Shree Swaminarayan Gadi Trust-Vadtal (SVG), Surat V. CIT,(Exemption), Ahmedabad, Ahmedabad

ITA 369/SRT/2024

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 2389 (ITAT-SURAT)
• Duration Of Justice: 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-05-2024
• Assessment Year: misc
• Appeal Filed On: 02-04-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No. 369 & 370/Srt/2024 (Assessment Year –N/A) (Hybrid hearing) Shree Swaminarayan Gadi Trust Vadtal (SVG), Shree Ji Nagar Low Housing Society, Kamal Park, L.H. Road, Surat-395006. PAN No. ABATS 7631 Q Vs. C.I.T.(Exemptions), Ahmedabad. Appellant/ Assessee Respondent/ Revenue Assessee represented by Shri Manish J Shah and Sh. Rushin Patel, Advocates (A.R’s) Department represented by Shri Ashish Pophare, CIT-DR Appeal instituted on 03/04/2024 Date of hearing 08/05/2024 Date of pronouncement 13/05/2024 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. These two appeals by the assessee are directed against the order of the learned Commissioner of Income Tax (Exemptions), Ahmedabad [in short, the ld. CIT(E)] dated 05/03/2024 and 04/03/2024 respectively. In ITA No. 369/Srt/2024, the assessee has challenged the rejection of application for registration of assessee-trust under Section 12A/12AB of the Income Tax Act, 1961 (in short, the Act) and in ITA No. 370/Srt/2024, the assessee has challenged the rejection of approval under Section 80G(5) of the Act. Facts in both the appeals are common and grounds of appeal in both these appeals are interconnected, therefore, both these appeals were clubbed and heard together and are being denied by this common order to avoid the conflicting ITA No. 369 & 370/Srt/2024 Shree Swaminarayan Gadi Trust Vadtal (SVG) Vs CIT(E) 2 decision. For appreciation of facts, we take ITA No. 369/Srt/2024 as a lead case. In this appeal, following grounds of appeal have been raised by the assessee. “1. The ld. CIT(E) erred in law and on facts in denying registration u/s 12A(1) of the Act without appreciating facts and law of the case properly. 1.1 The ld. CIT(E) failed to appreciate the clerical error committed in selecting appropriate head in drop down list provided in e-filing portal while furnishing Form 10AB electronically cannot lead to denial of registration, more particularly, on the fact that appellant is fulfilling all the conditions provided u/s 12A for becoming eligible to obtain registration. 2. The appellant craves leave to add, amend or alter the grounds of appeal at the time of hearing, if need arise.” 2. Rival submissions of both the parties have been heard and record perused. Sh. Rushin Patel, the learned Authorised Representative (ld. AR) of the assessee submits that the assessee-trust filed an application for registration under Section 12AB of the Income Tax Act, 1961 (in short, the Act) in Form-10AB on 28.09.2023. However, at the time of filing online application, the applicant selected inappropriate sub-clause of Section 12A(1) (ac)(iv) instead of Section 12A(1)(ac)(iii). This fact was brought in the notice of ld. CIT(A) vide their reply filed in response to the show cause notice and prayed to treat the same under sub-clause (iii) of clause (ac) of section 12A(1). Such fact is duly recorded by ld CIT(E) in his order. The prayer of assessee was not accepted by ld CIT(E) by taking view that he has no power to change or rectify the application filed in Form-10AB. The ld. AR of the assessee submits that once the assessee has explained the inadvertent mistake, the ld. CIT(E) ought to have accepted the explanation instead of rejecting application on technical ground. The ld. AR of the assessee submits that the assessee has good case on merit and is likely to succeed if in case one more opportunity is given with direction to ld. CIT(E) to ITA No. 369 & 370/Srt/2024 Shree Swaminarayan Gadi Trust Vadtal (SVG) Vs CIT(E) 3 treat the application of assessee under Section 12A(1)(ac)(iii) instead of Section 12A(1)(ac)(iv). The assessee fulfilled all other remaining condition for registration under Section 12A/12AB of the Act, i.e. charitable object and genuinenity of activities. Similar submissions were made by ld AR for assessee in respect of grounds of appeal in ITA No. 370/Srt/2024, that the applicant selected inappropriate clause Section 80 G (5) (ii) instead of Section 80G(5)(iii) of the Act. This fact was brought in the notice of ld. CIT(A) vide their reply filed in response to the show cause notice and prayed to treat the same under sub-clause (ii) instead of clause (iii) of section 80G(5). Such fact is duly recorded by ld CIT(E) in his order. The ld. AR of the assessee submits that the appeal against objection of rejection of registration under Section 12A/ 12AB, the assessee has already filed appeal before Tribunal in ITA No. 369/Srt/2024. 3. The ld AR for the assessee submits that the CBDT has recently issued a Circular No. 7/2024 dated 25/04/2024 wherein the time limit for filing application and Form 10AB for approval of fund under section 80G(5) has been extended up to 30/06/2024. In the said Circular, the CBDT has already granted relaxation of time to the parties whose similar applications are pending before the ld. CIT(E). Thus, the assessee may also allow similar benefit of relaxation. The ld AR for the assessee submits that both the applications of the assessee-trust were rejected summarily, therefore, the matters may be restored back to the file of ld CIT(E) for considering both the application on merit and to allow relief to the assessee. ITA No. 369 & 370/Srt/2024 Shree Swaminarayan Gadi Trust Vadtal (SVG) Vs CIT(E) 4 4. On the other hand, Sh. Ashish Pophare, learned Commissioner of Income Tax- Departmental Representative (ld. CIT-DR) for the revenue supported the order of ld. CIT(E). The ld CIT-DR for the revenue submits that the assessee may apply for registration under section 12A/12AB or for approval under section 80G(5) afresh on fulfilling the required conditions thereof. 5. We have considered the submissions of both the parties and perused the record carefully. There is no dispute that the assessee applied for registration under Section 12A/12AB of the Act under Form 10AB on 28.09.2023. The ld. CIT(E) while considering the application of assessee noted that the application filed by assessee is not maintainable and accordingly, a show cause notice dated 02/11/2023 was issued for seeking clarification. The assessee responded to the show cause notice of ld CIT(E) vide their reply dated 15.12.2023. The contents of show cause notice and the reply thereof is not recorded by ld CIT(E) in his order. We find that the assessee vide their reply dated 15/12/2023 prayed to consider the application in appropriate sub-clause of section 12A(1). The ld CIT(E) held that he has no power to change/ amend or rectify Form-10AB. We find that it was an inadvertent mistake and the assessee has already explained the facts and prayed for correction before the ld. CIT(E). In our view the mistake in filing entry was not fetal and could be considered in appropriate sub-clause or clause of section 12A(1). Otherwise, the assessee has provided all the details and information in Form-10AB, while applying for registration under section 12A/12AB. Being first appellate authority, the plea of assessee for correction in Form-10AB is accepted and ITA No. 369 & 370/Srt/2024 Shree Swaminarayan Gadi Trust Vadtal (SVG) Vs CIT(E) 5 the order of ld CIT(E) is set-aside. The registry official of ld CIT(E) maintaining record of ITBA portal about the registration of trust under section 12A/12AB is directed either to correct such mistake or allow the assessee to rectify or amend the relevant clause/ sub-clause of section 12A(1). Considering the fact that the application of assessee was not considered on merit, therefore, we deem it appropriate to direct the ld. CIT(E) to treat the application of assessee under Section 12A(1)(ac)(iii) in place of Section 12A(1)(ac)(iv) of the Act and to consider the case on merit and pass the order in accordance with law. Needless to direct that before passing the order, the ld CIT(E) shall grant opportunity of hearing to the assessee. The assessee is also directed to furnish complete details to prove its object and activity and make all compliances as desired by the ld. CIT(E). In the result, the grounds of appeal raised by the assessee are allowed for statistical purposes only. 6. In the result, the appeal of assessee in ITA No. 369/Srt/2024 is allowed for statistical purpose. 7. So far as grounds of appeal in ITA No. 370/Srt/2024 is concerned, we find that the assessee filed their application in Form-10AB on 29.09.2023 for approval under section 80G(5). The application same was rejected by ld CIT(E) by taking view that the applicant was required to filed application under Section 80 G (5) (iii) in lieu of Section 80G(5)(ii) of the Act. Considering the facts that on similar objection, we have set-aside the order of ld CIT(E) in rejecting similar application under section 12A, therefore, order impugned in the present appeal is also set-aside with similar observation and this appeal is also restored ITA No. 369 & 370/Srt/2024 Shree Swaminarayan Gadi Trust Vadtal (SVG) Vs CIT(E) 6 back to the file of ld CIT(E) to pass order afresh after considering merits of the case. Needless to direct that before passing the order, the ld. CIT(E) shall grant fair and reasonable opportunity of hearing to the assessee. The assessee is also directed to be more vigilant in future and not to cause further delay and seek adjournment without any valid reason and to furnish all the details and his submissions and evidences on various grounds of appeal raised by it, as soon as possible, if so desired without any further delay. 8. We may also anticipate that there was delay in filing application for approval under Section 80G(5), as CBDT in its earlier Circular No. 08/2022 has extended time period for filing such application up to 30.09.3022. We find that the CBDT in its recent Circular No. 7/2024 dated 25/04/2024 has extended the time limit for filing Form 10AB for approval under Section 80G(5) till 30/06/2024. It is further clarified in the aforesaid Circular that where any trust, institution or fund has already made an application in Form 10AB under the said provisions on or before issuance of this circular, where the Principal Commissioner or Commissioner has not passed an order before issuance of this circular, the pending application in Form 10AB may be treated as valid application or where the Principal Commissioner or Commissioner has passed an order rejecting such application on or before issuance of this circular, solely on account of fact that application was furnished after due date or that application has been furnished under wrong code, it may furnish a fresh application in form 10AB within extended period i.e. up to 30/06/2024. Considering the benefit allowed by the CBDT in its Circular No. 7/2024, therefore, the assesse is also eligible ITA No. 369 & 370/Srt/2024 Shree Swaminarayan Gadi Trust Vadtal (SVG) Vs CIT(E) 7 for benefit of similar extended period. In the result, the grounds of appeal raised by the assessee are allowed for statistical purposes. 9. In the result, this appeal of assessee is allowed for statistical purposes. Order announced in open court on 13 th May, 2024 in open court. Sd/- Sd/- (BIJAYANANDA PRUSETH) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 13/05/2024 *Ranjan Copy to: 1. Assessee 2. Revenue 3. CIT 4. DR By order 5. Guard File Sr. Private Secretary, ITAT, Surat