GANDHINAGAR MALAYALEE SAMAJAM ,AHMEDABAD V. THE CIT(EXEMPTION), AHMEDABAD

ITA 467/AHD/2025

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The case involves Gandhinagar Malayalee Samajam, a trust, appealing against the decision of the Commissioner of Income Tax (Exemption), Ahmedabad, which rejected their application for approval under section 80G of the Income-tax Act, 1961. The rejection was based on the incorrect filing under section 80G(5)(iv)(B), whereas the correct clause should have been 80G(5)(ii). The tribunal found that the error was a bona fide mistake and directed the CIT(E) to reconsider the application under the correct provisions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717112 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 28-02-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P RASTOGI
• Assessee Lawyers: MEHUL K PATEL
• Keywords: Condonation of delay; Set aside; Procedural lapse
• Section: 11; 80G

Judgement Text

" आयकर अपीलीय अिधकरण, अहमदाबाद Ɋायपीठ “ B”, अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “ B ” BENCH, AHMEDABAD ] ] BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER आयकर अपील सं /ITA No.467/Ahd/2025 िनधाŊरण वषŊ /Assessment Year : NA Gandhinagar Malayalee Samajam, Plot No.473/1, Sector-12/B, Gandhinagar-382016. (Gujarat) बनाम/ v/s. The Commissioner of Income Tax(Exemption), Ahmedabad. ̾थायी लेखा सं./PAN : AACTG1489K अपीलाथŎ/ (Appellant) Ů̝ यथŎ/ (Respondent) Assessee by : Shri Mehul K Patel, AR Revenue by : Shri R P Rastogi, Sr-DR सुनवाई की तारीख/Date of Hearing : 20/08/2025 घोषणा की तारीख /Date of Pronouncement: 22/08/2025 आदेश/O R D E R PER MAKARAND V. MAHADEOKAR, AM: ] ] This appeal by the assessee is directed against the order of the learned Commissioner of Income-tax (Exemption), Ahmedabad [hereinafter referred to as “CIT(E)”] dated 17.09.2024 passed under section 80G(5) of the Income-tax Act, 1961 [hereinafter referred to as “the Act”], whereby the assessee’s application in Form No. 10AB seeking approval under section 80G of the Act was rejected as non- maintainable. Printed from counselvise.com ITA No.467/Ahd/2025 Gandhinagar M Samajam Vs. CIT(E) Assessment Year NA 2 Condonation of Delay 2. At the outset, it is noted that there is a delay of 90 days in filing the present appeal. The assessee has filed an affidavit sworn by Shri M. N. Sasi Menon, Trustee, affirming that he is 71 years of age, not conversant with income-tax matters, nor operating computers or accessing the income-tax portal. The affidavit explains that the assessee came to know about rejection of its application only in January 2025 through trustees of other similar trusts. Immediately thereafter, the assessee approached its Chartered Accountant and later entrusted the matter to an advocate at Ahmedabad to file the present appeal. The delay thus occurred due to bona fide and unavoidable circumstances. 3. The learned Departmental Representative (DR) raised no objection to the condonation of delay. Considering the affidavit, the circumstances explained, and the settled law that substantial justice should prevail over technicalities, we are satisfied that there was sufficient cause for not filing the appeal within the prescribed time. Accordingly, the delay of 90 days is condoned, and the appeal is admitted for adjudication on merits. Facts of the Case 4. The assessee filed application in Form No. 10AB seeking approval under sub-clause (B) of clause (iv) of the first proviso to section 80G(5) of the Act. The learned CIT(E) noted that as per section 80G(5)(iv)(B), approval is available only if the activities of the trust have not commenced at least one month before Printed from counselvise.com ITA No.467/Ahd/2025 Gandhinagar M Samajam Vs. CIT(E) Assessment Year NA 3 commencement of the previous year, or the activities have commenced but no exemption has been claimed u/ss. 10/11/12 or 23C in any earlier year. On verification of CPC portal, the CIT(E) observed that the assessee had already claimed exemption under section 11 in the past assessment years. Since exemption had already been claimed under section 11, the CIT(E) held that the conditions of section 80G(5)(iv)(B) were violated and accordingly, the application was rejected as non-maintainable. 5. Aggrieved by the order of CIT(E), the assessee is in appeal before us raising following grounds of appeal: 1. That on facts, and in law, the learned CIT (Exemption) has grievously erred in rejecting the application for approval u/s. 80G (5) (iv) (B) of the Act as non-maintainable. 2. That on facts and in law, the appellant made a bona fide error in selecting sub-clause (iv) instead of sub-clause (ii) of section 80G(5) of the Act. 3. That on facts, and in law, learned CIT (Exemption) be directed to consider the application under the correct provisions of section 80G(5) (ii) of the Act and decide on merits. 4. The appellant craves liberty to add, alter, amend any ground of appeal. 6. The learned AR submitted that the assessee, while filing Form 10AB, had inadvertently mentioned the wrong section i.e. sub-clause (B) of clause (iv) of section 80G(5) instead of the correct clause (iii) of the first proviso to section 80G(5). The error was purely technical. It was further submitted that the assessee-trust had been carrying out charitable activities and filing its return of income under section 11. Therefore, the rejection reason cited by the CIT(E) is not applicable Printed from counselvise.com ITA No.467/Ahd/2025 Gandhinagar M Samajam Vs. CIT(E) Assessment Year NA 4 to the assessee. The assessee was also not afforded effective opportunity before rejection, as it was not aware of the proceedings until later. Placing reliance on the affidavit explaining the bona fide mistake, the learned AR prayed that the matter may be restored to the file of the CIT(E) with a direction to consider the application under the correct clause of section 80G(5) and decide on merits. The learned DR supported the order of the CIT(E). However, he did not object to the plea of the assessee for restoration of the matter to the file of the CIT(E) for decision afresh under the correct clause of section 80G(5). 7. We have considered the rival submissions, the material on record, and the order of the learned CIT(E). It is an admitted fact that the assessee filed Form No. 10AB under an inapplicable clause i.e. section 80G(5)(iv)(B), which led to rejection of its application. The assessee has candidly admitted this inadvertent mistake, supported by affidavit, and prayed for consideration under the correct clause of section 80G(5). It is settled law that procedural lapses or technical mistakes should not defeat the cause of substantive justice. In the present case, the assessee is already carrying out charitable activities and has been assessed under section 11. Therefore, the rejection solely on the ground that exemption was claimed earlier is not sustainable when the application itself was filed under an incorrect clause due to bona fide mistake. 8. In view of the above, and considering that the learned DR has raised no serious objection, we are of the considered opinion that the matter deserves to be set aside and restored to the file of the CIT(E) Printed from counselvise.com ITA No.467/Ahd/2025 Gandhinagar M Samajam Vs. CIT(E) Assessment Year NA 5 with a direction to treat the application as made under the correct clause of section 80G(5) and to adjudicate afresh on merits after affording due opportunity to the assessee. 9. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 22nd August, 2025 at Ahmedabad. Sd/- Sd/- (SANJAY GARG) JUDICIAL MEMBER (MAKARAND V.MAHADEOKAR) ACCOUNTANT MEMBER (True Copy) Ahmedabad, Dated 22/08/2025 Manish, Sr. PS आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ ) अपील ( / The CIT(Exemption)-Ahmedabad 5. िवभागीय Ůितिनिध , आयकर अपीलीय अिधकरण , राजोकट/DR,ITAT, Ahmedabad, 6. गाडŊ फाईल /Guard file. आदेशानुसार/ BY ORDER, सȑािपत Ůित //True Copy// सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण, ITAT, Ahmedabad Printed from counselvise.com "