Delay in Form 10AB Filing Not Sustainable When Prior 80G Approval Itself Was Granted Late

Overview of the ITAT Pune Decision

The Pune Bench of the Income Tax Appellate Tribunal in Vaibhav Shikshan Prasarak Mandal Vs CIT (Exemption) examined whether an assessee can be blamed for delay in filing Form 10AB when the earlier approval under Section 80G(5) was itself granted after the statutory time-limit within which the subsequent application was supposed to be made.

The Tribunal concluded that where the Department grants an approval order beyond the date by which the assessee is supposed to apply for continuation under clause (ii) of the first proviso to Section 80G(5), it is impossible for the assessee to comply with the prescribed six‑month advance filing requirement. In such a situation, the delay cannot be attributed to the assessee, and insistence on strict adherence to the literal timeline would amount to demanding performance of an impossibility.

Accordingly, the ITAT set aside the rejection order of the CIT (Exemption) and directed that regular approval under Section 80G(5)(ii) be granted on the basis of the application filed in Form 10AB.

Factual Background

Existing 12AB Registration and 80G Approval

  • The assessee is a charitable organisation engaged in educational activities, enjoying registration under Section 12AB(1)(b) of the Income Tax Act 1961.
  • Registration under Section 12AB(1)(b) had already been granted for A.Y. 2022-23 to A.Y. 2025-26 vide order dated 18.11.2024.
  • Further renewal under Section 12AB(1)(b) was subsequently provided for the period A.Y. 2026-27 to A.Y. 2030-31 through an order dated 05.02.2025.

On the 80G front:

  • Vide letter dated 18.11.2024, the assessee received final registration / approval under the second proviso to Section 80G(5) for A.Y. 2025-26.
  • After this approval, the assessee filed Form 10AB seeking regular approval under clause (ii) of the first proviso to Section 80G(5) for subsequent years. This application was filed on 19.12.2024.

Rejection by CIT (Exemption)

The CIT (Exemption) rejected the assessee’s Form 10AB application on a single ground:

  • As per the proviso to Section 80G(5), an institution already enjoying approval is required to apply for further approval at least six months prior to expiry of the current approval period.
  • Since the approval granted for A.Y. 2025-26 was treated as expiring with that year, the Department treated 30.09.2024 as the last permissible date for filing Form 10AB for the next block period.
  • Because the assessee submitted the application on 19.12.2024, i.e., after 30.09.2024, the CIT (Exemption) treated it as belated and rejected it, without any adverse remark on the objects, activities or genuineness of the trust.

Grounds Raised Before ITAT

The assessee challenged the rejection order before the ITAT, essentially contending:

  1. The CIT (Exemption) erred in refusing regular approval under clause (ii) of the first proviso to Section 80G(5) solely on the basis of alleged delay in filing Form 10AB.
  2. On the facts of the case, there was no delay attributable to the assessee, because the initial final approval under Section 80G(5) was itself communicated only on 18.11.2024, i.e., after the cut‑off date of 30.09.2024.
  3. The assessee had duly explained this impossibility before the CIT (Exemption), but the authority failed to consider those submissions and rejected the application in a mechanical manner.
  4. In view of the above, the assessee prayed that the rejection order be quashed and that regular approval under Section 80G(5)(ii) be granted for five years.

The assessee also reserved liberty to modify, add, or withdraw grounds if required.

Arguments Before the Tribunal

Submissions on behalf of the Assessee

Counsel for the assessee, Shri Sharma (for illustration), emphasised the following chronology: