ANANDCARE CHARITABLE TRUST,THANE V. CIT, EXEMPTION CIRCLE, PUNE, PUNE

ITA 635/PUN/2025

AI Insights

The case involves Anandcare Charitable Trust, which appealed against the decision of the CIT (Exemption), Pune, rejecting their application for approval under section 80G of the Income Tax Act, 1961. The CIT (E) had rejected the application due to the trust inadvertently applying under the wrong sub-clause due to a system limitation. The Tribunal noted similar precedents where such errors were rectified and the matter was remanded for fresh consideration under the correct provisions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 397061 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2021-2022
• Other Referred Cases: Kimaya Ashram Charitable Trust Vs. CIT (Exemption), Help For Children In Need Foundation Vs. CIT (Exemption)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMOL KHAIRNAR
• Assessee Lawyers: RAJESH SHAH
• Keywords: Condonation of delay; Set aside; Charitable institution
• Section: 11; 80G

Judgement Text

" आयकर अपीलीय अधिकरण “ए” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI R.K. PANDA, VICE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / ITA No.635/PUN/2025 Anandcare Charitable Trust, 503, Srishti Complex Bldg-341, Srishti, Sector-3, Phase-III, Mira Road S.O. Chimane, Thane – 401107 PAN : AACTA5219M Vs. CIT (Exemption), Pune अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Rajesh Shah Department by : Shri Amol Khairnar Date of hearing : 14-05-2025 Date of Pronouncement : 28-05-2025 आदेश / ORDER PER ASTHA CHANDRA, JM : The appeal filed by the assessee is directed against the order dated 13.11.2024 of the Ld. Commissioner of Income Tax (Exemption), Pune [“CIT(E)”] whereby he rejected the application of the assessee filed on 22.05.2024 before him in Form No. 10AB under sub clause (B) of (iv) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961 (the “Act”). 2. The assessee has filed this appeal with a delay of 38 days. The assessee has filed an application for condonation of delay along with a sworn affidavit stating therein the reasons for delay in filing of the appeal. On perusal of the same, we are satisfied that the delay in filing of appeal is not intentional or deliberate but has occurred for the reasons mentioned in the affidavit. After hearing both the sides, we are of the view that the delay is attributable to the sufficient cause. We, therefore, condone the said delay and proceed to decide the appeal. 3. The assessee has raised the following grounds of appeal :- “1. The appellant request that delay in filing of an appeal by 24 days may be condoned. 2 ITA No. 635/PUN/2025 2. On facts and circumstances of the case and in law the learned CIT(E) erred in rejecting the application for approval u/s.80G of the act. 3. a) On facts and circumstances of the case and in law the learned CIT(E) erred in not considering the plea of the appellant that the application filed u/s 80G(5)(ii) be considered as application u/s.80G(5) (iv) (B) of the act. b) The learned CIT(E) ought to have considered the fact that the provisions of S.80G are very complex and it was an inadvertent mistake in applying the approval and granting the approval since the full details of the trust were available before the said authority. 4. On facts and circumstances of the case and in law the learned CIT(E) be directed to allow the approval under the provisions of S.80G of the act. 5. The appellant craves leave to add, amend, modify, substitute and/or cancel any of the ground of the appeal.” 4. Facts of the case in brief are that on receipt of assessee’s application along with annexures thereto, with a view to verify the genuineness of the activities of the assessee and fulfillment of conditions laid down in clause (i) to (v) of section 80G(5) of the Act, a notice was issued through ITBA portal on 24.06.2024 requesting the assessee to upload certain information/clarification contained therein. The assessee was requested to submit the compliance by 09.07.2024. The notice was duly served on the assessee through e-portal/email. The assessee responded to the said notice and on verifying the details furnished by the assessee, the Ld. CIT(E) found certain discrepancies and asked for their clarification which were communicated to the assessee by issue of another show cause notice on 15.10.2024 seeking compliance by 22.10.2024. It was specifically asked by the Ld. CIT(E) to show cause along with the supporting documents as to why the application should not be rejected and why the provisional registration granted earlier under section 80G(5) should not be cancelled as the application is filed u/s 80G(5)(iv)(B) of the Act but the same is not applicable to the assessee’s case. The assessee furnished its reply to the said notice on 22.10.2024 contending as under: “6. The assessee responded to the said notice through e-portal on 22/10/2024. The assessee's contention is reproduced hereunder for ready reference: \"we would like to submit the following: Clarification on Application under Clause (ii) of First Proviso to Section 80G(5): At the time of filing our application on 22/05/2024, we intended to apply under Clause (ii) of the first proviso to sub-section (5) of section 80G, as we believe that this is the appropriate provision applicable to our trusts case. However, due to a limitation in the system during the filing process, the only option available for selection was Sub-clause (B) of clause (iv) of the first proviso to sub-section (5) of section 80G. As a result, we inadvertently applied under this clause. Request for Consideration Under Clause (ii) of Section 80G(5): We kindly request that you please consider our application under Clause (ii) of the first proviso to sub-section (5) of section 80G, as this was our original intent. We apologize for the confusion caused by the system constraint during the 3 ITA No. 635/PUN/2025 application process and seek your kind intervention in granting the approval under the correct clause.” 