2023 (3) TMI 1049 - AT - Income Tax

Provisional approval of registration u/s 10(23C) - Whether PCIT/CIT has erred in passing provisional order under (iv) of 1st proviso to clause (23C) of section 10 with effect from Ay 2021-22 instead of AY 2020-21? - HELD THAT - We direct the authorities below to grant approval w.e.f. AY 2020-21 instead of 2021-22. Thus, grounds raised by the assessee are allowed.

Summary

Issues Involved:

1. The provisional approval of registration u/s 10(23C) of the Income Tax Act, 1961.
2. The effective assessment year for the said approval.

Summary:

Issue 1: Provisional Approval of Registration u/s 10(23C)

The assessee contested the provisional approval of registration u/s 10(23C) of the Income Tax Act, 1961, arguing that it should be granted from AY 2020-21 instead of AY 2021-22.

The assessee argued that the decision was in clear contravention of the CBDT Circular, which clarified the application of the amended provisions.

The Ld. CIT DR opposed these submissions and supported the orders of the authorities below.

Issue 2: Effective Assessment Year for Approval

The Tribunal considered the amendments to section 10, particularly clause (23C), and noted the procedural requirements for approval and the prescribed timelines.

It was highlighted that the amendments, effective from 1st April 2021, required applications to be made within specific periods depending on the type of institution and the timing of the application.

The Tribunal directed the authorities below to grant approval w.e.f. AY 2020-21 instead of 2021-22, thereby allowing the grounds raised by the assessee.

Conclusion:

In view of the above, the appeal of the assessee was allowed, and the order pronounced in the open Court on 22/03/2023.