Infant India Vs CIT (Exemption) (ITAT Pune)
Summary: The Pune ITAT set aside the CIT(E)’s order rejecting Infant India’s Form No. 10AB application for approval under Section 80G and restored the matter for a fresh decision on merits. The assessee had filed the application on 09.10.2024 under clause (ii) of the first proviso to Section 80G(5). The CIT(E) treated it as non-maintainable because the assessee had only provisional approval, had not furnished the regular approval contemplated for an application under clause (ii), and the application was also considered delayed. The assessee explained that the wrong clause had been selected inadvertently and attributed the delay and incorrect filing to its inability to access necessary documents and compliance support after the Chartered Accountant handling the matter left the organisation.
The Tribunal noted that the CIT(E) had rejected the application without examining its substantive merits and without drawing an adverse inference regarding the assessee’s charitable activities. It also recorded the assessee’s submission that the provisional approval itself had been obtained under the wrong clause even though the trust was already in existence and carrying on activities, and that the subsequent application for regular approval was again filed under the wrong clause. The assessee was stated to hold a valid Section 12A registration for AYs 2022-23 to 2026-27.
Considering the totality of the circumstances, the ITAT remanded the matter to the CIT(E) to decide the application afresh on facts and law under the correct statutory provision, after permitting rectification and filing of supporting documents. The assessee was directed to fully cooperate and avoid adjournments except for sufficient cause. Separately, the Tribunal condoned a 176-day delay in filing the appeal, relying on Collector, Land Acquisition v. Mst. Katiji and Inder Singh v. State of Madhya Pradesh. The appeal was treated as allowed for statistical purposes.
Cases Discussed
- Collector, Land Acquisition vs. Mst. Katiji & Ors., (1987) 167 ITR 471 (SC) — Relied upon for condoning the 176-day delay in filing the appeal on sufficient cause.
- Inder Singh Vs. The State of Madhya Pradesh, 2025 Live Law (SC) 339 — Relied upon along with Mst. Katiji while condoning the delay; no exact verified TaxGuru case page was established.
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT PUNE
The appeal filed by the assessee is directed against the order dated 15.04.2025 of the Ld. Commissioner of Income Tax (Exemption), Pune [“CIT(E)”] whereby he rejected the application of the assessee filed before him on 09.10.2024 in Form No. 10AB under clause (ii) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961 (the “Act”).
2. There is a delay of 176 days in filing of this appeal before the Tribunal for which the assessee has filed an affidavit explaining the reasons for such delay. After hearing both the sides, we are of the view that the delay is attributable to the sufficient cause. We, therefore, in light of the decisions of the Hon’ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC) and in the case of Inder Singh Vs. The State of Madhya Pradesh reported in 2025 Live Law (SC) 339, condone the said delay and proceed to decide the appeal.
3. The brief facts are that on receipt of the assessee’s application filed in Form No. 10AB under clause (ii) of first proviso to section 80G(5) of the Act along with annexures thereto, with a view to verify the genuineness of the activities of the assessee and fulfillment of the conditions laid down in clauses (i) to (v) of section 80G(5) of the Act, the Ld. CIT(E) issued notice on 28.11.2024 through ITBA portal requesting the assessee to upload certain information/clarification contained therein by 17.12.2024. On verification of the details/documents filed by the assessee, the Ld. CIT(E) noticed various discrepancies which were communicated vide issue of another notice dated 04.03.2025 seeking compliance by 10.03.2025. The said discrepancies are reproduced below :
“(i) Kindly furnish evidences claiming expenses on charitable activities such as bills/vouchers/invoices alongwith photographs of charitable activities actually carried out by your trust.
(ii) It is seen that you have obtained the regular registration under section 12A(1)(ac)(i) of the Act but it seems that you have not submitted a copy of registration u/s 12A / 12AA prior to 01/04/2021. Kindly provide copy of 12A/12AA registration granted prior to 01/04/2021.
