KASSAR TRUST,PUDUCHERRY V. .COMMISSIONER OF INCOME TAX(EXEMPTION), CHENNAI, CHENNAI

ITA 2312/CHNY/2024

AI Insights

The case involves Kassar Trust, which appealed against the decision of the Commissioner of Income Tax (Exemptions), Chennai, rejecting their application for approval under Section 80G of the Income Tax Act, 1961. The rejection was based on the incorrect filing of the application under clause (iv) instead of clause (iii) of the first proviso to Section 80G(5). The Tribunal found that such a technical error should not lead to the rejection of the application, referencing a similar case (Chinnasamy Nagalingam Institute of Medical Science Research Foundation Vs CIT(E)) where the Tribunal directed the Commissioner to allow rectification of such mistakes.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 472417 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: misc
• Other Referred Cases: Chinnasamy Nagalingam Institute of Medical Science Research Foundation Vs CIT(E) ITA No.906/Chny/2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASSESSEE. UPON PERUSAL OF IMPUGNED; D. KOMALI KRISHNA; IRS
• Assessee Lawyers: V.MEENAKSHI SUNDAR
• Keywords: Set aside
• Section: 12; 80G

Judgement Text

" आयकर अपीलीय अिधकरण ‘बी’’ Ɋायपीठ चेɄई मŐ। IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI माननीय ŵी मनोज क ुमार अŤवाल ,लेखा सद˟ एवं माननीय ŵी मनु क ुमार िगįर, Ɋाियक सद˟ क े समƗ। BEFORE HON’BLE SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER AND HON’BLE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER आयकरअपील सं./ ITA No.2312/Chny/2024 Kassar Trust, No.22, Rue Saint Gilles, Pondicherry 605 001. [PAN: AAATK 0236G] Vs. The Commissioner of Income Tax, Exemptions, Chennai. (अपीलाथȸ/Appellant) (Ĥ×यथȸ/Respondent) अपीलाथȸ कȧ ओर से/ Appellant by : Shri V. Meenakshi Sundar, C.A., Ĥ×यथȸ कȧ ओर से /Respondent by : Ms. D. Komali Krishna, IRS, CIT. सुनवाई कȧ तारȣख/Date of Hearing : 16.12.2024 घोषणा कȧ तारȣख /Date of Pronouncement : 18.12.2024 आदेश / O R D E R PER MANU KUMAR GIRI (Judicial Member) This appeal filed by the assessee is arising out of the order of the Ld. Commissioner of Income Tax (Exemption) Chennai (in short ‘’the Ld. CIT (E)’’) dated 7.08.2024 2. The assessee has filed an application on 15.02.2024 in form No.10AB under clause (iv) B of first proviso to Section 80G(5) of the Income Tax Act, 1961 (in short ‘’the Act’’) seeking approval u/s.80G of the Act. As per the ld. CIT(E) Section 80G(5) (iv) (B) of the Act applicable for those trust who have commenced their 2 ITA No. 2312 /Chny/2024 activities and no income or part thereof has been excluded from the total income u/s.10(23C)(iv) (v)(vi), (via) or u/s.11 or 12 for any previous year ending on or before the date of such application at any time after the commencement of such activities. The assessee trust had filed ITR 7 for the financial years 2021-22 2022- 23 and 2023-2024 and claimed application of income in respect of above financial years hence assessee is not eligible to file application u/s.80G (5)(iv)(B) of the Act and the application filed by the assessee was rejected by the ld. CIT(E). Aggrieved, assessee preferred an appeal before the Tribunal. 3. The ld. counsel argued the same points what is narrated in the grounds of appeal. He further submitted the assessee instead of filing form in 10AB under clause (iii) has filed in clause (iv). This is only an technical error and the ld. CIT(A) ought not have rejected the application, otherwise assessee is eligible for grant of approval under Section 80G of the Act. Per contra, the ld.DR relied upon the order of the ld.CIT(E). 4. We heard the rival contentions and perused the material available on record. We find that in similar circumstances the co-ordinate bench of the Tribunal in the case of Chinnasamy Nagalingam Institute of Medical Science Research Foundation Vs CIT(E) ITA No.906/Chny/2024 dated 03.07.2024 has directed Ld. CIT(E) to grant an opportunity to the assessee to rectify the mistake. The said direction is as under:- 1. Aggrieved by rejection of an application filed in Form No.10AB seeking registration under Clause (ii) of first proviso to Sec. 80G(5) vide impugned 3 ITA No. 2312 /Chny/2024 order dated 09.02.2024, the assessee is in further appeal before us. At the time of hearing, none appeared for assessee. Upon perusal of impugned order, it could be seen that the application has been rejected in view of the fact that the assessee was having provisional registration and it had filed application under clause (ii) of first proviso to Sec. 80G(5) whereas it ought to have applied under clause (iii) of first proviso to 80G(5) which is applicable for provisionally registered entity. Aggrieved, the assessee is in further appeal before us. 2. We are of the considered opinion that the application ought not to be rejected on mere technical grounds. The wrong selection of clause may be due to an inadvertent error and the same may be in view of the fact that new regime of registration of trust was brought in place very recently. The applicant ought to have been granted an opportunity to rectify the error. Therefore, we direct Ld. CIT(E) to grant an opportunity to the assessee to rectify the mistake and thereafter, proceed for disposal of application on merits after affording reasonable opportunity of hearing to the assessee. 3. The appeal stand allowed for statistical purposes. Order pronounced on 3rd July, 2024 5. In this case, the ld. Authorized Representative submitted that the assessee instead of filing Form 10AB under clause (iii) has filed in clause (iv). The ld. Authorized Representative further contended that the ld.CIT(E) erred in not entertaining the application on hyper technical ground. 6. We find that the ld.CIT(E) ought to have given proper opportunity to rectify the mistake. Even otherwise, the ld.CIT(E) is supposed to see whether objects as submitted by the assessee in the application for registration are as per law or not. Hence, summary dismissal of the application for approval on hyper technical ground is not justified. We also find that the Tribunal order in the case of Chinnasamy Nagalingam Institute of Medical Science Research Foundation Vs CIT(E) ITA No.906/Chny/2024 dated 03.07.2024 was candidly referred by the assessee but that the same was not considered by the ld.CIT(E). Therefore, respectfully following the co-ordinate bench order referred supra, we set aside the impugned order 4 ITA No. 2312 /Chny/2024 passed by the ld.CIT(E) and direct Ld. CIT(E) to grant an opportunity to the assessee to rectify the mistake and thereafter, proceed for disposal of application on merits after affording reasonable opportunity of hearing to the assessee. 7. In result, appeal of the assessee is allowed for the statistical purpose. Order pronounced in the open court on 18th day of December, 2024 Sd/- Sd/- (मनोज क ुमार अŤवाल) (मनु क ुमार िगįर) (MANOJ KUMAR AGGARWAL) लेखा सद˟ / ACCOUNTANT MEMBER (MANU KUMAR GIRI) Ɋाियक सद˟ / JUDICIAL MEMBER चेɄई Chennai: िदनांक Dated : 18-12-2024 KV आदेश कȧ ĤǓतͧलͪप अĒेͪषत /Copy to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT, Chennai/Coimbatore/Madurai/Salem. 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF "