Facts of the Case

The assessee, Loksakha Welfare Society, is a charitable society incorporated on 19.01.2004 with objects including relief of the poor, education, medical relief, yoga, preservation of environment and advancement of other charitable purposes. The assessee was earlier granted registration under Section 12AA on 21.11.2007 and had also been granted approval under Section 80G from Assessment Year 2007-08 onwards. Pursuant to amendments introduced by the Finance Act, 2021, the assessee filed Form No. 10A on 02.09.2021 seeking renewal of approval under Section 80G. Due to inadvertent error, the application was filed under an incorrect clause applicable to provisional registration. Subsequently, the assessee filed Form No. 10AB on 23.08.2024 seeking approval under Section 80G(5)(iii). The CIT (Exemption), Kolkata rejected the application by order dated 22.02.2025 on the ground that Form 10AB was filed beyond the extended due date of 30.06.2024 prescribed under CBDT Circular No. 07/2024 and also cancelled the provisional approval. The assessee filed an appeal before the Tribunal with a delay of 112 days.

Issues Involved

Whether the delay of 112 days in filing the appeal deserved to be condoned, whether rejection of approval under Section 80G solely on account of delay in filing Form 10AB and procedural lapse was justified, and whether the matter required remand for fresh examination of the charitable activities of the assessee.

Petitioner’s Arguments

The assessee submitted that the delay in filing the appeal was caused due to bona fide reasons, including incorrect professional advice, and was neither deliberate nor due to negligence. It was contended that the assessee is an existing charitable society since 2004 which had continuously enjoyed approval under Section 80G. It was argued that rejection was based purely on technical grounds without examination of the genuineness of charitable activities and that the assessee should be granted one more opportunity to place relevant materials on record.

Respondent’s Arguments

The Revenue relied on the order passed by the CIT (Exemption) and contended that the rejection of approval under Section 80G was justified in view of non-compliance with statutory timelines prescribed for filing Form 10AB.

Court Order / Findings

The ITAT Kolkata condoned the delay of 112 days after being satisfied that the assessee had shown sufficient and reasonable cause. On merits, the Tribunal held that the CIT (Exemption) had rejected the application merely on account of delay in filing Form 10AB without properly examining the charitable nature and genuineness of the activities of the assessee, which was an existing society carrying out charitable activities since 2004. The Tribunal observed that procedural lapses should not defeat substantive rights. In the interest of justice, the Tribunal set aside the order of the CIT (Exemption) and remanded the matter to his file for fresh adjudication after granting adequate opportunity to the assessee to furnish necessary details and explanations.

Important Clarification

The Tribunal clarified that while processing applications under Section 80G, the primary consideration must be examination of objects and genuineness of charitable activities. Procedural delays or technical errors in filing statutory forms should not be the sole basis for rejection without affording reasonable opportunity of hearing.

Final Outcome

The appeal filed by the assessee was partly allowed for statistical purposes. The order passed by the CIT (Exemption), Kolkata rejecting approval under Section 80G was set aside, and the matter was restored to his file for fresh adjudication in accordance with law after granting due opportunity to the assessee.

Source Link - https://itat.gov.in/public/files/upload/1767179324-3XTaV6-1-TO.pdf

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