5. The above submission of the assessee was not found to be acceptable by the Ld. CIT(E) who proceeded to pass the impugned order rejecting the application of the assessee by observing as under : “7. The contention of the trust is duly considered. However, the same is not found to be acceptable. It has been contended that the trust intended to apply under Clause (ii) of the first proviso to sub-section (5) of section 80G and due to system issue filed under Sub-clause (B) of clause (iv) of the first proviso to sub-section (5) of section 80G. 7.1 It may be noted that the provisions of section 80G(5)(ii) of the Act pertains to application for renewal of regular approval of a trust or institution which is already having regular approval under section 80G(5)(vi) of the Act and the period of said registration is due to expire. In the instant case, however, the applicant does not have any regular approval and has, in fact, applied under sub clause (B) of (iv) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961 seeking approval u/s 80G(5)(vi) of the Act. Therefore, the provisions of clause (ii) of first proviso to section 80G(5) of the Act are not applicable in its case. Also the applicant's request to consider said application as filed under section 80G(5)(ii) can also not be accepted since the application filed u/s 80G(5)(iv)(B) of the Act cannot be considered under another clause. 8. The present application is filed by the assessee u/s 80G(5)(iv)(B) of the Act. The extract of the said provision is reproduced herewith for ready reference: \"80G(5)(iv) - in any other case, where activities of the trust or institution have- (A) .....; (B) commenced and no income or part thereof of the said trust or institution has been excluded from the total income on account of applicability of sub-clause (iv) or subclause (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,\" 8.1 It can be thus seen that the provisions of said section applies to a case where activities of the trust or institution have 'commenced and no income or part thereof of the said trust or institution has been excluded from the total income on account of applicability of sub-clause (iv) or subclause (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. In the light of said provision, the submission of the assessee trust has been verified. It is seen that the assessee trust has claimed deduction u/s 11 in its past AYs. For e.g. it has claimed deduction of Rs. 15.76 Lakhs u/s 11 in the A.Y. 2022-23. Thus, the assessee's income pertaining to previous years has been excluded from the total income on account of applicability of section 11 which ocurres after the commencement of such activities. 9. Considering the above, and since its activities were already commenced at the time of filing the present application, the assessee trust is not eligible to file application u/s 80G(5)(iv) (B) of the Income-tax Act, 1961. Therefore, the application filed by the assessee is liable to be rejected. 10. In view of the above, the application dated 22/05/2024 under sub clause (B) of (iv) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961 filed by the assessee is hereby rejected.” 4 ITA No. 635/PUN/2025 6. Dissatisfied, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto. 7. The Ld. AR submitted that the assessee has used wrong section code in Form 10AB inadvertently/ mistakenly due to system issue. He relied on the decision of the Co-ordinate Bench of the Pune Tribunal in the case of Kimaya Ashram Charitable Trust Vs. CIT (Exemption) in ITA Nos. 2033 & 2034/PUN/2024, dated 23.12.2024 and submitted that the Tribunal in this case under the similar set of facts as that of the assessee, has set aside the matter to the file of the Ld. CIT(E) with a direction to treat the application of the assessee as filed under the correct/desired section. He therefore requested that the order of the Ld. CIT(E) may be set aside with a direction to treat decide the matter afresh after affording an opportunity of hearing to the assessee as the assessee is in a position to substantiate its case before the Ld. CIT(E) to his satisfaction by filing all the relevant details for deciding the issue afresh. 8. The Ld. DR, on the other hand, supported the order of the Ld. CIT(E). 9. We have heard the Ld. Representatives of the parties and perused the material available on record and the decision of the Co-ordinate Bench of the Pune Tribunal (supra) relied upon by the Ld. AR. The main grievance of the assessee agitated in this appeal is the selection of wrong section code by the assessee in its application for regular registration other than Clause (ii) of the first proviso to sub-section (5) of section 80G of the Act. We find that this issue is no more res-integra and covered in favour of the assessee by catena of decisions of the various benches of the Tribunal involving similar set of facts as that of the assessee in the present appeal. In our view, wrong selection of section code/clause would not disentitle the assessee to its rightful claim and cannot be treated as fatal to the proceedings initiated after the filing of the application. Support may be drawn from the decision of the Pune Bench of the Tribunal in the case Help For Children In Need Foundation Vs. CIT (Exemption), Pune in ITA No. 1774/PUN/2024, dated 09.12.2024 wherein the order of the Ld. CIT(E) has been set aside with a direction to decide the application afresh by treating the same as filed under the correct/desired section. Similar view has been taken by the Pune Tribunal in the case of Kimaya Ashram Charitable Trust (supra). 5 ITA No. 635/PUN/2025 10. Respectfully following the decision(s) of the Co-ordinate Bench (supra) and considering the given facts and circumstances in the present case and also that the Ld. CIT(E) has not given any adverse findings on merits of the case, we deem it fit and proper, in the interest of justice, to grant an opportunity to the assessee to substantiate its case before the Ld. CIT(E) by setting aside the matter to the file of Ld. CIT(E). We, therefore, set aside the impugned order of the Ld. CIT(E) who shall give an opportunity to the assessee to file the correct application/ treat the original application as filed under the correct section and then decide the case on merits denovo as per facts and law, after granting reasonable opportunity of hearing to the assessee. The assessee is also directed to remain vigilant in respect of the notice(s) of hearing issued by Ld. CIT(E) and submit the details/ documents as may be called upon by the Ld. CIT(E) on the appointed date without seeking any adjournment under any pretext, failing which the Ld. CIT(E) is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes. 11. In the result, the appeal of assessee is treated as allowed for statistical purposes. Order pronounced in the open court on 28th May, 2025. Sd/- Sd/- (R.K. Panda) (Astha Chandra) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; दिन ांक / Dated : 28th May, 2025. रदि आदेश की प्रधिधलधप अग्रेधिि / Copy of the Order forwarded to : 1. अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 5. ग र्ड फ़ इल / Guard File. //सत्य दपि प्रदि// True Copy// आिेश नुस र / BY ORDER, िररष्ठ दनजी सदचि / Sr. Private Secretary आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune "