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TMI Blog2024 (5) TMI 388X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act in Form No. 10AB on 30.03.2023. The assessee / Applicant Trust had been earlier granted or for provisional approval in Form No. 10AC on 24.03.2023 under Clause (iv) of first proviso. On receipt of application, CIT(E) observed that as per provisions of Section 80G(5) as it stands from 01.04.2021, in the present case, since the assessee had got provisional approval under Section 80G(5) of the Act, the applicant was required to file application in Form No. 10AB under Clause (iii) of first proviso to sub-Section (5) of Section 80G of the Act within the time period of at least six months prior to expiry of the period of the provisional approval or within six months of commencement of it's activity, whichever is earlier. Further, the CIT(E) was of the view that the aforesaid timeline prescribed are mandatory in nature in view of the Calcutta Tribunal decision in the case of Bishnupur Public Education Institute vs. Commissioner of Income Tax (Exemption) 139 taxmann.com 121 (Calcutta). Further, CIT(E) observed that CBDT on multiple occasions had extended the time line in filing the application in Form 10AB and vide Circular No. 8/2022 had extended the time line to 30.09.2022. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visional approval on 30.03.2023. Thereafter, within one week of grant of provisional registration, the assessee / Applicant Trust filed application for grant of final approval under Section 80G(5) of the Act on 30.03.2023. The said application filed by the assessee / Applicant Trust was rejected on 20.09.2023. Accordingly, the Counsel for the assessee submitted firstly that the assessee Trust had been incorporated on 08.03.2018 and therefore, the assessee / Applicant Trust had commenced it's activities much prior to the Amendment/changes introduced in 80G(5) of the Act for grant of approval effective from 01.04.2021. Therefore, the reasonable interpretation of the Rules for making application for grant of approval under Section 80G(5) of the Act is that the assessee should make application for grant of filing approval under Section 80G(5) of the Act within a period of six months from the date of grant of provisional registration. In the instant case, the Counsel for the assessee submitted that the assessee has satisfied the above time lines and has made application for grant of final registration (on 30.03.2023) within one week from date of grant of provisional registration (as on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing the order, the ITAT made the following observations:- "8. In our considered view, the ITAT in the case of CIT-1982, Charitable Trust in ITA No. 827/Chennai/2023 has elaborately discussed the issue under consideration before us, after taking into consideration various judicial precedents which have been rendered in the past on the instant subject. The ITAT, in our considered view has correctly observed that there is no reason to provide for a distinction within the same provision, so as to have a different timeline for accepting application for grant of final approval in respect for grant of registration in Form No. 10AB for registration under Section 12A of the Act and for grant of final registration under Section 80G(5) of the Act. The ITAT, in our view has correctly observed that there cannot be a distinction within the same provision for having different time-lines, without bringing out any exception and further, even the provisions of Section 80G are for the benefit of the donors, who are donating money to the charitable Trust for claiming exemption in their returns of income. It would be useful to reproduce their relevant extracts of the Ruling for reference: "7.2 The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for approval of Trust or any institution under the first and second proviso to sub-section (5) of section 80G of the Act is within six months of commencement of activities or at least six months prior to expiry of provisional approval. These two timelines are provided in first proviso to section 80G(5) of the Act. But, the CBDT time and again considering the difficulties in filing in the electronic mode of filing of Form No.10A or 10AB, in exercise of powers conferred upon it u/s. 119 of the Act, extended the due date for filing Form No.10A or 10AB up to 30.09.2022 vide Circular No.16/2021 dated 29.08.2021 and further, vide Circular No.6/2023 dated 24.05.2023 up to 30.09.2023. But the CBDT has extended this date up to 30.09.2023 in filing Form No.10A for registration u/s. 12A of the Act vide paras 6 to 8 of the Circular (which is reproduced in this order at para 7.1 above). The Revenue has filed the date and events which are undisputed in this case and as admitted by Revenue that in this case, provisional registration was granted u/s. 80G(5) of the Act in Form No.10A under the new regime under clause (iv) of the said provision vide dated 23.09.2021. Even the final registration wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C 595. 7.6 Even in the decision of Jodhpur Bench of this Tribunal in the case of Bhamashah Sundarlal Daga Charitable Trust, supra, the assessee Trust received provisional approval u/s. 80G(5) vide order dated 16.08.2022 for the period from 16.08.2022 to A.Y. 2025-26. The assessee has also got approval u/s. 12A(1)(ac) of the Act from A.Y. 2022-23 to A.Y. 2026-27 and assessee filed application in Form No.10AB for approval u/s. 80G(5) of the Act on 11.01.2023, which was treated as belated application and appropriate authority rejected the approval application filed by the assessee. But the Tribunal allowed the maintainability of application and directed the CIT(Exemption) to re-decide on merits. Hence, these decisions favors the case of the assessee and clearly applicable to the facts of present case before us. 7.7 The case law cited by the Revenue of Kolkata Tribunal in the case of Bishnupur Public Education Institute, supra wherein the Kolkata Tribunal has relied on the decision of Hon'ble High court of Madras in the case of All Angels Educational Society, supra and the Hon'ble High Court of Andhra Pradesh in the case of Aurora Educational Society vs. CCIT reported in 20 taxmann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... general circular, we are of the view that this specific provision of clause (iii) to first proviso to section 80G(5) cannot be excluded and or it has not been the intention of the CBDT while issuing the circular. There cannot be a distinction within the same provision without bringing out any exception and even this provision is for the benefit of the donors who are donating money to the charitable Trusts for claiming exemption in their returns of income. In our view, we agree with the argument of ld. counsel for the assessee that the timeline prescribed under clause (iii) of first proviso to section 80G(5) of the Act should be treated as directory and not mandatory especially considering the transitional nature of the amendment as brought out by the taxation of other laws (relaxation and amendment of certain provisions) act 2020 for bringing new regime. Hence, in our view, the CIT(Exemptions) should not have rejected the assessee's application in Form No.10AB only for this technical reason. We are of the view that the intention of CBDT in its circular clearly reflects their mind that once the timeline prescribed for filing Form No.10AB for recognition u/s. 12A of the Act has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his brings us to the second issue regarding the interpretation of Amendment in the provisions of Section 80G(5) of the Act, effective from 01.04.2021, which provides that where the institution or fund has been provisionally approved, then the applicant was required to file application in Form No. 10AB under Section 80G(5)(iii) of the Act within the period of six months prior to expiry of period of provisional approval or within six months of commencement of it's activities, whichever is earlier. We have observed in the earlier paragraphs that, on a reasonable interpretation, the assessee could be permitted to file application for grant of registration under Section 80G(5) of the Act in Form 10AB up to 30.09.2023 in view of extension granted to registration of Trust under Section 12A of the Act till 30.09.2023. In the case of Tomorrow's Foundation vs. CIT(E) 160 taxmann.com 174 (Kolkata - Tribunal), while passing the order the Tribunal has held that where assessee had been granted provisional approval under clause (iv) to first proviso to section 80G(5), application for final approval under clause (iii) to first proviso to section 80G(5) could not be rejected on ground that institut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of an application under clause (i) of the first proviso 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 or in case of an intimation under fifth proviso of subsection (1) of section 35 of the Act, till 30.06.2024; (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 or under clause (iii) of the first proviso to sub-section (5) of section 80G of the Act, till 30.06.2024. 4. It may be also noted that extension of due date as mentioned in paragraph 3(ii) shall also apply in case of all pending applications under clause (iii) of the first proviso to clause (23C) of section 10 or sub-clause (iii) of clause (ac) of sub-section (1) of section 12A or under clause (iii) of the first proviso to sub-section (5) of section 80G of the Act, as the case may be. Hence, in cases where any trust, institution or fund has already made an application in Form No.10AB under the said provisions on or before the issuance of this Circula ..... X X X X Extracts X X X X X X X X Extracts X X X X
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