Strict adherence to deadlines is required for Section 80G(5) applications; the ITAT cannot grant extensions. HC

Facts-

• A charitable trust received provisional tax-exempt status under a specific section of the Income Tax Act on September 24, 2022. To gain full exemption, the trust needed to file an application (Form 10AB) within six months. Unfortunately, the trust filed the application late, on August 29, 2023.
• The tax authority overseeing exemptions (Commissioner) rejected the application due to the delay. They argued that since the law doesn't allow for extending deadlines in such cases, and the trust missed the filing window, their application couldn't be accepted.

Background:

• A charitable trust received provisional tax-exempt status under Section 80G(5) of the Income Tax Act on September 24, 2022.
• To convert this to full exemption, the trust needed to file Form 10AB within six months (by June 28, 2023).

Missed Deadline and Appeal:

• The trust filed the application late, on August 29, 2023.
• The Commissioner (Exemption) rejected the application due to the delay.
• The trust appealed the decision.

Reason for Dismissal:

• The Tribunal dismissed the appeal based on the following:
  • The law doesn't allow the Tribunal to extend deadlines for filing Form 10AB (Section 80G(5) of the Act).
  • A separate law regarding deadlines (Limitation Act) doesn't apply to these proceedings.
  • Even though a new circular offered extended deadlines later (CBDT Circular No. 07/2024), it couldn't be applied in this case because the trust's application was rejected before the circular was issued.
  • Previous court rulings support the position that the Tribunal lacks the power to condone delays in such situations.

Outcome:

• The trust's appeal for full tax exemption under Section 80G(5) was dismissed.

Topic-Smt. Mangla Ramniwas Mandhani ABMM Awas Yojana Foundation versus Commissioner of Income-tax (Exemption)

Citation- 2024 TAXONATION 155 (ITAT-DELHI)

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