(iii) It is seen from your submission that you have not furnished note on activity giving details viz. dates and places of each activities carried out by you, details of beneficiaries, how they were identified, etc. As per the provisions of Rule 17A(2)(k) / 11AA(2)(h) of the Income Tax Rules, 1962, the application in Form No.10AB shall be accompanied by note on activities giving details of activities actually carried out but you have failed to comply with those provisions. You ought to be submit the details of actual activities carried out in the last 3 years or since inception, whichever is later. Further, the supporting evidence of the activities in the form bills and photographs are also not submitted by you. In absence of any such tangible material in respect of details and proof of activities being carried out, it is not possible to ascertain as to whether the activities are charitable and in line with the objects of the trust / institution.
(iv) You have not submitted details of donation in the requisite format. You were specifically requested to furnish year-wise list of all donations received (including corpus donations etc.) during the last 3 years / since inception, whichever is later viz. full name, complete Postal address & PAN of donor, date & mode of donation, amount, receipt No. issued by trust / institute and copies of donation receipts and directions from the donors, if any. Please furnish the same.
(v) It is seen from the financial statement that no credible evidence is furnished in support of the activities claimed to have been carried out and considering the fact that a very meagre / no expenditure is shown on charitable objects as compared to expenditure on establishment, the satisfaction about the genuineness of activities could not be arrived at. Kindly furnish your explanation with credible evidences.
(vi) It is seen from your submissions that the date of commencement of your activities is 07/06/2007. Further, as per the copy of order of provisional approval under section 80G(5) read with clause (iv) of first proviso to section 80G(5) of the Income Tax Act, 1961 submitted by you, the date of provisional approval is 24/09/2021. As per the provisions of clause (iii) of first proviso to section 80G(5) of the Income Tax Act, 1961, where a trust or institution has been provisionally approved under section 80G(5)(iv) of the Act, the application for regular approval under section 80G(5)(iv) is required to be filed within 6 months from the date of commencement of activities. Since, your activities were already commenced as on the date of provisional approval, you were required to file the present application within 6 months from the date of provisional approval i.e. on or before 23/03/2022. However, the present application filed by you is on 09/10/2024 i.e. after the expiry of period allowed under section 80G(5)(iii) of the Act. The extended due date for filing of such application was 30/06/2024 as per CBDT, Circular no 7/2024, dated 25/04/2024. Thus, it is seen that you have not filed the present application within the time limit allowed under clause (iii) of first proviso to section 80G(5) of the Income Tax Act, 1961. You are therefore, requested to show-cause as to why your application should not be rejected and the registration granted should not be cancelled.
(vii) Without prejudice to the above, it is seen that the date of expiry of provisional approval under section 80G(5)(iv) of the Act in your case is 31/03/2024. As per the provisions of clause (iii) of first proviso to section 80G(5) of the Act, where a trust or institution has been provisionally approved under section 80G(5)(iv) of the Act, the application for regular approval under section 80G(5)(iv) is required to be filed, at least six months prior to expiry of period of the provisional approval or within six months from the date of commencement of activities. Since, the period of provisional approval was due to expire on 31/03/2024, the present application was required to be filed before 30/09/2023. However, the present application filed by you is on 09/10/2024 i.e. after the expiry of period allowed under clause (iii) of first proviso to section 80G(5) of the Act. Thus, it is seen that you have not filed the present application within the time limit allowed under clause (iii) of first proviso to section 80G(5) of the Income Tax Act, 1961. You are therefore, requested to show-cause as to why your application should not be rejected and the registration granted should not be cancelled.
(viii) Without prejudice to the above, it is to inform that ‘Sub clause (ii) of clause (5) of section 80G’ is related to application for renewal of regular registration for a trust / institution which is having regular registration under section 12AB of the Act and ‘Sub clause (iii) of clause (5) section 80G is related to application for regular approval under section 12AB of the Act for the trust / institution which is having provisional registration under section 12AB of the Income Tax Act, 1961. The copy of order furnished by you is actually an order of provisional approval under section 12AB read with section 80G(5)(iv) of the Income Tax Act, 1961. Therefore, it is possible that you might have obtained provisional registration under section 12AB and while applying for regular registration ‘Sub clause (ii) of clause (5) of section 80G’ might have got erroneously selected in the present application instead of selecting ‘Sub clause (iii) of clause (5) of section 80G’. Please furnish your clarification along with supporting documents.”
