ITAT Condones 27-Day Delay and Accepted Trust’s Appeal u/s 80G Following CBDT Circular [Read Order]

In a recent ruling, the Surat Bench of the Income Tax Appellate Tribunal ( ITAT ) condoned a delay of 27 days and allowed reconsideration of a trust’s application for registration under Section 80G of the Income Tax Act, 1961.

Surat Sewa Foundation (assessee), a trust formed on 01.12.2021, received provisional registration under Sections 12A and 80G of the Income Tax Act, 1961. It applied for regular registration on 27.10.2023 but failed to respond to notices from  the Commissioner of Income Tax (Exemption) (CIT(E)), leading to rejection of its applications.

Read More: Advances given in Return for an Advantage by the Shareholder is not Dividend u/s 2(22)(e): ITAT

The assessee explained that activities had not begun due to ongoing construction and sought another chance to submit documents. Considering this, the Tribunal condoned a 27-day delay in appeal and provided a second chance by remanding the matter to the CIT(E) for fresh examination after giving the assessee a proper hearing.

Income Tax 2025: Will It Save You Money or Cost You More? Find Out Inside! - Click Here

But the assessee failed to submit the relevant documents for the registration of the trust.

CIT(E) passed ex parte orders, rejecting the application for failure to submit documents and cancelling provisional registrations.

The assessee’s counsel, Nilisha Shah, contended that since the activities of the trust  had not commenced, the deadline to apply for final registration under Section 80G(5) of the Income Tax Act, 1961, was 30.09.2024, making its application dated 27.10.2023 valid.

Read More: ITAT Allows Section 80P Deduction for Kerala University Co-op Society’s Bank Interest Income

The counsel submitted that although the CIT(E) rejected the application on the grounds of delay, a subsequent CBDT Circular No. 7/2024, dated 25.04.2024, extended the deadline to 30.06.2024. Therefore, the assessee urged that its earlier application be treated as valid under the extended deadline.

Income Tax 2025: Will It Save You Money or Cost You More? Find Out Inside! - Click Here

Meanwhile, Ravi Kant Gupta, the department’s counsel, argued that the assessee’s application for registration was filed late, beyond the prescribed deadline. The counsel added that the trust failed to apply in time, and the circulars issued later did not apply to the pertinent case.

Read More: Clarifications Circular on GST Rate and Classification as per 55th GST Council Meeting: AP Commercial Taxes Dept

After considering the submissions from both sides, the bench, led by Pawan Singh (Judicial Member)  and Bijayananda Pruseth (Accountant Member), observed that the assessee’s application had been rejected by the CIT(E) due to delay in filing.

However, CBDT Circular, issued earlier on 25.03.2024, had extended the deadline for such applications to 30.06.2024. The tribunal held that this extension, though not considered during the original proceedings, was clearly intended to benefit applicants in similar circumstances.

Income Tax 2025: Will It Save You Money or Cost You More? Find Out Inside! - Click Here

Referring to its earlier ruling in FI Foundation v. CIT(E) (2024), the tribunal held that the assessee’s application should be treated as having been filed within the extended time frame.

The tribunal thus  condoned the delay in filing the appeal and remanded the matter to the CIT(E) for a fresh consideration.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates