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TMI Blog2024 (6) TMI 924X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act, such trust were directed to re-apply for registration under new procedure on or before 30th August, 2020 but due to Covid- 19 this date was subsequently extended. There is Second category of trust/institutions which were already doing Charitable Activities but had never applied for registration u/s.80G(5) of the Act It is not mandatory that every charitable trust/institution has to apply for registration u/s.80G(5) of the Act. However, there is no bar in the Act that such trust or institutions cannot apply for registration u/s80G in the new procedure. In these kinds of cases, the Trust/Institute though doing charitable activity may apply first for the Provisional Registration under the Act. After getting the Provisional Registration the Trust/Institution have to apply for Regular registration. These kind of Trust/Institutes will fall under sub clause (iii) of the Proviso to Section 80G(5) of the Act, since they have obtained Provisional registration. In this case to avoid the absurdity as discussed by us in earlier paragraph, we are of the opinion that the words, within six months of commencement of its activities has to be interpreted that it applies for those trusts/insti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled fresh registration under section 12AB and also applied for provisional approval under Section 80G(5) of the Act. The provisional approval under section 80G(5) was granted to assessee on 16/12/2022. Accordingly, the assessee applied for final/regular approval under Section 80G of the Act on 02/02/2023 in Form-10AB. Alongwith application, the assessee filed certain details as per requirement of Form-10AB. The ld. CIT(E) on going through such details, issued show cause notice dated 31/03/2013 asking the assessee to furnish details of activities and the corroborative evidence. The assessee in response to such show cause notice, filed its reply. Contents of reply is recorded in para 8 of order of ld. CIT(E). In the reply, the assessee stated that the assessee-trust initially allowed registration under Section 12A in 1977. The assessee is working in the field of medical aid, education and relief to the poor. The assessee also furnished three years audit reports to substantiate their activities. The assessee further submitted that they were provisionally approved for approval under section 80G which is valid up to A.Y. 2025-26. On the specific query about clause (iii) of 3rd proviso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee obtained provisional certificate under Section 80G(5) of the Act for the first time which was allowed. The assessee immediately applied for final approval on 02/02/2023, however, the same was rejected by taking a view that the application is not filed within the time limit and the extended period as per CBDT Circular No. 6/23 dated 24/05/2023. The ld. AR of the assessee submits that on similar issue, Jodhpur Bench of Tribunal in Bhamashah Sundarlal Daga Charitable Trust Vs CIT(E) in ITA No. 278/Jodh/2023 dated 10/11/2023 on considering similar contention and appreciating similar hardship about language employed in clause (iii) of 3rd proviso to Section 80G(5), held that within six months of commencement of its activities has to be interpreted that it applies for those trusts/institutions which have not started charitable activities at the time of obtaining provisional registration. Such finding of the Tribunal was based on the speech of Hon'ble Finance Minister in the Memorandum of Finance Bill. The ld. AR of the assessee submits that the case is squarely covered and the matter may be restored to the file of ld. CIT(E) to consider the case of assessee in view of decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Legislature on the floor of the House when a Bill for enacting a statutory provision is being debated are inadmissible for the purpose of interpreting the statutory provision but the speech made by the mover of the Bill explaining the reason for the introduction of the Bill can certainly be referred to for the purpose of ascertaining the mischief sought to be remedied by the legislation and the object and purpose for which the legislation is enacted. This is an accord with the recent trend in juristic thought not only in western countries but also in India that interpretation of a statute being an exercise in the ascertainment of meaning, everything which is logically relevant should be admissible. In fact there are at least three decisions of this Court, one in Sole Trustee, Loka Shikshana Trust v. CIT [1975] 101 ITR 234, the other in Indian Chamber of Commerce v. CIT [1975] 101 ITR 796 and the third in Addl. CIT v. Surat Art Silk Cloth Manufacturers Association [1980] 121 ITR l/[1980] 2 Taxman 501, where the speech made by the Finance Minister, while introducing the exclusionary clause in section 2(15) of the Act, was relied upon by the Court for the purpose of ascertaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such trust were directed to re-apply for registration under new procedure on or before 30th August, 2020 but due to Covid- 19 this date was subsequently extended. There is Second category of trust/institutions which were already doing Charitable Activities but had never applied for registration u/s.80G(5) of the Act. It is not mandatory that every charitable trust/institution has to apply for registration u/s.80G(5) of the Act. However, there is no bar in the Act that such trust or institutions cannot apply for registration u/s80G in the new procedure. In these kinds of cases, the Trust/Institute though doing charitable activity may apply first for the Provisional Registration under the Act. After getting the Provisional Registration the Trust/Institution have to apply for Regular registration. These kind of Trust/Institutes will fall under sub clause (iii) of the Proviso to Section 80G(5) of the Act, since they have obtained Provisional registration. 10.1 In this background, we need to read the sub-clause (iii) of the Proviso to Section 80G(5) of the Act. For ready reference it is again reproduced here under : iii) where the institution or fund has been provisionally approved, at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in an economy of rising prices and in fact we would find in a large number of cases where the sale is completed more than a year or two after the date of the agreement that the market price prevailing on the date of the sale is very much more than the price at which the property is sold under the agreement. Can it be contended with any degree of fairness and justice that in such cases, where there is clearly no understatement of consideration in respect of the transfer and the transaction is perfectly honest and bona fide and, in fact, in fulfilment of a contractual obligation, the asses-see who has sold the property should be liable to pay tax on capital gains which have not accrued or arisen to him. It would indeed be most harsh and inequitable to tax the assessee on income which has neither arisen to him nor is received by him, merely because he has carried out the contractual obligation undertaken by him. It is difficult to conceive of any rational reason why the Legislature should have thought it fit to impose liability to tax on an assessee who is bound by law to carry out his contractual obligation to sell the property at the agreed price and honestly carries out such cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case, we hold that the Assessee Trust had applied for registration within the time allowed under the Act. Hence, the application of the assessee is valid and maintainable. 12. Even otherwise, the Provisional Approval is uptoA.Y.2025-26, and it can be cancelled by the ld.CIT(E) only on the specific violations by the assessee. However, in this case the ld.CIT(E) has not mentioned about any violation by the Assessee. Therefore, even on this ground the rejection is not sustainable. 13. However, the ld.CIT(E) has not discussed whether the Assessee fulfils all other conditions mentioned in the section as he rejected it on technical ground. Therefore, in these facts and circumstances we hold that the Assessee had made the application in form 10AB within the prescribed time limit and hence it is valid application. Therefore, we direct the ld.CIT(E) to treat the application as filed within statutory time and verify assessee s eligibility as per the Act. The ld.CIT(E) shall grant opportunity to the assessee. Assessee shall be at liberty to file all the necessary documents before the ld.CIT(E). 14. Accordingly, the appeal of the assessee is allowed for statistical purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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