3.1 The assessee furnished its reply to the said notice on 16.03.2025. On verification of the documents submitted by the assessee, the Ld. CIT(E) rejected the assessee’s application for statistical purposes treating the same as non-maintainable without going into the merits of the case and without drawing any adverse inference against the assessee by observing as under :
“6. The assessee responded to the said notice on 16/03/2025. On verification of the details / documents submitted by the assessee, it is seen that the assessee has not furnished the copy of REGULAR APPROVAL in form No.10AC under section 80G(5)(vi) read with clause (i) or clause (iii) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961 but submitted a copy of PROVISIONAL APPROVAL under section 80G(5)(vi) read with clause (iv) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961.
7. The present application is filed by the assessee under clause (ii) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961. The provisions of clause (ii) of first proviso to sub-section (5) of section 80G are related to application for renewal of regular approval of a trust or institution which is already having regular approval under section 80G(5)(vi) of the Act and the period of said registration is about to expire.
8. The assessee was specifically requested vide the initial notice to furnish the copy of order of regular approval under section 80G(5)(vi) of the Income Tax Act, 1961. Such copy is actually required to be furnished along with the application itself under the provisions of Rule 11AA(2)(e) of the Income Tax Rules, 1962. However, the assessee has neither submitted the same along with the application nor in response to the notice issued in this regard. Thus the assessee failed to furnish the same. The copy of order submitted by the assessee along with the present application is a copy of provisional approval under section 80G(5)(vi) read with clause (iv) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961 and not a copy of regular approval under section 80G(5)(vi) read with clause (i) or clause (iii) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961.
9. The non-submission of copy of order of regular approval under section 80G(5)(vi) of the Income Tax Act, 1961 establishes the fact that the prerequisite for application under clause (ii) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961 is not fulfilled in this case. Therefore, prima-facie it appears that the application is not maintainable.”
4. Aggrieved, the assessee is in appeal before the Tribunal raising the following grounds of appeal :
“1. The Learned Commissioner of Income Tax (Exemptions) [CIT(E)] erred in law and on facts in rejecting the assessee’s application for approval under section 80G of the Income-tax Act, 1961, without properly appreciating the genuine and reasonable cause that led to delay in filing and in partially responding to departmental notices.
2. The Learned CIT(E) failed to appreciate that the delay in fling the application arose solely because the Chartered Accountant who was entrusted with filing the application and handling regulatory compliances absconded without prior intimation, failing to provide required papers, passwords, and work handover. The organization was thus left without access to critical documents and compliance support, which constitutes a reasonable cause under section 273B.
3. The Learned CIT(E) failed to consider that due to unavailability of appropriate document with assessee, assessee erroneously made application under incorrect sub-clause of section 80G, which caused delay and incorrect submission by assessee.
4. The Learned CIT(E) erred in rejecting the application on purely procedural and technical grounds, without examining the substantive merits, genuineness of activities, and charitable nature of the assessee trust. It is a settled principle that procedural lapses should not be allowed to defeat substantive rights, particularly in beneficial provisions such as Section 80G.
5. The Learned CIT(E) failed to appreciate that the assessee trust is duly registered under section 12AB and that there were no adverse findings regarding its charitable objects, conduct of activities, maintenance of accounts, or compliance with statutory provisions. Once genuineness is not in dispute, 80G approval ought not to have been denied.
6. The above grounds of appeal may kindly be allowed to be amended, altered, modified etc in the interest of natural justice.”
5. The Ld. AR submitted that the Ld. CIT(E) rejected the assessee’s application only on technical ground without considering the merits of the case, genuineness of activities and charitable nature of the assessee trust. Giving the background of the case, the Ld. AR made the following submissions:
“The present appeal is directed against the order dated 15/04/2025 passed by the learned CIT(E), Pune in Form No. 10AD, whereby the Appellant’s application in Form No. 10AB was treated as non-maintainable and rejected for statistical purposes without adjudicating the claim on the correct legal footing.
