GAWAR FOUNDATION,HISAR V. CIT (EXEMPTIONS), CHANDIGARH

ITA 4512/DEL/2024

AI Insights

The Gawar Foundation, a charitable trust, appealed against the decision of the CIT (Exemption), Chandigarh, which rejected their application for regular approval under Section 80G(5)(iii) due to an inadvertent error in selecting the section code in Form 10AB. The tribunal noted the procedural lapses by the CIT (Exemption) in not providing a fair hearing and in mechanically rejecting the application based on technical reasons without considering the substantive activities of the trust. The tribunal referenced a similar case, Celebrate Life vs. CIT(E), to support the decision to allow the appeal and direct a fresh consideration of the application.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 34403 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Other Referred Cases: Celebrate Life vs. CIT(E) ITA No. 5692/Mum/2024
• Laws Referred To: Section 80G(5)(iii), Section 80G(5)
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Assessee Lawyers: DEEPAM JAIN
• Keywords: Opportunity of being heard; Bonafide belief; Bonafide mistake; Charitable institution
• Section: 12AA; 12A; 80G

Judgement Text

"P a g e | 1 ITA No. 4512/Del/2024 Gawar Foundation (AY: 2024) IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND MS. MADHUMITA ROY, JUDICIAL MEMBER ITA No.4512/Del/2024 (A.Y. 2024) Gawar Foundation DD-378, Sector 16-17 Modle Town Hisar Haryana 125005 Vs. CIT (Exemption) Room No. 1, 5th Floor, CR Building, Himalya Marg, Sector 17 E Chandigarh 160017 \u0001थायी लेखा सं./जीआइआर सं./PAN/GIR No.: AACTG1482C Appellant .. Respondent Appellant by : Sh. Deepam Jain, Adv. Respondent by : Sh. Surender Pal, CIT, DR Date of Hearing 17.02.2025 Date of Pronouncement 21.02.2025 O R D E R PER MADHUMITA ROY: (JM): This appeal filed by the Assessee is directed against the order dated 05.08.2024 passed by the Ld. CIT(E), Chandigarh on the following grounds:- P a g e | 2 ITA No. 4512/Del/2024 Gawar Foundation (AY: 2024) “1. That the Ld. CIT (E), Chandigarh had gone wrong in passing the order rejecting the application submitted by the appellant in Form 10AB seeking regular approval under section 80G(5)(iii) without providing a fair and reasonable opportunity of being heard. 2. That the Ld. CIT (E) had erred in law for not condoning the genuine and bonafide mistake of selecting of wrong section code in Form 10AB as (ii) of the first proviso to sub-section (5) of Section 80G' instead of '(ili) of first proviso to sub-section (5) of Section 80G'. 3. That the Ld. CIT (E) had arbitrarily rejected the application submitted by the appellant in Form 10AB on 23-03-2024 seeking regular approval under clause iii) of the first proviso to sub-section (5) of section 80G, without taking into consideration the adjournment application submitted by the appellant and in utter violation to the provisions of item No. (B) of sub-clause (b) of clause (ii) to 2nd Proviso to Section 80G(5) has illegally rejected the application in Form 10AB submitted by the appellant. 4. That the Ld. CIT(E) without appreciating the facts and circumstances of the case and law in force, without application of mind has mechanically rejected the application submitted by the appellant in Form 10AB without recording even a single adverse finding regarding the activities carried on by the appellant about the aims and objects of the trust, and order of the rejection merely based on technical reasons which possess no material reasons for rejection. 5. That the order of the Ld. CIT (E), Chandigarh denying the approval under section 80G(5) is bad in law as the said order has been passed hurriedly without appreciating the provisions of the law. 6. That the present appeal submitted is within limitation and the requisite fees have been deposited. 7. The appellant craves leave to add, amend, revise, modify, substitute or rescind any of the grounds) of appeal, before or at the time of hearing of this appeal.” 