Final Registration Application under section 80G(5) Rejected due to Delay in Filing Form 10AB: ITAT Orders Fresh Adjudication [Read Order]

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) ordered fresh adjudication on the Grow Foundation's final registration application under Section 80G(5), which had been rejected by the Commissioner of Income Tax (Exemption) [CIT(E)] due to the delayed filing of Form 10AB.

Grow Foundation,the appellant-assessee, filed Form No.10AB on 28.08.2023 under section 80G(5). Although the trust was registered on 01.09.2013, it received provisional approval on 16.09.2022 under clause (iv) of the first proviso to sub-section (5) of section 80F, valid until AY 2025-26.

The  CIT(E) noted that the trust’s activities began in 2018-19, and the application should have been filed by 30.09.2022. Since it was submitted late, the application was rejected as non-maintainable.

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The CIT(E) rejected the assessee's application for failing to file Form 10AB under section 80G(5) within the required time frame. Although provisional approval was granted, the assessee did not file the form by the deadline of 30.09.2022, as mandated by law. The CIT(E) cited the Kolkata Tribunal's ruling in a similar case, confirming that no authority could condone such delays without statutory provisions.

Despite claiming a start date of 28.08.2023, financial records showed the trust had been operational since FY 2018-19. As a result, the application was rejected, and the provisional approval was canceled. The assessee filed an appeal before the tribunal aggrieved by the decision of CIT(E).

The tribunal considered whether the time limit for filing Form 10AB for registration under Section 80G(5) of the Act, which was extended to 30.09.2022, could be interpreted as also being extended to 30.09.2023. Circular No. 6/2023 extended the deadline for Section 12AB registration, but not for Section 80G(5). The Tribunal examined this issue to determine if the extension for one could apply to the other.

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The appellate tribunal in the case of Adani Education Foundation considered whether different timelines should apply for filing Form 10AB for registration under Sections 12AB and 80G(5) of the Act. The Tribunal referred to its earlier ruling and observed that there was no reason for such a distinction. It held that procedural provisions should serve justice, and technicalities should not hinder it.

The CBDT has extended the due date for filing Form No. 10A and Form No. 10AB under the Income Tax Act to 30.06.2024, as stated in Circular No. 7/2024 dated 25.04.2024. This extension addresses difficulties faced by taxpayers in electronic filing. It applies to both new applications and pending applications that were previously rejected solely for late submission or incorrect section codes. Additionally, existing trusts that failed to file Form No. 10A for AY 2022-23 may now apply for registration within the new deadline.

The tribunal restored the matter to the CIT(E) for de novo consideration, noting that the assessee filed for final approval under Section 80G(5) on 28.04.2023. It recognized the deadline for filing had been extended to 30.06.2024 under Circular No. 7/2024.

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The two member bench comprising Siddhartha Nautiyal (Judicial Member) and Makrand Vasant Mahadeokar (Accountant Member) concluded that the application could not be denied for not being submitted by 30.09.2023, and the tribunal directed the Ld. CIT(E) to provide the assessee a hearing before making a decision.

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