The Appellant had originally obtained approval under section 80G on 31/05/2010 and thereafter, on account of the new registration regime introduced in 2021, obtained provisional approval dated 24/09/2021 under clause (iv) of the first proviso to section 80G(5), though such selection was inadvertent and under a wrong clause as the trust was already in existence and carrying on activities since long prior thereto.
Subsequently, the Appellant filed Form No. 10AB on 09/10/2024 for regular approval but owing to the same confusion in the portal-driven clause structure, the wrong clause was again selected. The learned CIT(E), instead of permitting correction of the procedural defect and examining the Appellant’s eligibility substantively, rejected the application as non-maintainable on the ground that regular approval under section 80G(5)(vi) had not been produced and that the application was not filed within time under the clause applicable to provisional approval cases.
The impugned order is unsustainable because it is founded on technicalities, internal contradiction, and failure to appreciate the Appellant’s pre-existing 80G approval history, the transitional effect of the amended law, and the curable nature of the wrong clause selection in Form No. 10AB.”
5.1 The Ld. AR submitted that the delay in filing of the application was due to the assessee’s inability to get access to the required documents and compliance support as the Chartered Accountant who was handling the matter had left the organization without any prior information to the organization. He submitted that it was only due to unavailability of the appropriate documents that the application was filed by the assessee erroneously under wrong clause, which caused delay and incorrect submission by the assessee.
5.2 He further submitted that the assessee has a valid section 12A registration which is subsisting from AY 2022-23 to AY 2026-27, a copy of which is placed on record. He, therefore, requested that the matter may be set aside to the file of the Ld. CIT(E) to consider the assessee’s application afresh on merits under the correct statutory provisions after permitting rectification and filing the supporting documents.
6. The Ld. DR supported the order of the Ld. CIT(E).
7. We have heard the Ld. Representatives of the parties and perused the material available on record. We find that the Ld. CIT(E) rejected the assessee’s application for statistical purposes treating the same as non-maintainable without going into the merits of the case and no adverse inference is drawn against the assessee. The assessee’s application has been rejected for the reasons that the application was delayed and it was filed under the wrong clause. We find that the Ld. CIT(E) held that because the assessee had not filed a copy of regular approval u/s 80G(5)(vi) of the Act, the prerequisite for an application under clause (ii) was not satisfied and hence the application was not maintainable. The Ld. CIT(E) has further observed that the assessee’s application is also barred by limitation. It is the submission of the Ld. Counsel for the assessee that the Ld. CIT(E) has rejected the assessee’s application merely on technical grounds without examining the substantive merits, genuineness of the activities and charitable nature of the assessee trust. The Ld. AR brought to our notice that the provisional approval itself was inadvertently obtained under the wrong clause because the trust was already existing and carrying on activities much prior thereto. Thereafter, the application for regular approval was also inadvertently filed under the wrong clause i.e. under clause (ii) of first proviso to section 80G(5) of the Act. The delay and filing under the wrong clause was caused due to the reasons stated above in the preceding paragraph. We find that the assessee is duly registered u/s 12A of the Act and having a valid registration certificate for the period AY 2022-23 to AY 2026-27, a copy of which is placed on record by the Ld. AR.
8. Considering the totality of the facts and in the circumstances of the case, we deem it fit, in the interest of justice, to set aside the order of the Ld. CIT(E) and remand the matter back to his file to decide the assessee’s application afresh on merits as per fact and law considering the same under the correct statutory provision after permitting rectification and filing of supporting documents by the assessee. Needless to say, the assessee shall provide full support to the Ld. CIT(E) in terms of filing the requisite details/documents/ evidence as may be required/called upon by the Ld. CIT(E) on the appointed date without taking any adjournment under any pretext whatsoever unless required for a sufficient cause, failing which the Ld. CIT(E) shall be at liberty to pass the appropriate order in accordance with law. The grounds raised by the assessee are accordingly allowed for statistical purpose.
9. In the result, the appeal of the assessee is treated as allowed for statistical purposes.
Order pronounced in the open court on 08th June, 2026.
