TMI Blog2024 (3) TMI 614X X X X Extracts X X X X X X X X Extracts X X X X ..... details and documents, before ld CIT(E), as and when required by ld CIT(E). For statistical purposes, the appeal of the assessee is treated as allowed. - Shri Pawan Singh, JM And Dr. A. L. Saini, AM For the Appellant : Shri Hardik Vora, AR For the Respondent : Shri Ravi Kant Gupta, CIT(DR) ORDER PER DR. A. L. SAINI, AM: Captioned appeal filed by the assessee, is directed against the order passed by the Learned Commissioner of Income Tax (Exemption), Ahmedabad, [in short the ld. CIT(E) ], wherein the ld. CIT(E) rejected the application filed by the assessee in Form No.10AB, u/s. 80G(5) of the Income Tax Act, (in short the Act ) vide order dated 28.06.2023. 2. The grounds of appeal raised by the assessee are as follows: 1. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Exemption) has erred in rejecting application for registration u/s. 80G(5) of the Act. 2. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Exemption) has erred in rejecting application for registration u/s. 80G(5) without considering that the application was filed within six months of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... day of April, 2021; (it) where the institution or fund is approved and the period of such approval is due to expire, at least six months prior to expiry of the said period; (iii) where the institution or fund has been provisionally approved, at least six months prior to expiry of the period of the provisional approval or within six months of commencement of its activities, whichever is earlier; **[(iv) in any other case, where the activities of the institution or fund have- 1. not commenced, at least one month prior to the commencement of the previous year relevant to assessment year from which the said approval is sought, 2. commenced and where no income or part thereof of the said institution or fund has been excluded from the total income on account of applicability of sub-clause (iv) or sub-clause (v) or sub-clause(vi) or sub-clause (via) of clause (23C) of section 10, or section 11 or section 12, for any previous year ending on or before the date of such application, at any time after the commencement of such activities,]. **The said clause (iv) of first proviso to sub-section (5) of section 80G of the Act has been substituted by the Finance Act 2023, w.e.f. 01/10/2023 and pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be filed on or before 31st March, 2022. c. Thereafter, once again the CBDT vide Circular No. 8/2022 dated 31.03.2022 on consideration of difficulties in electronic filing of Form No.10AB as stipulated in Rule 2C or 11AA or 17A of the Income Tax Rules, 1962, stipulated that The application for registration or approval under section 10(23C), 12A or 80G of the Act, in Form No. 10AB, for which the last date for filing falls on or before 29th September, may be filed on or before 30th September, 2022. d. Thereafter, in order to mitigate the genuine hardship, the CBDT vide Circular No. 6/2023 dated 24.05.2023, further extended the date of filing of Form 10A, in case of an application u/s. 10(23C), 12A 80G, till 30.09.2023, where the due date for making such application has expired prior to said date. Similarly, in order to mitigate the genuine, the CBDT vide Circular No. 6/2023 dated 24.05.2023 stipulated that Form No. 10AB, in case of an application under clause (iii) of the first proviso to clause (23C) of section 10 or under sub-clause (iii) of clause (ac) of sub-section (1) of section 12A of the Act, till 30.09.2023 where the due date for making such application has expired prior t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted as non-maintainable. 7. In response to the above, the assessee vides its response dated 19/06/2023 has submitted its reply and the same are reproduced hereunder: 1) With reference to our application filed by our Trust u/s. . 80G(5)(iii) of the Income Tax Act, 1961(the Act ), vide Notice dated 08.06.2023, your honour has observed that as per submission filed on 02/ 05/2023 the trust has commenced its activities on 07/11/2022 however the financial statement for FY-21-22 shows that the trust has received donation and incurred expenses and that the activities of the applicant has commenced long back and directed us to explain as to why the present application filed u/s. 80G(5)(iii) in Form 10AB should not be treated as not filed within due date specified in the Act and why the same should not be rejected as non-maintainable. In this regard we submit as under: 2) We have filed present application in Form 10AB as per the Clause (iii) of First Proviso to sub-section 5 of Section 80G. Clause (iii) of First Proviso to Section 80G(5) reads as under: Provided that the institution or fund referred to in clause (vi) shall make an application in the prescribed form and manner to the Princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e trust at Rs.46,275/-, in F.Y.2021-22. The above said facts clearly prove that the activities of the assessee have commenced long back and therefore, the assessee was required to file the present application in form 10AB on or before the extended time i.e. 30/09/2022 allowed by CBDT vide circular No.8/2022 whereas it has been filed on 02/12/2022. Therefore, the present application in Form No.10AB u/s. 80G(5) of the Act has not been filed within the time limit prescribed therein and therefore, the same is liable to be rejected as such as non-maintainable. In view of the above, the assessee`s application filed in Form No.10AB under section 80G(5) of the Act was rejected as non-maintainable by ld CIT(E). 9. Aggrieved by the order of ld. CIT(E), the assessee is in appeal before us. 10. Learned Counsel for the assessee, argued that provisions of Section 80G(5)(iii) have not defined the meaning of Commencement of activities. The assessee-trust has actually taken steps for pursuing the objectives on 07/11/2022, which should be treated as the date of commencement of activities. Hence, trust has field the application in Form 10AB, on 02/12/2022, which is well within the due date, i.e. with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed prior to such date; (ii) Form No.10AB, in case of an application under clause (iii) of the first proviso to clause (23C) of section 10 or under sub-clause (iii) of clause (ac) of sub-section (1) of section 122A of the Act, till 30.09.2023 where the due date for making such application has expired prior to such date. 15. However, in earlier Circular 8/2022, which was issued on 31.03.2022 the CBDT has given instruction about approval 80G(5) of the Act, which is reproduced below: 1. On consideration of difficulties in electronic filing of form No.10AB as stipulated in Rule 2C or 11AA or 17A of the Income-Tax Rules, 1962 w.e.f. 01.04.2021, the Central Board of Direct Taxes (CBDT), in exercise of its powers under Section 119(1) of the Act, extends the due date for electronic filing of such Form as under: (i) The application for registration or approval under Section 10(23C), 12A or 80G of the Act in form No.10AB, for which the last date for filing falls on or before 29th September, 2022, may be filed on or before 30th September, 2022. 16. Thus, in the Circular No.8/2022 dated 31.03.2022, cited above, there is mention about Section 80G of the Act (in form No. 10AB) for registration or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Bhamashah Sundarlal Daga Charitable Trust (supra) is reproduced below: 10.1 In this background, we need to read the sub-clause (iii) of the Proviso to Section 80G(5) of the Act. For ready reference it is again reproduced here under: (iii) where the institution or fund has been provisionally approved, at least six months prior to expiry of the period of the provisional approval or within six months of commencement of its activities, whichever is earlier 10.2 The sub-clause says that the Institution which have provisional registration have to apply at-least six months prior to expiry of the provisional registration or within Six months of commencement of activities, whichever is earlier. 10.3 In continuation of this when we read the sub clause iii of Proviso of section 80G(5), which we have already reproduced above, it is clear that the intention of parliament in putting the word or within six months of commencement of its activities, whichever is earlier is in the context of the newly formed Trust/institutions. For the existing Trust/Institution, the time limit for applying for Regular Registration is within six months of expiry of Provisional registration if they are applying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contractual obligation undertaken by him. It is difficult to conceive of any rational reason why the Legislature should have thought it fit to impose liability to tax on an assessee who is bound by law to carry out his contractual obligation to sell the property at the agreed price and honestly carries out such contractual obligation. It would indeed be strange if obedience to the law should attract the levy of tax on income which has neither arisen to the assessee nor has been received by him. If we may take another illustration, let us consider a case where A sells his property to B with a stipulation that after sometime, which may be a couple of years or more, he shall resell the property to A for the same price. Could it be contended in such a case that when B transfers the property to A for the same price at which he originally purchased it, he should be liable to pay tax on the basis as if he has received the market value of the property as on the date of resale, if, in the mean-while, the market price has shot up and exceeds the agreed price by more than 15 per cent. Many other similar situations can be contemplated where it would be absurd and unreasonable to apply section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) to treat the application as filed within statutory time and verify assessee s eligibility as per the Act. The ld.CIT(E) shall grant opportunity to the assessee. Assessee shall be at liberty to file all the necessary documents before the ld.CIT(E). 14. Accordingly, the appeal of the assessee is allowed for statistical purpose. Since we have set aside to Ld.CIT(E), we do not intend to adjudicate each ground separately. 18. We note that the Co-ordinate Bench of ITAT Jodhpur in the case of Bhamashah Sundarlal Daga Charitable Trust (supra) dealt with only the issue/terminology of whichever is earlier which is applicable to new trust which have created recently, and it does not deal with condonation of delay in case of old trust who made the application before ld CIT(E ) very late, that is, the issue mention in clause (iii) of 3rd proviso of section 80(5), where the institution or fund has been provisionally approved, at least six months prior to expiry of the period of the provisional approval.. has not been adjudicated. 