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2024 (6) TMI 976 - AT - Income TaxIssues Involved: 1. Rejection of application for final approval u/s 80G(5)(iii) of the Income Tax Act. 2. Interpretation of provisions and timelines for application under section 80G(5) of the Act. 3. Applicability of CBDT Circulars regarding extension of dates for filing applications. Summary: Issue 1: Rejection of application for final approval u/s 80G(5)(iii) of the Income Tax Act The assessee, already registered as a Charitable Institution u/s 12AA, applied for final approval u/s 80G(5)(iii) after being granted provisional approval. The CIT (Exemption) rejected the application, stating the time limit for final approval application had expired as the assessee commenced activities long before the provisional registration and filed the application after the extended date of 30.09.2022. Issue 2: Interpretation of provisions and timelines for application under section 80G(5) of the Act The Tribunal referred to the case of "Tomorrow's Foundation vs. CIT(Exemption)" and reiterated that institutions with provisional approval must apply for final registration at least six months before the expiry of the provisional period or within six months of commencement of activities, whichever is earlier. The Tribunal emphasized that the assessee could not have applied for final registration without first being granted provisional approval. Issue 3: Applicability of CBDT Circulars regarding extension of dates for filing applications The Tribunal clarified that the CBDT Circular extending the date to 30.09.2023 applies to institutions already registered before the amendment and seeking renewal without a break. This extension does not apply to institutions applying for fresh provisional registration. The Tribunal noted that the CIT (Exemption) misinterpreted the circulars, which are meant to aid institutions unable to apply within the initial stipulated period but not to restrict final registration applications under Clause (iii). Conclusion: The Tribunal held that the assessee's application for final registration was within the limitation period and directed the CIT (Exemption) to grant provisional approval under Clause (iii) to First Proviso to section 80G(5) of the Act, if the assessee is otherwise eligible. The CIT (Exemption) must decide on the application for final registration within three months of receiving the Tribunal's order. The appeal was allowed for statistical purposes.
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