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TMI Blog2024 (3) TMI 1201X X X X Extracts X X X X X X X X Extracts X X X X ..... have gone through the CBDT Circular No.6 of 2023 dated 24.03.2023 and noted that the CBDT has clarified the provision relating to charitable and religious trusts and has extended the timeline for furnishing Form No.10A seeking provisional registration/approval within the extended period up-to 30.09.2023. Timeline prescribed for filing Form No.10AB for registration u/s. 12A of the Act in the case of assessee trust has been extended up-to 30.09.2023 after considering the genuine hardship faced by charitable institutions vide various CBDT circulars and finally, vide Circular No.6/2023 dated 24.05.2023. Similarly, the timeline prescribed for filing Form No.10A for recognition u/s. 80G of the Act was also extended up-to 30.09.2023 by the same circular for trusts filing registration under clause (i) to first proviso to section 80G(5) of the Act. Once, the CBDT has extended the timeline for filing Form No.10AB for recognition u/s. 12A of the Act and also for filing Form No.10A for recognition u/s. 80G of the Act extended up to 30.09.2023 for trusts filing registration under clause (i) of first proviso to section 80G(5) of the Act, we find no difference in continuing hardship as recognized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to exist since 14.07.2017, as per the date of incorporation/registration. The assessee trust exists much before the commencement of new regime of registration and approval. The assessee trust namely Shri Ramajayam Charitable Trust with PAN Number AAUTS0393L filed an application dated 17.03.2023 in Form 10AB under Rule 11AA of the Income Tax Rules, 1962 (hereinafter the Rules ), seeking approval under clause (iii) of first proviso to sub-section (5) of section 80G of the Act. The CIT(Exemption) noted that the assessee had been granted provisional approval in Form No.10AC on 23.09.2021 u/s. 80G(5)(iv) of the Act, for the period commencing 23.09.2021 to assessment year 2024-25. Before CIT(Exemption), the assessee vide letter dated 10.08.2023 admitted that the date of commencement of the activities of the Trust is 14.07.2017. The CIT(Exemption) noted that as per the provisions of section 80G(5) of the Act, various time limit has been prescribed within which the assessee is required to file application for approval, depending upon the various categories of trusts/institutions mentioned therein. He noted the fact that in the present case, the assessee is provisionally approved u/s. 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act, the application filed by the assessee trust on 17.03.2023 was to be treated as time barred and invalid one, as the same was not filed within the due date. Hence, the CIT(Exemption), considering the decision of Co-ordinate Bench of Kolkata Tribunal in the case of Bishnupur Public Education Institute in ITA Nos.585 to 587/Kol/2020, order dated 20.04.2022 (reported in 139 taxman.com 121), rejected the assessee s application filed on 17.03.2023 in Form No.10AB u/s. 80G(5)(iii) of the Act as not-maintainable. Aggrieved, assessee is in appeal before the Tribunal. 5. Before us, the ld. counsel for the assessee Shri N. Arjun Raj, CA argued and admitted the facts as narrated above. He admitted that the assessee trust commenced its activities on 14.07.2017 and assessee s present application was filed on 17.03.2023 in Form No.10AB u/s. 80G(5) of the Act. He also admitted that the assessee is provisionally approved u/s. 80G(5)(iv) of the Act. But, he took us through the first proviso to sub-section (5) of section 80G of the Act and argued the first proposition. The first proposition of the assessee trust is that the timelines prescribed for filing Form No.10AB for recognition/registrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmencement of activities in clause (iii) to proviso to Section 80G of the Act may not be applied since the commencement of the activities had happened prior to introduction of new regime and he further pleaded for treating the compliance of the timeline of six months prior to the expiry of provisional registration, which expires on 30.09.2023 and complied with by the assessee as full compliance by holding the proceedings initiated by the assessee as maintainable for grant of final recognition/approval u/s. 80G(5) of the Act. 5.3 Alternative and fourth proposition set out by ld. counsel is that the final recognition has to be granted from the date of application filed by the assessee and hence, pleaded that the order of CIT(Exemption) be set aside with a direction that the application filed by assessee is maintainable and to decide the final approval u/s. 80G(5) of the Act on merits from the date of such application. The ld. counsel for the assessee relied on the decision of Co-ordinate Bench of Jaipur Tribunal in the case of Go Gram Eco Foundation in ITA No.504/JP/2023, order dated 28.11.2023 and Jodhpur Tribunal in the case of Bhamashah Sundarlal Daga Charitable Trust in ITA No.27 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was rightly rejected by CIT(E). He submitted that the CIT(E) does not have powers to condone the aforesaid delay as per the Act. The assessee trusts have contravened the provisions of law by not following the timeline specified therein and not filing the relevant Form 10AB within the specified due dates. Hence, its submitted that even if these trust cases are sent back to CIT(E), CIT(E) has no power to condone delay thereon. In this context, the revenue placed reliance on decisions quoted by CIT(E), the case of the Hon ble Jurisdictional Madras High court in the case of All Angels Educational Society v CCIT [2016] 72 taxmann.com 251. In this case, while considering the issue whether the CIT(E) has power to condone the delay in filing application for grant of approval under section 10(23C) of the Act or not, the Hon ble High Court held that where there is no provision to empower the statutory authority to condone the delay, then the authority cannot condone such delay. The Hon ble High Court has considered the judgments of Hon ble Supreme court in the case of State of U.P v Harish Chandra AIR 1996 SC 2173 as well as UOI v Kirloskar Pneumatic Co. Ltd. 1996 taxmann.com 575 (SC). Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istration is within six months of expiry of provisional registration if they are applying under sub clause (iii) of proviso to section 80G(5) of the Act. This will be harmonious interpretation. He argued that it would be pertinent to note that the assessee trusts have also relied on the case of Bhamashah Sundarlal Daga (supra) in their favour. However, in the said case, the Tribunal has clearly held that clause (iii) to proviso to section 80G(5) of the Act would apply to new trust cases, as reproduced above. Thus, it was argued that all these trust cases where assessee has applied u/s 12A(1)(ac)(vi) and 80G(5)(iv) of the Act in new regime are to be considered as new trust cases and for such new trust cases, both the due dates - D1 and D2 are applicable. Among the two due dates, whichever being the earliest is to be considered as due date for filing Form 10AB. i.e., assessee trust should file Form 10AB within six months of commencement of activities (D1 being the earliest) or within the time limit extended by CBDT last extended till 30.09.2022 for approval u/s 80G of the Act. 6.4 Further, it was argued that in some trust cases, as stated above, wherein registration u/s 12A of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licability would be on the taxpayer to show that its case comes within the parameters of the exemption notification and it was further held that when there is ambiguity in the exemption notification, which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the taxpayer and it must be interpreted in favour of the revenue. In light of the above decision, it was argued that if at all there is any ambiguity in interpreting the proviso to section 80G, it must be interpreted in favor of the revenue as the same provision is not a charging section. In this context attention is drawn to Paragraphs 3,7,10,12,20,28,38, 41,43,46,47,48 and 52 of the Apex court decision. 6.5 Further reliance was placed by Ld. CIT-DR on the decision rendered by Hon ble SC in the case of Checkmate Services P. Ltd v Commissioner of Income Tax[2022] 143 taxmann.com 178 (SC). In this case, the Hon'ble Supreme Court in its judgment in para 48 held that: - One of the rules of interpretation of a tax statute is that if a deduction or exemption is available on compliance with certain conditions, the conditions are to be strictly complied with. This rule is in line with the general ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rounds for rejection. 7. We have heard rival contentions and gone through the facts and circumstances of the case. First of all, it is to be noted that the assessee trust has commenced its activities on 14.07.2017 and assessee is also provisionally approval u/s. 80G(5)(iv) of the Act. The assessee trust was required to file application in Form No.10AB u/s. 80G(5)(iii) of the Act within the time period of six months prior to expiry of the period of provisional approval or within six months of commencement of its activities, whichever is earlier, in term of clause (iii) of first proviso to sub-section (5) of section 80G of the Act. The relevant proviso reads as under:- Provided that the institution or fund referred to in clause (vi) shall make an application in the prescribed form and manner to the Principal commissioner or Commissioner, for grant of approval, - (i) where the institution or fund is approved under clause (vi) [as it stood immediately before its amendment by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020], within three months from the 1st day of April, 2021; (ii) where the institution or fund is approved and the period of such ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pproval shall be valid for a period of 5 years. Thus, existing trusts are required to apply for fresh registration/approval and once the registration/approval is granted it is valid for five years. (b) New trusts are required to apply for provisional registration/approval at least one month prior to the commencement of the previous year relevant to the assessment year from which the said registration/approval is sought. Such provisional registration/approval is valid for a maximum period of three years. (c) Provisionally registered/approved trusts will again need to apply for regular registration/approval in Form No. 10AB at least six months prior to the expiry of the period of provisional registration/approval or within six months of the commencement of activities, whichever is earlier. This registration/approval is valid for a period of five years. On consideration of difficulties in electronic filing of Form No. IOAB, the Board in exercise of its powers under section 119 of Act extended the due date for electronic filing of Form No. 10AB to 30.09.2022 vide Circular No 8 of2022 dated 31.03.2022. (d) The trusts once approved/registered for five years are required to apply at least ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so to clause (23C) of section 10 or under sub-clause (i) of clause (ac) of sub-section (1) of section 12A or under clause (i) of the first proviso to sub-section (5) of section 80G of the Act, till 30.09.2023 where the due date for making such application has expired prior to such date; (ii) Form No. 10AB, in case of an application under clause (iii) of the first proviso to clause (23C) of section 10 or under sub-clause (iii) of clause (ac) of sub-section (I) of section 12A of the Act, till 30.09.2023 where the due date for making such application has expired prior to such date. 6. In view of the above, trusts may now apply for registration/approval under clause (i) or clause (iii) of the first proviso to clause (23C) of section 10 or sub-clause (i) or sub-clause (iii) of clause (ac) of sub-section ( I) of section 12A of the Act by 30.09.2023 and where such application is made by the said date and registration/approval is granted, the provisions of clause (iii) of sub-section (3) of section 115TD of the Act shall not apply on account of delay in making application in accordance with the provisions of clause (i) or (i ii) of the first proviso to clause (23C) of section 10 or subclau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w.e.f. 01.04.2021 which states that notwithstanding anything contained in clauses (a) to (ab), the person in receipt of the income who wants to claim benefit of section 11 12 is to made an application in the prescribed form 10A or 10AB and in prescribed manner to the Principal Commissioner or Commissioner, for registration of the trust or institution. 7.3 Similarly, for approval u/s. 80G of the Act, similar changes were effected in the provisions of section 80G(5), the first and second provisos, which were made applicable with effect from 01.04.2021 for existing trusts as well as new trusts or entities. This amendment is brought in by Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 amended the provisions related to application by a trust for registration or approval by amending the first and second proviso to clause (23C) of section 10, clause (ac) of sub-section (1) of section 12A of the Act, inserting section 12AB of the Act and amending the first and second proviso to sub-section (5) of section 80G of the Act. 7.4 We are concerned with the provisions of section 80G of the Act in these cases. In view of the above provisions, the deduction u/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation is a belated one. 7.5 We have considered the case laws of Co-ordinate Bench of Jaipur Tribunal in the case of Go Gram Eco Foundation, supra and noted that the Jaipur Bench has considered this issue of delay in application filed in Form No.10AB in term of clause (iii) of first proviso to section 80G(5) of the Act, wherein the provisional registration was granted to the assessee trust on 16.10.2021 in Form No.10A u/s. 12A(1)(ac)(vi) and under clause (iv) of first proviso to section 80G(5) of the Act. In that case, the provisional registration was granted in form No.10AC on 27.10.2021. Admitted fact in the case is that the assessee trust commenced its activities from 13.10.2021 being new trust and assessee filed application for grant of approval under clause (iii) of first proviso to section 80G(5) on 16.12.2022, which is delayed by almost about 2.5 months from the extended date. The Tribunal considered this issue and finally in para 6.1 noted and the relevant reads as under:- There is no dispute as to the fact that assessee is provisionally registered till A.Y. 2024-25 vide order dated 27.10.2021. Thus it has complied with section 80G(5). The proviso to this section only deals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e also relating to taxation of old regime prior to 01.04.2021. Hence, these are clearly distinguishable on facts and hence, not applicable. In term of the above, we now go through the factual aspect. 7.8 After hearing the arguments of ld. counsel for the assessee and ld. CIT-DR as noted above, we find from the facts that the timeline prescribed for filing Form No.10AB for registration u/s. 12A of the Act in the case of assessee trust has been extended up-to 30.09.2023 after considering the genuine hardship faced by charitable institutions vide various CBDT circulars and finally, vide Circular No.6/2023 dated 24.05.2023. Similarly, the timeline prescribed for filing Form No.10A for recognition u/s. 80G of the Act was also extended up-to 30.09.2023 by the same circular for trusts filing registration under clause (i) to first proviso to section 80G(5) of the Act. But the above extension was not extended beyond 30.09.2022, unlike other forms which were extended up to 30.09.2023 to the disputed forms namely Form No.10AB for renewal of recognition u/s. 80G(5) of the Act under clause (iii) of the first proviso to section 80G(5) of the Act. Once, the CBDT has extended the timeline for fili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the case of CIT-1982 Charitable Trust vs. ITO in ITANo.827/CHNY/2023, the trust was incorporated on 24.03.2021 and assessee filed application for obtaining provisional registration u/s. 12A of the Act in Form No.10A on 29.04.2021. The CIT(Exemption) granted provisional registration u/s. 80G(5) of the Act in Form no.10A on 28.05.2021. The assessee moved final registration application u/s. 12A of the Act in Form No.10AB on 29.09.2022 and final registration was granted u/s. 12A of the Act in Form No.10AD vide dated 30.05.2023. The assessee finally moved application for obtaining final registration u/s. 80G of the Act in Form No.10AB on 14.11.2022. The final registration was rejected by CIT(Exemption) u/s. 80G of the Act on 30.05.2023. The Revenue brought out the fact that the date of commencement of activities is also 30.03.2022 but assessee wrongly claimed commenced of activity date as 27.05.2022, which is an afterthought. According to Revenue, the assessee is covered by the extended date of 30.09.2022, extended by CBDT and not eligible for final registration u/s. 80G and the CIT(Exemption) has rightly rejected the approval. It was argued by CIT-DR that having applied provisional ..... X X X X Extracts X X X X X X X X Extracts X X X X
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