19. Now the next question before us is that whether Tribunal has power to condone the delay in filing the Form No.10AB, u/s. 80G(5) of the Act. The Tribunal is a fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und that Sikri was not taking adequate steps to remedy the situation; it has also referred to the police complaints filed not only by the assessee-society against Sikri, but also to the complaint filed by the income tax authorities against Sikri which indicated that they also viewed Sikri to be responsible for the misrepresentation, fake certificates of registration, etc. Moreover, the Tribunal has taken note of the fact that the Metropolitan Magistrate, acting on the police complaint, remanded Sikri to custody and also referred to the fact that in the bail application, Sikri had again owned up responsibility for the fake certificates of registration. Taking an overall view of the facts and going by the preponderance of probabilities, the Tribunal came to hold the view that it was because of the irregularities, illegalities and misrepresentations of Sikri that the assessee-society was led to believe that appropriate applications under the Act were already filed with the income tax authorities for registration. The assessee-society was thus under the belief, though mistaken but honest, that there was no delay and once it came to know on 06.12.2005 about the irregularities on a compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of only a part of the evidence and ignoring the remaining evidence cannot be regarded as conclusively determining the questions of fact raised before the Tribunal. 20. We are satisfied that the Tribunal has, in making its decision, kept in mind the aforesaid principles adumbrated by the Supreme Court. Its order cannot, therefore, be branded as perverse or unreasonable or irrational. 21. That takes us to the question as to whether in condoning the delay the Tribunal committed any error of law or illegality. There is a wealth of judicial literature on the subject of condonation of delay and most of the cases have arisen under section 5 of the Limitation Act, 1963. The principles that are to be applied are, however, no different whenever the question of condonation of delay comes up for consideration under other statutes. In the oft quoted judgment of the Supreme Court in Collector, Land Acquisition v. MST. Katiji [1987] 167 ITR 471 it was observed as follows: - The Legislature has conferred the power to condone delay by enacting section 5 of the Limitation Act of 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on the merits . The expres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found that the assessee-society has taken prompt remedial action and put Sikri on the dock and he also admitted his fault, though he tried to shift the blame to his employee whose whereabouts were never known. Even in his bail application he had confessed to his role in the alleged irregularities and illegalities. There has been no want of bona fides on the part of the assessee, nor did it fail to take immediate action once it was apprised of the irregularities in its affairs by M. P. Mansinghka Trust of Mumbai. In these circumstances, we are unable to say that the Tribunal committed an error in condoning the delay. 24. On the question of perversity of the decision of the Tribunal we may also refer to the judgment of the Supreme Court in Sree Meenakshi Mills Ltd. v. CIT [1957] 31 ITR 28 . In that judgment, it was noted that only a question of law can be referred for decision of the Court and the decision of the Tribunal on a question of fact can be challenged only if it is not supported by any evidence, or is unreasonable or perverse. The following pithy observations of T.L. Venkatarama Aiyar, J. speaking for the Court are relevant: - ....................... The point for decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e adopted by us in the present case. At best, what can be argued by the Revenue is only that another view was possible to be taken by the Tribunal and this Court should prefer the alternative view on the same facts and evidence and discard the Tribunal's view. Obviously the argument cannot be upheld, having regard to the above judgments. 27. For the above reasons we answer the substantial questions of law framed in ITA Nos.754, 773 and 775 of 2010 in the negative, against the Revenue and in favour of the assessee. Consequently the sole substantial question of law framed by us in ITA Nos.1092, 1101, 1103, 1104, 1112 and 1124 of 2010 is answered in the affirmative, against the Revenue and in favour of the assessee. The C.M. Application is disposed of. The appeals of the Revenue are accordingly dismissed with no order as to costs. 20. Respectfully following the judgement of the Hon ble Delhi High Court in the case of Vishwa Jagriti Mission (supra), wherein the delay in filing application for registration u/s. 12A, was allowable / condoned, hence, we condone the delay in filing Form10AB, u/s. 80G(5), and remit the matter back to the file of Ld.CIT(E) with the direction to decide th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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