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TMI Blog2024 (9) TMI 343X X X X Extracts X X X X X X X X Extracts X X X X ..... e where its application for registration under clause (iii) of the 1st proviso to sub section (5) of Section 80G of the Act had already been rejected by the Pr. CIT, inter alia, for the reason that the same was filed beyond the due date , to file a fresh application within the extended time period, i.e. till 30.06.2024, therefore, the assessee society in the present case before us remains at a liberty to approach the CIT(Exemption), Bhopal in the aforementioned manner, i.e. by filing a fresh application in Form 10AB, which the latter as per the aforesaid CBDT Circular No.7/2024 (supra) shall treat as a valid application - Assessee appeal allowed. - SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER For the Assessee : S/shri Maneesh Upneja Baldev Raj, CAs For the Revenue : Shri S.L Anuragi, CIT-DR ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee-society is directed against the order passed by the Commissioner of Income (Exemption), Bhopal dated 15.02.2024 declining the assessee's applications for registration/approval u/s.80G (5) of the Income-tax Act, 1961 (in short the Act ). The assessee society has assailed the impugned order on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of delay through CBDT Circular No.06/2023 dated 24.05.2023, vide which the CBDT has extended the date of filing in such cases as per Para 5(ii) and gave relaxation only for the applications filed under section 12A(1)(ac) (iii) and clause (iii) of first proviso to 10(23C) of the Act. No such relaxation has been granted to the applications which have been filed under clause (iii) of first proviso to Section 80G (5) of the Act. 3. The CIT(Exemption), Bhopal vide his Show Cause Notice (SCN) dated 12.01.2024 called upon the assessee society to explain its eligibility for registration in the backdrop of the aforesaid position of law read a/w. the aforesaid CBDT Circulars. Although it was the claim of the assessee society that as it was approved under clause (i) of the 1st proviso to Section 80G (5) of the Act and was required to apply under clause (i) of the 1st proviso to Section 80G(5) of the Act, but the CIT(Exemption), Bhopal did not find faovur with its said claim. The CIT(Exemption), Bhopal observed that the aforesaid claim of the assessee society was incorrect for the reason that clause (i) of the 1st proviso to Section 80G (5) of the Act was applicable only for those assessees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a person making the donation a certificate to the effect that it maintains separate books of account in respect of such business and that the donations received by it will not be used, directly or indirectly, for the purposes of such business; (ii) the instrument under which the institution or fund is constituted does not, or the rules governing the institution or fund do not, contain any provision for the transfer or application at any time of the whole or any part of the income or assets of the institution or fund for any purpose other than a charitable purpose; (iii) the institution or fund is not expressed to be for the benefit of any particular religious 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 25 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 establishe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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; (iv) in any other case, at least one month prior to commencement of the previous year relevant to the assessment year from which the said approval is sought: 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 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); and (b) after satisfying himself about the genuineness of activities under item (A), and the fulfilment of all the conditions under item (B), of sub-clause (a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther extended the time limit for filing applications upto 30.09.2023, but the said relaxation was only in respect of registrations u/s. 10(23C) or 12A and not for approvals under clause (iii) of the 1st proviso to Section 80G(5) of the Act. Accordingly, there was no extension of time for regularizing approvals u/s. 80G (5) of the Act for institutions or funds which were previously provisionally approved u/s. 80G of the Act. For the sake of clarity, the relevant part of the CBDT Circular No. 06/2023 is culled out as under: 5. In order to mitigate genuine hardship in such cases, the Board, in the exercise of the power under section 11 9 of the Act, extends the due date of making an application in,- (i) Form No.10A, in case 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 (I) of section 12A or under clause (i) of the first proviso to sub-sect on (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 su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avail the benefits. The first respondent Board issues circulars enlarging the time limit even beyond the prescribed limit to mitigate the rigours of the statute and the hardship faced by the assessees. The same is in exercise of its powers under Section 119(2)(b) of the Act. 6.1. No discrimination or differentiation was made between the existing trusts and the new trusts at the first instance when Circular No.8 of 2022 was issued. When the impugned Circular No.6 of 2023 was issued, the reason stated by the first respondent was to mitigate genuine hardship. Paragraph No.5 was already extracted above. It is also essential to extract paragraph No.4 of the impugned Circular which reads as follows:- 4. Representations have been received stating that several trusts have not been able to apply for registration/ approval within the required time due to genuine hardship. This has also led to rejection of applications simply on the ground that these were delayed. As mentioned in para 1(a) above, the last date for filing an application by the existing trusts seeking registration/ approval was extended to 25.11.2022 vide Circular No. 22 of 2022 dated 01.11.2022. Further, as stated in 1(c) abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er trusts do not have any vested right, there is no other ground that is put forth by the first respondent. Even though the new trusts as well as the existing trusts have no right to demand for extension of time as a matter of right, when the respondents have thought it fit to extend the time, considering the hardship, there is no material which is placed before this Court nor any reasoning is contained in the impugned order that the new trusts did not face the hardship in respect of filing of the application under Section 80G5 of the Act alone. Therefore, leaving out the clause in respect of Section 80G5 of the Act alone that too only in respect of the new trusts does not in any manner relate to the object sought to be achieved by the impugned circular nor does it provide any basis for the discrimination/classification. Useful reference as to the restatement of the law in this regard can be made to the Judgment of the Hon ble Supreme Court of India in State of Tamilnadu Anr. Vs. National South Indian River Interlinking Agriculturist Association 2, more particularly to paragraph Nos.15 15.2 which reads thus: 15. The equality code in Article 14 of the Indian Constitution prescribes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed by us hereinabove, Para 5, clause (ii) of the CBDT circular No.06/2023 dated 24.05.2023 had been held by the Hon'ble High Court of Madras in the case of Sri Nrisimha Priya Charitable Trust Vs. Central Board of Direct Taxes (supra) as illegitimate, arbitrary and ultra vires of the Constitution of India. Accordingly, the Hon'ble High Court had directed the department- respondent to consider the application that was filed in Form 10AB by the petitioner-trust that was provisionally approved u/s. 80G (5) and required approval as per Section 80G(5)(iii) of the Act. 10. The Ld. Authorized Representative (for short 'AR') for the assessee society submitted that the CBDT considering the difficulties reported by the taxpayers and other stakeholders in electronic filing of Form No.10A/10AB had in exercise of its power u/s. 119 of the Income Tax Act, 1961 come up with a Circular No.07/2023 dated 24.05.2023 which, inter alia, extended the due date of making an application and intimation electronically in Form 10AB under clause (iii) of the 1st proviso to sub-section (5) of Section 80G of the Act till 30.06.2024. For the sake of clarity, the CBDT Circular No.7/2024 dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Circular, and where the Principal Commissioner or Commissioner has not passed an order before the issuance of this Circular, the pending application in Form No. 10AB may be treated as a valid application. 4.1 Further, in cases where any trust, institution or fund has already made an application in Form No. 10AB, and where the Principal Commissioner or Commissioner has passed an order rejecting such application, on or before the issuance of this Circular, solely on account of the fact that the application was furnished after the due date or that the application has been furnished under the wrong section code, it may furnish a fresh application in Form No. 10AB within the extended time provided in paragraph 3(ii) i.e. 30.06.2024. 5. It is also clarified that if any existing trust, institution or fund who had failed to file Form No. 10A for AY 2022-23 within the due date as extended by the CBDT circular no. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30.06.2024. 13. We have thoughtfully considered the facts involved in the present case and find that the CIT(Exemption), Bhopal had vide his order dated 15.02.2024, i.e prior to the date of issuance of the CBDT Circular No 7/2024 dated 25.04.2024 already declined assessee's application for registration under clause (iii) of the 1st proviso to sub section (5) of Section 80G of the Act. We, thus, in terms of our aforesaid observation are of the view that considering the judgment of the Hon'ble High Court of Madras in the case of Sri Nrisimha Priya Charitable Trust Vs. Central Board of Direct Taxes (supra), the observation of the CIT(Exemption), Bhopal, based on which, the application filed by the assessee society for registration u/s. 80G(5) of the Act had been rejected, cannot be approved. At the same time, concession has been provided by the aforesaid CBDT Circular No.7/2024 dated 25.04.2024, as per which liberty had been provided to any trust, institution or fund where the Principal Commissioner or Commissioner had already passed an order rejecting the application filed by the assessee society in Form 10AB to furnish fresh application in Form 10AB within the extended time ..... X X X X Extracts X X X X X X X X Extracts X X X X
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