SHRI GURU SINGH SABHA,MUMBAI V. CIT(EXEMPTION), MUMBAI

ITA 4565/MUM/2025

AI Insights

The case involves Shri Guru Singh Sabha, a charitable trust, appealing against the decision of the CIT (Exemption) which rejected their application for regular approval of funds under section 80G(5) of the Income Tax Act, 1961. The rejection was primarily due to the incorrect selection of a clause in the application form and the timing of the application, which was deemed beyond the permissible limit. However, the Tribunal found that the application was actually within the extended deadline provided by a CBDT circular and that the clerical error in the clause selection was a procedural irregularity that could be rectified. The Tribunal restored the matter to the CIT (Exemption) for a fresh decision, emphasizing the need for a fair and reasonable opportunity for the assessee to present their case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 773140 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2024-2025
• Appeal Filed On: 17-07-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN KANTI DATTA
• Assessee Lawyers: BHUPENDRA SHAH
• Keywords: Charitable institution; Procedural lapse
• Section: 80G

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER& SMT.RENU JAUHRI, ACCOUNTANT MEMBER ITA No. 4565/MUM/2025 (AY: 2024-25) (Physical hearing) Shri Guru Singh Sabha Plot No.4, Sector 9A, Vashi, Navi Mumbai-400 703 PAN : AAATS2759J Vs CIT (EXEMPTION), 601, 6th Floor, Cumballa Hill MTNL TE Building, Pedder Road, Mumbai-400 026 Appellant / Revenue Respondent / Assessee Assessee by Shri Bhupendra Shah, CA Revenue by Shri Arun Kanti Datta - CIT-DR Date of Institution 17.07.2025 Date of hearing 23.09.2025 Date of pronouncement 23.09.2025 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by assessee is directed against the order of ld. CIT(E) / NFAC dated 21.06.2025 in rejecting application for approval of fund under section 80G(5) of the Income-tax Act, 1961 (in short, ‘the Act’). 2. Rival submissions of both the parties have been heard and record perused. The Ld.AR of the assessee submits that assessee is a charitable trust engaged in charitable activities. Object and activities of the assessee is not in dispute. The assessee is having registration under section 12AB. The assessee was also having provisional approval of fund under section 80(G) of the Act. The assessee applied for regular approval of fund in Form 10AB. However, due to inadvertence, the CA / AR of the assessee inadvertently clicked clause (iii) instead of clause (vi) of first proviso to section 80G(5). Thus, the application Printed from counselvise.com 2 ITA No.4565/Mum/025 Shri Guru Singh Sabha of assessee was rejected. Other ground for rejection was that assessee applied for regular approval under section 80G on 30/11/2024 which is beyond the permissible limit, the assessee should have been applied either within six months of start of activities or at least six months before expiry of provisional registration. The Ld. CIT(E) while rejecting the application of assessee recorded that despite giving opportunity, no compliance was made. The Ld.AR of the assessee submits that assessee applied for regular approval under section 80G on 10/06/2024 which was within the extended period, as extended by Central Board of Direct Taxes (CBDT) in its circular dated 25/04/2024. The Ld.AR of the assessee submits that application of assessee was rejected for technical reasons, therefore, appeal may be restored back to the file of Ld. CIT(E) with liberty to the assessee to correct the appropriate clause and to pass the order afresh. 3. On the other hand, the Ld. CIT-DR for the revenue supported the order of Ld. CIT(E). 4. We have considered the rival submissions of the parties and have gone through the order of CIT(E) carefully. We find that application of the assessee was rejected by Ld.CIT(E) by taking view that it was filed beyond the prescribed time limit, i.e. not filed either six months prior to expiry provisional registration or six months from the starting of activities. We find that CBDT, in its circular No.7 of 2024 has extended time limit for filing application for approval under section 80G(5). Thus, the Ld.CIT(E) is directed to consider the application of assessee as has been filed within the extended Printed from counselvise.com 3 ITA No.4565/Mum/025 Shri Guru Singh Sabha time limit. So far as other objection regarding clicking the appropriate clause (iii) instead of (vi) of Proviso to section 80G, we find that it is a procedural irregularity and not fatal, it could be rectified by Ld.CIT(E) himself. Therefore, we direct the Ld.CIT(E) to consider the same under appropriate clause i.e. under clause (iii) of First Proviso to section 80G(5). Further, considering the fact that the Ld.CIT(E) has not passed the order on merit, therefore, the matter is restored to the file of the Ld.CIT(E) to reconsider the application of assessee for approval of fund and pass the order in accordance with law. Needless to say, before passing the order, the Ld.CIT(E) shall allow fair and reasonable opportunity to the assessee. 5. In the result, the appeal of the assessee is allowed for statistical purpose. Order was pronounced in the open Court on 23 /09/2025 at the time of hearing. Sd/- SMT. RENU JAUHRI ACCOUNTANT MEMBER Sd/- PAWAN SINGH JUDICIAL MEMBER MUMBAI, Dated: 23/09/2025 Pavanan Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order Assistant Registrar ITAT, Mumbai Printed from counselvise.com "