ITAT Directs Reconsideration Of Form No.10AB For S. 80G Registration By Giving Proper Opportunity Of Being Heard To Assessee Trust

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has directed the department to reconsider Form No.10AB for final registration under section 80G of the Income Tax Act by giving the proper opportunity of being heard to the assessee trust.

The bench of T.R. Senthil Kumar (Judicial Member) and Waseem Ahmed, (Accountant Member) have observed that the time is extended up till 30-09-2023, whereas the assessee filed a belated application on 28-02-2023. The circular also clarified that even in the case, where the application in Form No. 10AB was rejected by the CIT(E) on or before issuance of this circular dated 24.05.2023, the assessee trust can make the fresh application in Form 10AB on or before 30-09-2023. Thus, the CIT(E) has not considered clause 7 of Circular No. 6 of 2023 by rejecting the application which is against the circular issued by the CBDT.

The assessee is a trust which was created on 29-04-2021 with objects of animal welfare and help to poor and needy people. The assessee trust was granted Final Registration under section 12AB(i) by the CIT(E). The assessee trust also granted provisional registration under section 80G(5). However, the assessee filed Form 10AB for final registration under section 80G(5), which was rejected by the CIT(E) on the ground that the application was filed beyond the limitation period prescribed under the Act and extended period of limitation granted by the CBDT by way of various Circulars issued from time to time and thus also rejecting the provisional registration granted under 80G(5).

The assessee submitted an affidavit filed by the Trustee explaining that provisional registration under section 80G(5) was granted by CIT(E). The Accountant of the trust Prerna Shah resigned from his job and then after the trust appointed one Rakesh Kaladas Parmar as a new Accountant, who was not aware of the amended income tax provisions and validity of registration granted under section 80G(5) of the Income Tax Act.

The department contended that under the new provisions of the Act, a strict time limit of six months period before the expiry period of provisional registration or within six months of commencement of the activities of the Trust, whichever is earlier is prescribed under the Act. The period was further extended up to 30-09-2022 by CBDT circular from 31st August 2021. In the assessee's case, Provisional Registration was granted on 01-10-2021 under section 80G(5)(iv) for a period of three years from A.Ys. 2022-23 to 2024-25. However, the assessee filed its application only on 28-02-2023 which is beyond the time limit prescribed under the Act and extended by the Board by way of various circulars.

The tribunal noted that affidavits filed by the Trustee and the Accountant, that they were in the bona fide wrong impression that the Provisional Registration granted u/s. 80G(5) on 01-10-2021 is the sufficient registration and not aware of the Final Registration which is required to be applied within six months of the provisional registration or six months of the commencement of the activities of the Trust.

Counsel For Appellant: Sulabh Padshah

Counsel For Respondent: Akhilendra Pratap Yadav

Case Title: Best Buds Pet Care Versus CIT(Exemption)

Case No.: ITA No. 731/Ahd/2023

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