ITAT orders Reconsideration of 80G Application Rejection by CIT(E), citing CBDT Circular on Extended Deadlines [Read Order]

In a recent ruling, the Jaipur bench of the Income Tax Appellate Tribunal ( ITAT ) ordered reconsideration of the rejection of the application filed under 80 G of the Income Tax Act, 1961 by the Commissioner of Income Tax (Exemption) [ CIT(E) ], citing the CBDT circular on extended deadlines.

The assessee, Shree Ji Sewa Sansthan Lawa Lawa Malpura, filed an online application on 30.09.2023 in Form No. 10AB seeking approval u/s 80G of the Income Tax Act, 1961.

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The Commissioner of Income Tax (Exemption) [ CIT( E) ] noted that under clause (iii) of the first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961, applicants with provisional registration under clause (iv) must file Form No. 10AB within six months before the provisional approval expires or within six months of starting activities, whichever is earlier. These time limits are mandatory, and the Commissioner has no power to condone delays in filing. Based on the above findings, the CIT( E ) rejected the application as it was filed beyond the statutory time limit. 

The counsel on behalf of the assessee contended that according to the circular no. 7/2024 dated 25.04.2024, by the Central Board of Direct Taxes ( CBDT ), it had extended the time limit for filling the application for 80G for those trusts that could not file the same within six months.

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The bench observed that the CIT( E ) has no power to condone the delay in filing the application in Form No. 10AB, and the above-mentioned time limit of filling the application for recognition under Section 80G of the Income Tax Act, 1961 had been extended by the CBDT up to 30.06.2024.

The ITAT observed that ‘But in fact the assessee applied on 30.09.2023 and therefore, the reasons advanced that ld. CIT(E) has no power to condone the delay but when the same has been extended by the CBDT vide aforesaid circular, the benefit of that circular cannot be denied to the assessee.’

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The bench observed that the matter required a fresh consideration due to the CBDT circular

and remanded the issue of the trust's recognition to the CIT(E) to decide according to the law after giving the assessee an opportunity to be heard.

The ITAT, comprising Dr. S. Seethalakshmi ( Judicial Member ) and Mr. Rathod Kamlesh Jayantbhai ( Accountant Member ) allowed the appeal filed by the assessee for statistical purposes.

To Read the full text of the Order CLICK HERE

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