V-ONE SOCIETY,VADODARA V. THE CIT(EXEMPTION), AHMEDABAD

ITA 287/AHD/2025

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The case involves V-One Society appealing against the decision of the Commissioner of Income Tax (Exemptions), who rejected their application for renewal of provisional approval under Section 80G of the Income-tax Act, 1961. The rejection was based on the incorrect filing under clause (ii) instead of clause (iii) of the first proviso to sub-section (5) of Section 80G. The assessee argued that this error was due to a technical glitch in the income tax portal, which prevented the selection of the correct clause. The Tribunal found merit in the assessee's claim and restored the matter to the CIT(Exemptions) for a fresh examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 396290 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: misc
• Other Referred Cases: Rotary Charity trust in ITA number 6133/Mumbai/2024, North Eastern Social Research Centre vs CIT(E) [2024] 165 taxmann.com 12 (Kolkata Trib)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHESH R REWAR
• Assessee Lawyers: ADJOURNMENT APPLICATION FILED
• Keywords: Opportunity of being heard
• Section: 14A; 80G

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD BEFORE DR. BRR KUMAR, VICE PRESIDENT & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I.T.A. No.287/Ahd/2025 (Assessment Year: N.A.) V-One Society, Bhumija Complex, Opp. Mission Training Compound, Fatehgunj, Vadodara-390002 Vs. Commissioner of Income Tax (Exemption), Ahmedabad [PAN No.AAATV1782C] (Appellant) .. (Respondent) Appellant by : Adjournment Application Filed Respondent by: Shri Ashesh R Rewar, CIT DR Date of Hearing 15.05.2025 Date of Pronouncement 26.05.2025 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Exemption), (in short “Ld. CIT(E)”), Ahmedabad vide order dated 18.10.2024. 2. The Assessee has taken the following grounds of appeal:- “1.00 REJECTING APPLICATION FOR RENEWAL OF PROVISIONAL APPROVAL GRANTED UNDER CLAUSE (iv) OF FIRST PROVISO TO SUB-SECTION (5) OF SECTION 80G OF THE ACT: 1.01 On the facts and circumstances of your appellant’s case and in law, the ld. CIT(E) erred in rejecting application filed for renewal of provisional approval granted under clause (iv) of first proviso to Sub-Section (5) of Section 80G of the Act on plea that your appellant has filed application selecting different clause and as such not maintainable. 1.02 Your appellant submits that due to technical glitches, the income tax portal was not allowing to select clause (ii), as against filed selecting clause (iii), while filing application which the ld. CIT(E) failed to consider. ITA No. 287/Ahd/2025 V-One Society vs. CIT(E) Asst.Year –N.A. - 2– 1.03 Your appellant prays Your Honour to hold so now and direct the ld. CIT(E) to consider the application filed by your appellant as if it is filed selecting correct clause since your appellant is deprived off of the benefit of accepting donations in absence of approval. Your appellant craves leave to add, alter and / or amend the grounds herein above raised.” 3. At the outset, we observe that the appeal is time barred by 37 days. The delay of 37 days is condoned on due consideration of facts and owing to smallness of delay causing no perceptible prejudice to other side. 4. The brief facts of the case are that the assessee / applicant trust filed application for approval under section 80G of the Income-tax Act, 1961 (Act) in Form 10AB under clause (ii) of the first proviso to sub-section (5). However, upon examination of the records and details, CIT(Exemptions) observed that the applicant was holding only a provisional approval granted under clause (iv) of the same proviso, via Form 10AC dated 15 October 2021, for the period starting from Assessment Year 2022-23. The provision under clause (ii) applies only to institutions already holding a valid regular approval whose period is due to expire, requiring them to reapply at least six months prior to expiry. Since the applicant did not hold a regular approval in Form 10AC or Form 10AD, but only a provisional one, it ought to have filed its application under clause (iii) of the first proviso rather than clause (ii). Moreover, the Commissioner (Exemptions) lacks the authority to alter the section code chosen by the applicant at the time of filing Form 10AB. Given these circumstances, CIT(Exemptions) held that the application was non- maintainable and was rejected without examining its merits. 5. The assessee is in appeal before us against the order passed by CIT(Exemptions). In the instant case, on going through the case records, we ITA No. 287/Ahd/2025 V-One Society vs. CIT(E) Asst.Year –N.A. - 3– observe that there was an inadvertent error in filing of form 10AB, wherein application was made under clause (ii) of the first proviso to sub-section (5) of section 80G of the Act, instead of clause (iii) 6. It would be useful to reproduce the relevant extracts of the decision of Rotary Charity trust in ITA number 6133/Mumbai/2024 (vide order dated 09-01-2025), wherein on similar set of facts, the matter was restored to the file of CIT(Exemptions), for do novo consideration, in the interests of justice, for ready reference: “3. Ld. AR submitted that assessee while filing Form for final registration in Form 10AB has inadvertently mentioned the wrong section as sub- clause (B) of clause (iv) of first proviso to subsection (5) of section 80G instead of clause (iii) of first proviso to subsection (5) of section 80G. He further submitted that assessee could not explain the error before the CIT(E) because the notice calling for details mentioned that proceedings under section 14A and that when the staff of the assessee approached the office of the CIT(E), it was advised that no action is required. Ld. AR, accordingly submitted that no proper opportunity was given to the assessee before rejecting the application for registration under section 80G. Ld. AR also drew our attention to the relevant provisions of section 80G to submit that the reason as quoted by the CIT(E) for rejecting the application is not applicable to the assessee. Therefore, ld. AR prayed that directions may