The Chennai bench of the Income Tax Appellate Tribunal (ITAT) rejected the registration of the trust under Section 12A of the Income Tax Act, 1961, due to the delay in filing Form 10A.
The charitable trust, registered under Section 12AA of the Income Tax Act, 1961 since December 5, 1996, found itself entangled in a bureaucratic conundrum concerning the application for registration under Section 12AB of the Income Tax Act, 1961. It was brought to light that a recent amendment, effective from April 1, 2021, necessitated existing charitable trusts to seek registration under section of the Income Tax Act, 1961. Similarly, a parallel requirement was introduced for registration under Section 80G(5) of the Income Tax Act, 1961.
The trust submitted separate Form 10AB for registration under both Section 12A(1)(ac)(i) and clause (i) of the first provision to Section 80G(5), of the Income Tax Act, 1961 instead of the required Form 10A. The trust’s representative argued that although Form 10A and Form 10AB solicited similar information, the latter demanded additional details. Nonetheless, the Central Board of Direct Taxes (CBDT), recognizing genuine hardships faced by entities, later issued Circular No. 22 of 2022 on November 1, 2022, granting a reprieve by condoning the delay in filing Form 10A until November 25, 2022.
observed that the Commissioner of Income Tax ( Exemptions ) ( CIT(E) ) summarily dismissed the applicant’s request for registration, citing the absence of Form No. 10AC/10AD and deeming the application filed under section 10AB of the Act, seeking registration under Section 12A(1)(ac)(iv), of the Income Tax Act, 1961 as not maintainable.
concluded that the applicant had not submitted Form 10A as required, opting instead for Form No. 10AB, which was deemed a mere technical oversight. This breach could be rectified by permitting the applicant to file the necessary application in Form 10A along with the required details. Consequently, the appeal was overturned, and the matter was referred back to the CIT (E).
Hence, The two member bench of the tribunal comprising Manjunatha G ( Accountant member ) and Mahavir Singh ( Vice President ) set aside the appeal and the matter was remitted back to the file of the CIT (E) who will allow assessee to file application in form No. 10A along with other required details and the CIT (E) will examine entire aspect relating to registration under Section 12AB of the Income Tax Act, 1961 as well as under Section 80G of the Act and then will decide the appeal accordingly.
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