ITAT Restores 80G Application for Fresh Consideration Due to Non-Compliance Caused by Genuine Circumstances

The current writ petition is filed in Income Tax Appellate Tribunal “A” Bench, Pune, by Kalyan Charity Trust (Petitioner) against CIT (Exemptions), Pune (Respondent). The court announced its decision on 31/07/2025. The petitioner here is challenging an order dated 17.02.2025 passed by the Ld. Commissioner of Income Tax (Exemption), Pune [“CIT(E)”], where their application dated 25.09.2024, filed in Form No. 10AB under clause (iii) of the first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961 (the “Act”), was rejected.

The petitioner had earlier applied for provisional approval under Section 80G(5), which it received on December 01, 2022. This provisional approval allows the petitioner to collect donations for a limited time while it works toward getting final approval. To get this final approval, the trust had to file Form No. 10AB within a specific time frame. According to the law, there are two possible timelines for filing this form: within six months from the date of commencement of its activities or within six months before the expiry of the provisional approval, whichever is earlier.

The petitioner has been active since 1961, meaning its activities had started long before it received provisional approval. Therefore, it was required to file the application for regular approval within six months from December 01, 2022, i.e., by 30th June 2023. However, the trust submitted the application late, on September 25, 2024, which is beyond the allowed timeline. The CIT(E) discovered the application was time-barred and hence rejected it.

The first notice was issued on November 06, 2025, by the CIT(E), asking the trust to submit all relevant documents to verify the genuineness of its charitable activities. This document asked for proof of the starting date of its activities, details of donations received, proof of identity of trustees and a description and evidence of charitable work. The petitioner replied with some documents. When the CIT(E) reviewed the documents, it found discrepancies in them and issued a second notice dated January 30, 2025, giving a deadline of February 06, 2025, for explanation. These discrepancies included missing notes on activities and details of beneficiaries, incomplete donor details and donation receipts, unexplained additions to the trust’s corpus funds, expenses on religious purposes exceeding the permitted 5%, lack of proof like bills, photographs, and documentary evidence, violation of the deadline to apply for final approval, etc. However, the petitioner did not reply to the second notice. As a conclusion, the CIT(E) assumed the petitioner did not have any explanation and hence rejected its application. Also, the previous provisional approval was granted on December 01, 2022.

The CIT(E) explained that the Income Tax Act does not give them the power to condone the delay in filing Form 10AB, and only CBDT can grant deadline extensions through its official circulars, and in this case, the last extended deadline was June 30, 2024. Since the trust filed the form on September 25, 2024, the application was considered invalid and time-barred, regardless of its merits. IT also took reference from an earlier judgement, in which the court ruled that such deadlines are strict and mandatory, and even if there is an honest reason, the authorities cannot relax these rules unless permitted under the law.

The petitioner was not satisfied with the decision and hence filed an appeal in the Income Tax Appellate Tribunal (ITAT), where it argued that they did responded to the first notice and provided many details. Also, they missed the second notice because the responsible employee was on leave. Most of the documents asked for in the second notice were already submitted or are ready to be submitted. The petitioner is already registered under Section 12A, which recognises its charitable status. Hence, they requested an additional opportunity to present their side and submit the required details. They requested one more opportunity to present their case and submit the required details. The Department’s Representative (DR) did not raise any objections to giving the trust another chance.

The ITAT, when analysing the whole situation, directed the petitioner to submit all documents and replies without asking for further time. The CIT(E) must examine the case again on its merits and pass a fresh order. The Tribunal allowed the appeal for statistical purposes, meaning they did not decide on the merits themselves but gave the trust another opportunity at the CIT(E)’s level.