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TMI Blog2024 (4) TMI 499X X X X Extracts X X X X X X X X Extracts X X X X ..... ce the reliefs claimed by them are identical and common, these Writ Petitions were heard together, and disposed of by this common order. B. The Factual Matrix: 2. The following facts in W.P.No.27030 of 2023 are adverted to illustrate the factual background :- 2.1. The petitioner trust was established on 09.09.2021 and is allotted a Permanent Account Number under the Income-Tax Act, 1961 (from now on referred to as 'the Act'). The trust is formed with charitable and educational goals. The petitioner had to apply for a provisional registration/approval under the Act as per the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 which amended the provisions relating to the application for the registration. As per the said Act, the first and second proviso to Section 10(23C), Section 12A(1)(ac) and the first and second proviso to Section 80G(5) of the Act were amended. The amended provisions inter alia provide the following:- "a) New trusts or institutions need to apply for the 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/ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 subsection (1) of section 12A of the Act, till 30.09.2023 where the due date for making such application has expired prior to such date." 2.5. Thus, it can be seen that while extending further time, (a) in respect of the existing trusts, time was extended both in respect of proviso to clause (23C) of Section 10 or under sub-clause (i) of clause(ac) of subsection (1) of Section 12A or under clause (i) of the first proviso to subsection (5) of Section 80G of the Act till 30.09.2023; (b) While the same extension is granted to the new trusts also in respect of the first proviso to clause (23C) of Section 10 or under sub-clause (iii) of clause (ac) of subsection (1) of Section 12A, the time extension is not granted in respect of the first proviso to sub-section (5) of Section 80G of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e first proviso of section 10(23C) or sub-clause (i) of section 12A(1)(ac). Hence, funds or institutions which take benefit of the extension of the due dates for filing Form No. 10A under the first regime or the second regime, were also allowed to make an application for approval u/s 80G(5) (beyond the due date) so that the donations received by them are also eligible for deduction under section 80G. However, the requirement for new funds or institutions to seek approval by making an application in Form No. 10AB (as it stood prior to amendment by Finance Act 2023) arise only when such funds or institutions were provisionally approved u/s 80G(5) and had been granted approval in Form No. 10AC, or the approval to such funds or institutions is due to expire. Such funds or institutions were required to seek approval u/s 80G(5) by making application in Form No. 10AB within the due date (i.e. 30.09.2022). Further, the amendments made to section 115TD of the Act by Finance Act, 2023 do not directly or indirectly impact such funds or institutions. Hence, there is a difference between the existing funds or institutions which were required to seek approval under clause (i) of the first pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould submit that the only question which was before the respondents was the hardship faced by the trusts in digital filing of the respective forms. While considering the same, an extension has been given both in respect of the existing as well as the new trusts on the first occasion and when the respondents thought it fit to extend the same for the second time up to 30.09.2023, there is no rationale in leaving out the provisions in respect of Section 80G of the Act alone in respect of the new trusts. The said classification does not in any manner relate to the object sought to be achieved and as such, there is no intelligible differentia in making a distinction between existing and new trusts. Therefore, the impugned subordinate legislation is liable to be struck down as arbitrary and violative of Article 14 of the Constitution of India. 4.2. He also submits that once the respondents choose to extend the time, then, there is a vested right on the part of the petitioner trusts and their very existence is put into jeopardy since the donors will not get an exemption under Section 80G of the Act in the absence of approval and therefore, would submit that the impugned legislation is il ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pgraded as Assistant Commissioner (CT) and Ors. (2019) 13 SCC 225 2. Union of India and Ors. Vs. Cosmo Films Limited (2023) 9 SCC 244 3. LG Electronics India Pvt. Ltd. Vs. State of Tamil Nadu and Anr. (2023) 114 GSTR 197 4.6. The learned Additional Solicitor General of India, by further adverting to the judgment of the Hon'ble Supreme Court of India referred by the learned Counsel for the petitioners in Association of Old Settlers of Sikkim (cited supra) would contend that in the said case, relief was granted by the Hon'ble Supreme Court of India in exercise of its powers under the Article 142 of the Constitution of India and such relief cannot be granted by this Court. E. The Point for Consideration: 5. We have considered the rival submissions made on either side and perused the material records of the case. Upon consideration of the submissions made, the following two questions arise for consideration in these cases:- Whether or not the classification made by the respondents in the matter of grant of extension of time between the existing and new trusts and to apply for approval in respect of clause (i) of the first proviso to subsection (5) of section 80G of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 6.3. Even though the counter-affidavit attempted to furnish reasons for making the above distinction, ultimately, no reason for leaving out clause (i) of the first proviso to Section 80G5 in respect of the new trusts is given. The relevant paragraph No.12 was extracted above. It only reiterates the eligibility of dedication and to the amendments made to Section 115TD of the Finance Act, 2023. Thus, while we agree with the contention of the learned Additional Solicitor General of India that it is well within the powers of the first respondent Board to extend time, and it would also be well within the power of the first respondent Board to make any classification between the trusts, ultimately, we could not find any reason whatsoever in leaving out the new trusts in respect of approval under Section 80G alone. 6.4. As a matter of fact, we entertained a doubt as to whether it was a conscious decision at all taken in the first place or an inadvertent omission of a sentence while drafting the impugned Circular No.6 of 2023. Though the respondents filed an additional counter-affidavit, no particulars as to the decision being taken between any date after the issue of the earlier Circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... object of the circular. The discrimination is artificial. The respondents are evasive and could not provide any rationale for such a classification. Accordingly, we hold that the impugned clause (ii) of the Circular, dated 24.05.2023 is arbitrary and violative of Article 14 of the Constitution of India and accordingly, would be ultra vires the Constitution. 6.7. Because we find that clause (ii) of the impugned circular is unconstitutional, we direct the first respondent to consider the applications of the petitioners as to the recognition/approval in respect of clause (i) of the first proviso to sub-section (5) of section 80G of the Act as within time and consider the same and pass orders thereon on merits as per law. G. The Result : 7. In the result, these Writ Petitions are allowed on the following terms:- (i) The clause 5(ii) of Circular No.6 of 2023 bearing F.No.370133/06/2023-TPL, dated 24.05.2023 of the first respondent is declared as illegitimate, arbitrary, and ultra vires the Constitution of India; (ii) The respondents are directed to consider the applications submitted by the petitioners as to the recognition/approval in respect of clause (i) of the first proviso ..... X X X X Extracts X X X X X X X X Extracts X X X X
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