PEOPLES PROGRESS TRUST,HYDERABAD V. CIT(EXEMPTIONS), HYDERABD

ITA 635/HYD/2025

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The case involves the Peoples Progress Trust, a charitable trust, appealing against the decision of the Commissioner of Income Tax (Exemptions), Hyderabad, which rejected their application for regular registration under Section 80G of the Income-tax Act, 1961. The rejection was based on the grounds that the application was filed beyond the prescribed time limit as per the amended provisions introduced by the Finance Act, 2020. The Tribunal considered the arguments presented by both parties, including the trust's compliance with statutory requirements and the procedural nature of the delay in filing the application. The Tribunal's decision emphasized the importance of substantive rights over procedural technicalities in the context of charitable trusts.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711252 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: misc
• Other Referred Cases: Bhamashah Sundarlal Daga Charitable Trust Vs. The Commissioner of Income tax - Exemptions, Jaipur
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Condonation of delay; Opportunity of being heard; Principle of natural justice; Search and seizure; Charitable institution; Procedural lapse
• Section: 119(2)(b); 80G

Judgement Text

"1 आयकर अपीलीय न्यायाधिकरण में, हैदराबाद ‘ए’ बेंच, हैदराबाद IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ A ‘ Bench, Hyderabad श्री मंजूनाथ जी, माननीय लेखा सदस्य एवं श्री रवीश सूद, माननीय न्याययक सदस्य SHRI G. MANJUNATHA, HON’BLE ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, HON’BLE JUDICIAL MEMBER आयकरअपीलसं./I.T.A.No.635/Hyd/2025 Peoples Progress Trust, Hyderabad PAN: AABTP5056G Vs. CIT(Exemptions), Hyderabad (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) करदाता का प्रतततितित्व/ Assessee Represented by : Shri P. Vinod, Advocate राजस्व का प्रतततितित्व/ Department Represented by : Dr. B. Bala Krishna, CIT-DR सुिवाई समाप्त होिे की ततति/ Date of Conclusion of Hearing : 17.07.2025 घोषणा की तारीख/ Date of Pronouncement : 25.07.2025 O R D E R प्रतत रवीश सूद, जे.एम./PER RAVISH SOOD, J.M. The present appeal has been filed by the assessee trust against the order passed by the Commissioner of Income Tax (Exemptions) [hereinafter referred to as “CIT(Exemptions)”], dated 17.03.2025 rejecting the application filed in “Form No. 10AB” for regular registration under Section 80G(5) of the Income-tax Act, 1961 (for short, “the Act”). Printed from counselvise.com ITA No.635/Hyd/2025 Peoples Progress Trust, Hyderabad. 2 The assessee trust has assailed the impugned order on the following grounds of appeal before us: “Ground 1. The Rejection order dated 17-03-2025 in Form 10AD of the Income-tax Act, 1961 is erroneous and contrary to law and facts of the case and devoid of any merit. Ground 2. The CIT(E), Hyderabad failed to note that the amendments in Finance Act 2020 were introduced to simplify the procedure of registration of charitable trusts/Institutions and the amendments cannot be interpreted in a way that is prejudicial to the Trust/Institutions. Ground 3. The CIT(E), Hyderabad failed to issue show cause notice and provide opportunity of being heard regarding delay in filing the application before rejecting it and thereby violating principles of natural justice. Ground 4. The CIT(E), Hyderabad failed to note that, the appellant is an existing trust that had already commenced its activities before obtaining provisional registration. The timelines for commencement of activities under the new regime do not apply to existing trusts that began operations prior to 1st April 2021. The timelines for filing Form 10AB should be based on the expiry of provisional registration i.e., 30th September 2024 and not the commencement of activities. In this regard reference can be drawn from case law: \"Bhamashah Sundarlal Daga Charitable Trust Vs. The Commissioner of Income tax - Exemptions, Jaipur”. Ground 5. The CIT(E), Hyderabad also failed to note that commencement of activities applies for those trusts/Institutions which are newly formed as per new regime and not yet started charitable activities at the time of obtaining provisional registration. Ground 6. The CIT(E), Hyderabad failed to note that there is no specific violation by the appellant and complied with all other requirements/conditions for obtaining registration under section 80G(5)(iii) of the Act. Ground 7. For the above and such other grounds that may be raised at the time of hearing, it is respectfully submitted that the appeal be allowed and suitable directions be given to the CIT(E), Hyderabad to allow the claim of the Appellant.” Printed from counselvise.com ITA No.635/Hyd/2025 Peoples Progress Trust, Hyderabad. 3 2. Succinctly stated, the assessee is a trust registered with the Registrar of Trusts on 19.07.1995, with its primary objects as that of relief of the poor, education, and medical relief. The assessee trust was granted provisional registration under Section 80G of the Act by the Central Processing Centre (CPC) in “Form No. 10AC” dated 22.06.2022, valid for the period from AY 2023–24 to AY 2025–26. 3. The assessee trust in accordance with the provisions of the amended Section 80G and Rule 11AA, had filed its application for regular registration in “Form No. 10AB” on 30.09.2024. During the course of proceedings under Section 80G(5)(iii), the assessee trust vide its replies dated 29.12.2024, 28.02.2025, and 17.03.2025 submitted the requisite details/information in response to the queries raised by the CIT(Exemptions). 4. However, the CIT(Exemptions) rejected the said application vide order dated 17.03.2025 on the ground that the assessee trust had failed to apply for regular registration within the prescribed time limit. It was observed by him that as per the amended provisions introduced by the Finance Act, 2020, an application in “Form No. 10AB” should be filed at least six months prior to the expiry of the provisional registration or Printed from counselvise.com ITA No.635/Hyd/2025 Peoples Progress Trust, Hyderabad. 4 within six months from the commencement of its activities, whichever is earlier. 5. The CIT(Exemptions) further observed that the CBDT vide Circular No. 7/2024 dated 25.04.2024 had extended the “due date” for filing Form No. 10A/10AB till 30.06.2024. However, as the assessee trust had filed its application in “Form 10AB” on 30.09.2024, therefore, it was held to be time-barred. Accordingly, the CIT(Exemptions) rejected the application filed by the assessee trust for regular registration under Section 80G of the Act on the ground of the delay involved in filing of the same. 6. Aggrieved, the assessee trust has carried the matter in appeal before us. 7. We have heard the Ld. Authorised Representatives of both parties, perused the orders of the lower authorities and the material available on record. 8. Shri. P. Vinod, Advocate, the Ld. Authorised Representative (for short, “Ld.AR”) for the assessee trust, submitted that the delay in filing the application in “Form No. 10AB” was inadvertent and not deliberate. The Ld. AR submitted that the assessee trust had already been granted Printed from counselvise.com ITA No.635/Hyd/2025 Peoples Progress Trust, Hyderabad. 5 provisional registration and had thereafter complied with all statutory requirements. Elaborating further on his contention, the Ld. AR submitted that the delay in filing the application for regular registration was only procedural and should not defeat the substantive claim under Section 80G of the Act. The AR also contended that the assessee trust had filed complete details before the CIT(Exemptions), which demonstrated the genuineness of its activities. 9. Per Contra, the learned DR supported the order of the CIT(Exemptions) and submitted that the time limit prescribed under the law is mandatory in nature, and the CIT(Exemptions) has no discretion to condone the delay in filing of “Form 10AB”. 10. We have heard the Ld. Authorized Representatives for both parties and perused the material available on record. Admittedly, the assessee trust was granted provisional registration under Section 80G and had filed “Form 10AB” for regular registration on 30.09.2024. As observed by us hereinabove, the CBDT, vide Circular No. 7/2024 dated 25.04.2024, had extended the “due date” for filing such application till 30.06.2024, therefore, there can be no denying of the fact that the application filed by the assessee trust was beyond the prescribed time limit. Printed from counselvise.com ITA No.635/Hyd/2025 Peoples Progress Trust, Hyderabad. 6 11. Although the delay in filing the application for regular registration under Section 80G in \"Form 10AB\" is procedural in nature, and the assessee trust had otherwise demonstrated the genuineness of its charitable activities, but we are afraid that the provisions of the Act read alongwith the CBDT Circular No. 7/2024 (supra) are clear on the prescribed time limit in so far the filing of an application for regular registration in \"Form 10AB\" under Section 80G of the Act is concerned. However, we are at the same time of a firm conviction that procedural lapses should not defeat the substantive rights, particularly in matters of charitable trusts seeking exemptions. Although there is no explicit provision under the Income-tax Act or rules for condonation of delay in filing of \"Form 10AB\" for regular registration under Section 80G of the Act, but the assessee trust remains at liberty to approach the CBDT for condonation under Section 119(2)(b) of the Act. Thereafter, the CIT(Exemptions) is directed to take up and dispose of the application filed by the assessee trust for regular registration under Section 80G of the Act, on merits, in accordance with law and after providing due opportunity of being heard to the assessee trust. Printed from counselvise.com ITA No.635/Hyd/2025 Peoples Progress Trust, Hyderabad. 7 12. Resultantly, the appeal of the assessee trust is allowed for statistical purposes. Order pronounced in the Open Court on 25th July, 2025. Sd/- (मंजूनाथ जी) (MANJUNATHA G.) लेखा सदस्य/ACCOUNTANT MEMBER Sd/- (श्री रवीश सूद) (RAVISH SOOD) न्यायिक सदस्य/JUDICIAL MEMBER Hyderabad, dated 25.07.2025. TYNM/Sr.PS. आदेशकी प्रतततलतप अग्रेतषत/ Copy of the order forwarded to:- 1. तनर्ााररती/The Assessee : Peoples Progress Trust, Plot No. 755-756-757, Pragathi Nagar - 500090, Hyderabad. 2. राजस्व/ The Revenue : CIT (Exemptions), Hyderabad, Aaykar Bhavan, Opp. LB Stadium, Basheerbagh, Hyderabad. 3. The Principal Commissioner of Income Tax (Exemption), Hyderabad 4. तवभागीयप्रतततनतर्, आयकर अपीलीय अतर्करण, हैदराबाद / CIT-DR, ITAT, Hyderabad 5. गार्ाफ़ाईल / Guard file आदेशानुसार / BY ORDER Sr. Private Secretary ITAT, Hyderabad Printed from counselvise.com "