9911796707
TMI Blog2024 (6) TMI 563X X X X Extracts X X X X X X X X Extracts X X X X ..... l Approval Application - Since the assessee society had obtained provisional approval w.e.f 05/04/2023 and therefore, it was incumbent upon them to have filed Form No. 10AB on or before 05/10/2023 which in fact they have filed on 23/09/2023 much before the expiry of six months on 05/10/2023. Assessee society case is therefore covered by first part / limb of Section 80G(5)(iii) proviso as second part/limb deals with the commencement of the activities which is not applicable herein at all in the facts and circumstances of the present case as the case is first of the provisional approval after incorporation of society on 06/09/2022 which was obtained by the assessee society on 05/04/2023. The Form No. 10AB as natural corollary for final approval of assessee society was filed on 23/09/2023 well within due date of expiry of six months period from date of provisional approval. The present case does not fall under second part / limb as the assessee society had commenced there activities from 18/04/2006 to 06/09/2022 / 05/04/2023 (80G) under Red Cross Society of India Act, 1920 the umbrella organization as stated and it is only on 06/09/2022 they acquired a new legal status upon incorporat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for grant of approval, (1) 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 approval is due to expire, at least six months prior to expiry of the said period; (iii) Where the institution or fund has been provisionally approved, at least six months prior to expiry of the period of the provisional approval or within six months of commencement of its activities, whichever is earlier; 7. The Clause (VI) as referred above is reproduced below:- (vi) in relation to donations made after the 31st day of March, 1992, the institution or fund is for the time being approved by the Principal Commissioner or Commissioner; 8. The Rule 11 AA of the Income Tax Rules which deals with the requirement for approval of institution or fund under clause (vi) of sub section (5) of 80G is reproduced below partly:- 11AA. (1) An application for ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax issued a notice dt. 26/10/2023 through ITBA calling upon the assessee to specify the date of commencement of activities by the Assessee Trust/society including details / documents as mentioned in the said notice as they wanted to conduct inquiry with regard to actual activities of the Trust by virtue of provisions contained in 80G (5) of the Income Tax Act, second proviso which is reproduced below: Provided further that the Principal Commissioner or Commissioner, on receipt of an application made under the first proviso, shall,- (i) Where the application is made under clause (i) of the said proviso, pass an order in writing granting it approval for a period of five years; (ii) Where the application is made under clause (ii) or clause (iii) [of sub-clause(B) of clause (iv)] of the said proviso,- (a) Call for such documents or information from it or make such inquiries as he thinks necessary in order to satisfy himself about- (A) the genuineness of activities of such institution or fund; and (B) the fulfilment of all the conditions laid down in clauses (i) to (v); (b) after satisfying himself about the genuineness of activities under item (A), and the fulfilment of all the condi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nths of commencement of its activities, whichever is earlier. 13. The Assessee responded on portal on 10/01/2024 to the aforesaid second notice dt. 29/12/2023 which amongst other contentions Interalia stated as under: With reference to your notice U/S 80G (5) (iii) of the Income Tax Act, 1961 regarding INDIAN RED CROSS SOCIETY, SAS NAGAR (PAN: AABT10466K) bearing DIN Notice No. ITBA/EEM/F/EXM43/2023- 24/1059207894(1) dt 29/12/2023, it is respectfully submitted that as Indian Red Cross Society, S.A.S. Nagar has already been granted Provisional approval under 02-Sub clause (vi) of clause (ac) of subsection (1) of section 12A of the Income Tax Act, 1961 as well as 80 G of the Income Tax Act, 1961 under 12- Clause (iv) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961 dated 05/04/2023 respectively. Further Provisional registration is valid from 5th April, 2023 to AY 2025-26. Assessee has also applied for final registration under sec 80G (5) (iii) of the Income Tax Act, 1961 in form 10AB dt 21-09-2023 having acknowledgement no-280156480210923 in response to which your observation has been received dt 29/12/2023 bearing DIN Notice No. ITBA/EEM/F/EXM43/2023-24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Trust/Institutions. For the existing Trust/Institutions, the time limit for applying for Regular Registration is within six months of expiry of Provisional registration if they are applying under sub clause (iii) of the Proviso to Section 80G(5) of the Income Tax Act, 1961. Further, same opinion was upheld in case of Bhamashah Sunderlal Daga Charitable Trust Vs CIT-Exemption (ITAT Jodhpur) dtd 10/11/2023. The copy of the judgement is enclosed for your kind reference. 14. The Ld. CIT (E) in his impugned order dt. 06/03/2024 has held as under: 11.3 In the instant case, the applicant has commenced its activities on 18.04.2006. Thus, application in Form No. 10AB has not been filed by the applicant within the time limit prescribed under Clause (iii) of first proviso to sub-section (5) of section 80G of the Act and also the applicant has not filed its application within the extended time limit provided by CBDT vide its circular No. 12 of 2021 dated 25/06/2021 circular No. 16 of 2021 dated 29/08/2021 and circular No. 8 of 2022 dated 31/03/2022. Be it noted in para 8 CIT (A) has stated Last date of filling was 30th September 2022 it be further noted that the said last date of filing was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ITAT Co-ordinate Bench were tendered in support of his case. Per contra the Ld. DR has placed reliance on impugned order of the Ld. CIT (E) and has prayed that same may please be upheld. Findings Conclusions 19. We have minutely examined Form No. 10A dt. 29/03/2023 which is application for registration or provisional registration or intimation or approval or provisional approval. In the said Form at Serial No. 4b date of incorporation / creation / registration is shown as 6th September 2022. The registration or incorporation number is 7641 of 2022-23 .The Authority granting registration / incorporation is Registrar of Society and prior to 06th September 2022 it was constituted under Indian Red Cross Society Act-XV of 1920. Nature of activities is charitable and