2. The appellant before us, is a charitable trust, incorporated on 27.8.2014 and registered under Section 12AA of the Act on 02.05.2019 under the Registration No. 12A/AACTG1482C/1932 granted by the Ld. CIT(E), Chandigarh and later on re-registered under sub-clause (i) of clause (ac) of sub Section 1 of Section 12A P a g e | 3 ITA No. 4512/Del/2024 Gawar Foundation (AY: 2024) on 28.05.2021 for the period of Assessment Year 2022-23 to 2026- 27. The appellant submitted Form 10A on 24.09.2021 seeking provisional registration under clause (iv) of the first proviso to sub- Section (5) of Section 80G against which the provisional approval under section 80G(5) was sanctioned in Form No. 10AC dated 24.09.2021 by the PCIT/CIT. 3. Thereafter, the appellant submitted Form 10AB on 23.3.2024 seeking regular approval under clause (iii) of first proviso to sub-Section (5) of Section 80G but while submitting the application Form 10AB, inadvertently and unintentionally wrong section code ‘(ii) of the first proviso to sub-Section (5) of Section 80G’ has been selected from the dropdown menu of the online Form 10AB. Show cause notice dated 12.7.2024, was issued regarding the maintainability of such application which could not be replied due to filing of ITRs of the assessee as the due date of filing of ITRs was 31.7.2024 and adjournment on the other hand, was sought for 19.7.2024 despite which the application for approval has been rejected by the CIT(E). Neither the appellant was given to rectify the mistake on their own by surrendering the application dated 23.3.2024 in Form 10AB furnished under the wrong section code 80G(5)(ii) and by submitting a fresh application in Form 10AB under correct section code 80G(5)(iii) for which time was extended up to 30.6.2024 by the CBDT vide Circular No. 7 dated 25.4.2024. Hence, the Appellant is in appeal before us. P a g e | 4 ITA No. 4512/Del/2024 Gawar Foundation (AY: 2024) 4. It is a case of the appellant that due to inadvertent mistake and bonafide belief it had correctly applied Form 10AB under Section 80G(5)(iii), which has not been taken into consideration by the CIT(E) in its proper prospective and neither the assessee being heard by the CIT(E) and rejected the case thereafter. In this regard, appellant’s counsel relied upon the decision of the Mumbai Bench in the case of Celebrate Life vs. CIT(E) passed in ITA No. 5692/Mum/2024 wherein on identical facts and circumstances of the matter where due to inadvertent error the wrong section code was inserted instead of clause (iii) of first proviso to sub-section 80G of the Act, liberty was granted by the Tribunal to the assessee to file a fresh application before the Ld. CIT(E) under the correct Form with the further directions upon the CIT(E) to accept the same and to grant permission to load the said form online and decide the issue, in accordance with law, after affording an opportunity of being heard to the appellant. A copy of the said order has been duly placed before us. The assessee’s counsel, thus, prayed for the same relief. The contention whereof has not been able to be controverted by the Ld. DR appearing before us for the Revenue. 5. Having heard the rival contentions of the parties and having regard to the facts and circumstances of the matter, particularly the order passed by the Mumbai Bench in the case of Celebrate Life vs. CIT(E) passed in ITA No. 5692/Mum/2024 on the identical facts and circumstances of the case, we dispose of the appeal by sending P a g e | 5 ITA No. 4512/Del/2024 Gawar Foundation (AY: 2024) the issues to the file of the CIT(E) for passing the order in accordance with law, upon accepting the form to be filed under Section 80G(5)(ii) of the Act. Ld. CIT(E) is further directed to grant an opportunity of being heard to the appellant and to consider the evidences on record or any other evidence which the appellant may choose to file at the time of hearing of the matter in regard to grant of approval under Section 80G(5)(ii) of the Act. 6. In the result, the appeal filed by the Assessee is allowed for statistical purposes. Order pronounced in the open court on 21.02.2025 Sd/- (M. Balaganesh) Sd/- (Madhumita Roy ) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 21.02.2025 PS: Rohit Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI "