for registration under section 80G(5)(ii) of the Act in Form No. 10AB. The learned CIT(E) noted that such provisions were applicable in respect of Trust or Institutions that had already been registered under section 80G(5) for a period of five years and the period of such registration was due to expire. On the other hand, the assessee had only been granted provisional registration on 05.04.2022, which was valid from AY 2022-23 to AY 2024-25 and therefore the application under section 80G(5)(ii) was found to be premature and non-maintainable. Accordingly, it was rejected though the provisional registration granted under section 80G(5)(iv) was left undisturbed.
3. The assessee is aggrieved at this rejection on its application and has accordingly filed an appeal before us.
4. Shri Archit Pandey, Advocate appearing on behalf of the assessee submitted that he had only been informed about the appeal fixation date just before hearing and therefore unable to compile the necessary records / Paper Book. Accordingly, he prayed for an adjournment in the matter. However, Shri Deepak Yadav, Learned Sr. D.R. pointed out that the learned CIT (E) had not cast any adverse inference upon the assessee or withdrawn any existing exemption, but had only rejected the present application because it was made under a wrong section. He submitted that the assessee could always file a fresh application under correct section and the same would be considered in accordance with law.
5. We have duly considered the facts and circumstances of the case and the arguments placed before us. We note that the assessee had been granted provisional registration under section 80G(5)(iv) on 05.04.2022 which was valid from the AY 2022-23 to AY 2024-25. The provisions of section 80G(5)(iii) required that before such provisional registration expires, the assessee should file an application for permanent registration at least six month before the date of expiry. Accordingly, had filed the application on time. We also note that before rejecting the application, the learned CIT(E) had issued a detailed questionnaire to the assessee regarding its activities but subsequently he has not recorded any adverse findings against the assessee in his order of rejection. From the same we presumed that no adverse material was gathered against the assessee that would otherwise disqualify it from obtaining the registration. However, as the assessee made the application under a wrong section i.e. 80G(5)(ii) instead of section 80G(5)(iii), the said application was rejected as non-maintainable.
6. Considering the fact that the time period for filing the said application under section 80G(5)(iii) has since lapsed, we believe it to be in the interest of justice to restore this matter back to the file of the learned CIT(E) with a direction that the said application made under section 80G(5)(ii) may be considered to be an application under section 80G(5)(iii) and decided accordingly. If the learned CIT(E) feels it necessary, he may obtain fresh application from the assessee under the correct section and thereafter examine the matter in accordance with law. Accordingly, with the aforesaid comments the issue is restored to the file of the learned CIT(E).
7. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced on 31.08.2026 in the open Court.
