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TMI Blog2024 (6) TMI 1219X X X X Extracts X X X X X X X X Extracts X X X X ..... s will be the harmonious interpretation. As decided by K P Varghase [ 1981 (9) TMI 1 - SUPREME COURT] the statutory provision shall be interpreted in such a way to avoid absurdity. 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/institutions which have not started charitable activities at the time of obtaining Provisional registration, and not for those trust/institutions which have already started charitable activities before obtaining Provisional Registration. We derive the strength from the Speech of the Hon ble Finance Minister and the Memorandum of Finance Bill. 2020. Therefore, 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. Even otherwise, assessee had received provisional approval under section 80G(5) on 27.05.2021 and it was valid upto A.Y. 2023-24. The assessee had applied for registration under section 80G on 24.05.2023, which was before A.Y. 2023-24. Thus, assessee had applied for pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The object of the trust is to encourage Marathi Literature and to encourage Literature of other languages. It has been carrying out conferences, lectures, discussions, competitions to fulfill the purpose of encouraging literature. It is running a library. One can avail the library facility by paying the fees. It is observed that assessee had received 80G Certificate on 04.09.2013 from CIT-II, Nashik. The assessee had also received registration under section 12AA of the Act on 04.09.2013 from CIT-II, Nashik. As per the written submission of the assessee, the assessee was found as a Public Charitable Trust on 01.07.1877. Since then, it is running District Public Library which was subsequently named as Central Library. The building in which it is situated in, is now a heritage building. The library has more than 1.5 lakh books and it has more than 1700 members. The library facility is available at a fee of Rs. 330/- per year. The trust arranges free public meetings for lectures delivered by renowned writers, poets and thinkers. The library was awarded prestigious Dr.Baba Saheb Ambedkar Award in 1992. 4. The question before us is whether the application of the assessee was time barre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... community or caste; (iv) the institution or fund maintains regular accounts of its receipts and expenditure; (v) the institution or fund is either constituted as a public charitable trust or is registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India or under section 2571 of the Companies Act, 1956 (1 of 1956), or is a University established by law, or is any other educational institution recognised by the Government or by a University established by law, or affiliated to any University established by law, or is an institution financed wholly or in part by the Government or a local authority; (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; (emphasis supplied) (vii)………… (viii) ………. (ix)………….. 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,-- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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;] (iii) ……. 5. The Commissioner of Income Tax (Exemption), Pune in the case of the Assessee held that the Activities of the Assessee had commenced on 01.07.1877, hence the assessee was liable to make application for Approval u/s 80G of the Act to file the present application within six months from the date of provisional approval (Date of Provisional Approval 27.05.2021), whereas the present application filed by the assessee on 24.05.2023 i.e.beyond the time limit allowed under clause (iii) of first proviso to section 80G(5) of the Income Tax Act, 1961, the ld.CIT(E) held it to be time barred. New Procedure for registration: 6. The new provision for Registration was introduced by Finance Act, 2020. There was amendment in the registration procedure by Finance Act, 2020. For the first time the Finance Act, 2020 introduced the concept of "Provisional Approval". Also due to the amended, all the existing Trust/Institutions which were already having r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the process of registration completely electronic under which a unique registration number (URN) shall be issued to all new and existing charity institutions. Further, to facilitate the registration of the new charity institution which is yet to start their charitable activities, I propose to allow them provisional registration for three years. " Unquote. Finance Bill 2020 : "(vi) an entity making fresh application for approval under clause (23C) of section 10, for registration under section 12AA, for approval under section 80G shall be provisionally approved or registered for three years on the basis of application without detailed enquiry even in the cases where activities of the entity are yet to begin and then it has to apply again for approval or registration which, if granted, shall be valid from the date of such provisional registration. The application of registration subsequent to provisional registration should be at least six months prior to expiry of provisional registration or within six months of start of activities, whichever is earlier" 9. Thus, these amendments were introduced to simply the procedure of registration of Charitable Trusts/Institutions. The am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uation of this when we read the 'sub clause iii of Proviso' of section 80G(5), which we have already reproduced above, it is clear that the intention of parliament in putting the word "or within six months of commencement of its activities, whichever is earlier" is in the context of the newly formed Trust/institutions. For the existing Trust/Institution, 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 Act. This will be the harmonious interpretation. 11 In this context, we will like to refer to observations of the Hon'ble Supreme Court in the case of K P Varghase (supra), where in the Hon'ble Supreme Court observed as under : Quote, "It is a well-recognised rule of construction that a statutory provision must be so construed, if possible, that absurdity and mischief may be avoided. There are many situations where the construction suggested on behalf of the revenue would lead to a wholly unreasonable result which could never have been intended by the Legislature. Take, for example, a case where A agrees to sell his property to B for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more than 15 per cent. Many other similar situations can be contemplated where it would be absurd and unreasonable to apply section 52(2) according to its strict literal construction. We must, therefore, eschew literalness in the interpretation of section 52(2) and try to arrive at an interpretation which avoids this absurdity and mischief and makes the provision rational and sensible, unless of course, our hands are tied and we cannot find any escape from the tyranny of the literal interpretation. It is now a well-settled rule of construction that where the plain literal interpretation of a statutory provision produces a manifestly absurd and unjust result which could never have been intended by the Legislature, the Court may modify the language used by the Legislature or even 'do some violence" to it, so as to achieve the obvious intention of the Legislature and produce a rational construction -" Unquote. 11.1 Thus, as observed by the Hon'ble Supreme Court, that the statutory provision shall be interpreted in such a way to avoid absurdity. In this case to avoid the absurdity as discussed by us in earlier paragraph, we are of the opinion that the words, "within six month ..... X X X X Extracts X X X X X X X X Extracts X X X X
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