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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 ..... a case 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. X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(Exemption) are culled out as under: "Further, CBDT considered the matter 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 incorr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b) the donations made to the institution or fund are not used by it, directly or indirectly, for the purposes of such business; and (c) the institution or fund issues to 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree months from the date on which this proviso has come into force; (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; (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) th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rizing of the registrations/approvals of both the existing as well as the new trusts and institutions u/s. 10(23C) or 12A or Section 80G (5) of the Act upto 30.09.2022. Thereafter, the CBDT to mitigate hardships had in the exercise of its powers u/s.119 of the Act had further 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sonable? F. The Discussion and Findings : 6. At the outset, we agree with the learned Additional Solicitor General of India that the petitioner trusts do not have any vested right to claim an extension of time. When the statute prescribes a time limit, the petitioner trusts are expected to apply within the said date to 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he earlier Circular No.8 of 2022 and before or at the time the impugned Circular No.6 of 2023 is mentioned or placed on record. The impugned circular by itself also does not contain any reason whatsoever for making the classification. 6.5. The counter-affidavit filed also actually does not contain any reason whatsoever. Except for reiterating that the petitioner 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. Use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st proviso to sub-section (5) of section 80G of the Act as within time and consider the same and pass orders thereon on merits, in accordance with law with in six months from the date of receipt of a copy of this order; (iii) There shall be no order as to costs. Consequently, W.M.P.Nos.26465, 26492, 26470, 26479, 26481, 26482, 26491, 26467, 26490 of 2023; 3517 and 3518 of 2024 are closed." 9. As 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 fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3C) of section 10 or under 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, 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 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 Ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 80G of the Act till 30.06.2024. At the same time, it is provided in the aforesaid Circular No.7/2024 that where any trust, institution or fund had already made an application in Form 10AB and where the Principal Commissioner or Commissioner has passed an order rejecting such application, on or before the issuance of the said circular, solely on account of the fact that the application was furnished after the "due date", then it may furnish fresh application in Form 10AB within the extended time period, i.e. till 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(Exemptio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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