type of constitution is society. Object of applicant is relief of the poor medical relief. [Volume II of PB] 20. We have also minutely examined Form No. 10AB dt. 23/09/2023 which is application for registration or approval or final approval of Trust. In the said Form at Serial No. 4b date of incorporation / creation / registration is shown as 06th September 2022. Section code is shown as Clause (iii) of first proviso to S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated that the the said society started operation from 18/04/2006, however society was formally registered on 06/09/2022 . It is therefore very clear that as society under Societies Registration Act [XXI of 1860] and as amended by Punjab Amendment Act, 1957 it became a separate legal entity on 06/09/2022 the Certificate of Incorporation at page 102 of PB-I is proof enough. Be it noted this certificate of incorporation of assessee as Indian Red Cross Society District Branch SAS Nagar, Mohali, Punjab was not disputed by the Ld. DR of Income Tax Department at any stage. We therefore hold that Indian Red Cross Society District Branch SAS Nagar Mohali, Punjab became a distinct legal entity on 06/09/2022 and it is in that capacity they have made respective applications (supra) for various purposes under the provisions of Income Tax Act, 1961. This is basic aspect. It is a foundation issue which needs to be decided at outset threshold and not that since assessee commenced activities on 18/04/2006 and consequently their application under section 80G for registration in Form No. 10AB filed on 23/09/2023 is non maintainable. Be that as it may in second notice of CIT (E) dt. 29/12/2023 the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ust be construed to have meaning within six months from date of provisional registration / approval only and if assessee society apply within six months from date of commencement of activities, the provision of law becomes unworkable to the present set of facts .The CIT (E) in our considered view has erred in law. In present case assessee had already obtained provisional Approval on 05/04/2023 and time begins to run from that date only and not date of commencement of activities which is wholly irrelevant in present set of facts. 25. The Centre heart of core dispute interse between the parties i.e. the Assessee and the department of income tax are the provisions of section 80 G (5)(iii) proviso as aforesaid . We have carefully perused the impugned order of CIT (E) dated 06.03.2024.We observe that CIT (E) in her first notice dated 26.10.2023 has laid emphasis on date of 18.04.2006 as that was the date provided by the assessee in form number 10 AB dated 23.09.2023 as the date for commencement of activities of society .In reply dated 20 /12/2023 it is stated in addition to 18.04.2006, that the assessee was formally registered on 06.09.2022 the date of incorporation of society under loc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legally, it became a new person in the eyes of law w.e.f 06/09/2022. It is only thereafter the assessee on 05/04/2023 applied in Form No. 10AC for order for provisional approval under section 80G(5)(iii) first proviso which Form No. 10AC shows document identification no. AABT10466KF2023101 and application no. 100572070290323 with unique registration no. as AABT10466KF20231 and finally in Form No. 10AC which is for order for provisional registration under section 12A(i)(ac)(vi) they got provisional registration on 05/04/2023 vide document identification no. AABT10466KE2022101 and application no. 100436940290323 with unique registration no. AABT10466KE20221 from A.Y. 2023- 24 to A.Y. 2025-26. It is only thereafter finally the assessee vide Form No. 10AB dt. 23/09/2023 applied for final approval of Trust which is well within time i.e; within six months from 05/04/2023. Hence there is full and complete compliance of Form No. 10AB under section 80G(5)(iii) proviso and it is wrong and incorrect on part of the Ld. CIT(E) to say that it is non maintainable. 27. We also hold that in the facts and circumstances of the case the date of commencement of activity cannot be given any weightage as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be done in such a manner that it becomes workable and not stagnant. 30. In a situation like present case date of provisional approval is of importance and relevant and not the date of commencement of activities and between the two the former would prevail over later. On question of compliance of due date i.e; 30/09/2022 / 30/06/2024 ( CBDT Circular No. 7 of 2024 dt. 25/04/2024)the said date is irrelevant (new regime). Be it noted that it is the substance in the Form which is of importance and not the Form itself. Be that as it may the Form No. 10AB dt. 23/09/2023 was filed on or before 30/09/2023 the due date ( which was extended by Circular No. 6/2023 dt. 24/05/2023 of CBDT) of filing. We also hold that by virtue of provisions contained in Section 80G(5)(iii) second proviso B(I) it is incumbent upon the Ld. CIT(E) if he / she is not satisfied, pass an order in writing (I) in a case referred to in clause (ii) or clause (iii) of the first proviso, rejecting such application and cancelling its approval; or (II) in a case referred to in sub-clause (B) of clause (iv) of the first proviso, rejecting such application, after affording it a reasonable opportunity of being heard (Finance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty on 05/04/2023. The Form No. 10AB as natural corollary for final approval of assessee society was filed on 23/09/2023 well within due date of expiry of six months period from date of provisional approval. 35. The present case does not fall under second part / limb as the assessee society had commenced there activities from 18/04/2006 to 06/09/2022 / 05/04/2023 (80G) under Red Cross Society of India Act, 1920 the umbrella organization as stated and it is only on 06/09/2022 they acquired a new legal status upon incorporation under Societies Registration Act (XXI of 1860) and as amended by Punjab Amendment Act, 1957 and prior thereto they worked under Indian Red Cross Society Act, 1920. Therefore, the date of commencement of activity w.e.f 18/04/2006 is insignificant and is of no consequence. 36. The expression whichever is earlier in above factual backdrop remains unworkable to the scheme of Society / Institution /Fund applying for final approval under section 80G(5)(iii) in the peculiar facts and circumstances of the present case. Order 37. In the foregoing the impugned order of the Ld. CIT(E) dt. 06/03/2024 is set aside and the matter is remanded back to the file the Ld. CIT(E) t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