be given to ld. CIT(E) to grant approval for registration under section 80G to the assessee. Ld AR relied on the decision of the Kolkata Bench of the Tribunal in the case of North Eastern Social Research Centre vs CIT(E) [2024] 165 taxmann.com 12 (Kolkata Trib) in this regard and prayed for a similar direction as held hereunder – 6. The facts and issues involved in the case in hand being identical to that of the above referred to cases and in view of the findings given by the Coordinate Benches of the Tribunal, the appeal of the assessee is allowed accordingly and the ld. CIT(Exemption) is directed to grant final approval to the assessee under Clause (iii) to First Proviso to section 80G(5) of the Act, if the assessee is otherwise found eligible. It is directed that the Id. CIT(Exemption) will decide the application of the assessee for final approval as expeditiously as possible but not later than two months from the receipt of this order. It is further directed that, if the assessee is granted final approval by the ld. CIT(Exemption) then, the benefit of approval u/s 80G of the Act, if it was available to the assessee prior to the Amendment brought vide Amending Act of 2020, will be deemed to have been continued without any break. The assessee will not be deprived of the benefit during the time period falling between 31/03/2021 and the date of grant of provisional approval under clause (iv) i.e., 28/06/2022, due to technical errors occurred in making the application under the relevant provisions of the Act ITA No. 287/Ahd/2025 V-One Society vs. CIT(E) Asst.Year –N.A. - 4– because of the confusion and misunderstanding on part of the assessee as well as on part of the ld. CIT(Exemption) in properly interpreting the relevant provisions. 4. Ld. DR on the other hand submitted that the CIT(E) has rejected the application based on the submission made by the assessee in Form 10AB stating that the application is made under section 80G(5)(iv)(B). Ld. DR further submitted that case can be remitted back to ld. CIT(E) to consider the application afresh based on the claim of the assessee that wrong section has been inadvertently mentioned in the Form 10AB. 5. We have heard the parties and perused the material on record. Before we proceed to examine the facts in assessee's case, it is important to first look at the relevant provisions of first proviso to subsection (5) of section 80G which read as under – Provided that the institution or fund referred to in clause (vi) shall make an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for grant of approval,- (i) where the institution or fund is approved under clause (vi) [as it stood immediately before its amendment by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020], within three months from the Ist day of April, 2021; (ii) where the institution or fund is approved and the period of such approval is due to expire, at least six months prior to expiry of the said period; (iii) where the institution or fund has been provisionally approved, at least six months prior to expiry of the period of the provisional approval or within six months of commencement of its activities, whichever is earlier: [or] [(iv) [***] where activities of the institution or fund have— (A) not commenced, at least one month prior to the commencement of the previous year relevant to the assessment year from which the said approval is sought; (B) commenced [*** Jat any time after the commencement of such activities:] 6. Assessee, in terms of the above provisions, first applied for a provisional approval under sub-clause (B) of clause (iv) of first proviso to subsection (5) of section 80G within and subsequently (refer clause 2 in Form 10A) and was given the provisional registration up to AY 2024-25 on 04.04.2022. In the application for final approval in Form 10AB, it is noticed that assessee has once again mentioned same section i.e. sub-clause (B) of clause (iv) of first proviso to subsection (5) of section SOG whereas the correct section code under which the assessee ought to have selected is clause (iii) of first proviso to subsection (5) of section 80G. We also noticed that ld. CIT(E) has treated the application as one filed under sub-clause (B) of clause (iv) of first proviso to subsection (5) of section 80G and accordingly rejected the application for not fulfilling the stipulated conditions prescribed for filing application for approval in Form 10AB. 6.1. From the perusal of forms filed and the facts of the case, in our considered view, there is merit in claim of the ld. AR that assessee has selected the wrong section code ITA No. 287/Ahd/2025 V-One Society vs. CIT(E) Asst.Year –N.A. - 5– inadvertently while filing the application for final registration in Form 10AB. Further, we notice that assessee did not have the opportunity of being heard before ld. CIT(E) due to incorrect course of action advised, which otherwise assessee might have explained the facts to avoid the impugned rejection. In view of these discussions and respectfully following the above decision of the Kolkata Bench in the case of North Eastern Social Research Centre (supra), we remit the issue back to the file of ld. CIT(E), with a direction to grant final approval to assessee under Clause (iii) to first proviso to section 80G(5) of the Act, if assessee is otherwise found eligible. We also direct ld. CIT(E) to decide the application of the assessee for final approval as quickly as possible before the expiry of the provisional approval granted in order to enable the assessee to have the benefit of section 80G without any break. It is ordered accordingly. 7. In the result, appeal of the assessee is allowed for statistical purposes.” 7. In view of the facts of the assessee’s case and in light of the judicial precedents referred to above, in interest of justice, the matter is hereby restored to the file of CIT(Exemptions), for de-novo consideration. 8. In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 26/05/2025 Sd/- Sd/- (DR. BRR KUMAR) (SIDDHARTHA NAUTIYAL) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad; Dated 26/05/2025 TANMAY, Sr. PS TRUE COPY आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad "