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TMI Blog2024 (9) TMI 424X X X X Extracts X X X X X X X X Extracts X X X X ..... said requirement as not applicable. Scope of Circular no. 07/2024 dated 25/04/2024 - It has been provided in the said circular that where the Principal Commissioner or Commissioner has passed an order rejecting such application, on or before the issuance of the 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 afresh application in Form No. 10AB within the extended time provided in paragraph 3(H) i.e. 30/06/2024. In the instant case, we find that the application of the assessee has been rejected vide order dated 19/03/2024 before the issuance of the aforesaid circular dated 25/04/2024 and though the time limits prescribed therein have expired, going by intent and spirit of the circular so issued by the CBDT and submissions so made by the ld AR and ld CIT/DR, the assessee application deserve to be examined on merits and cannot be dismissed as barred by limitation. we remit the matter to the file of the CIT(E) to admit the application of the assessee as filed within the stipulated period and examine the same on merits - Appeal of the assessee is allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Social Welfare vs CIT(Exempton) (ITA No. 1341/Kol/2023 dated 11/03/2024). 6. In his submissions, the ld CIT/DR submitted that the Central Board Direct Taxes (Circular no. 07/2024, dated 25-Apr-2024) has issued a circular whereby an extended time limit has now been granted to all charitable trusts and societies to file fresh application in Form 10AB and relevant paragraph 4.1 of the said circular reads as under: 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 afresh application in Form No. 10AB within the extended time provided in paragraph 3(H) i.e. 30.06.2024. 7. The ld CIT/DR fairly submitted that since the time limit for filing fresh application as so stated in the CBDT circular has expired and to avoid any further technicalities/complexity, it would be in fitment of things that since the Bench is ceased of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall make an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for grant of approval, (i) 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; (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; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. In that case, the ld. CIT(Exemption) is supposed to make necessary enquiries and if found satisfied regarding the genuineness of the activities of such an institution would grant provisional approval for five years. In both the cases i.e. institutions which have been granted approval under Clause (i) or the institutions which have been granted approval under Clause (iv) to First Proviso to section 80G(5) of the Act have to apply for final registration under Clause (iii) of First Proviso to section 80G(5). Such institutions are required to apply for final registration at least six months prior to expiry of the period of provisional approval or within six months of commencement of its activities, whichever is earlier. In the case in hand, it appears that the assessee-institution instead of applying for renewal of registration under Clause (i) to First Proviso to section 80G(5) of the Act has applied for fresh provisional registration under Clause (iv) to First Proviso to section 80G(5) of the Act and incidentally, the said fresh provisional registration has also been granted to the assessee-institution from 10.03.2023 to A.Y 2025-26. If the assessee-institution would have a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee might have commenced its activities prior to grant of provisional registration but that does not mean that the assessee in that event will be precluded from applying for final registration even after the grant of provisional registration. The assessee as per statutory provision could not have directly applied for final registration without grant of provisional registration. The aforesaid proviso, therefore, is to be read as that after the grant of provisional registration, if the assessee has not commenced its activities, he may apply for registration within six months of the commencement of its activities or within the six months prior to the expiry of the period of provisional approval, whichever is earlier. In any case, the assessee is eligible to apply for final registration only after the grant of provisional approval. Therefore, we hold that there is no delay on the part of the assessee in filing application in the prescribed form for grant of final registration under Clause (iii) of 1st Proviso to section 80G(5) of the Act. In view of the above observations, the matter is restored the file of the CIT(E) for decision afresh in the light of the observations made above. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e seeking provisional approval under Clause (iv) to First Proviso to section 80G(5) of the Act would ever be entitled to grant of final registration under Clause (iii) to First Proviso to section 80G(5) of the Act even after grant of provisional approval, which would make the relevant provisions of section 80G(5) otiose and defeat the object and purpose of these statutory provisions. 6. In view of the above discussion, it is held that after grant of provisional approval, the application cannot be rejected on the ground that the institution had already commenced its activities even prior to grant of provisional registration. Under such circumstances, the date of commencement of activity will be counted when an activity is undertaken after the grant of provisional registration either under Clause (i) or Clause (iv) to First Proviso to section 80G(5) of the Act. 7. In the case in hand, the assessee admittedly has applied for final registration after grant of provisional registration under Clause (iv) to First Proviso to section 80G(5) of the Act and therefore, the application filed by the assessee is within limitation period. The issue is otherwise squarely covered by the decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d an order rejecting such application, on or before the issuance of the 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 afresh application in Form No. 10AB within the extended time provided in paragraph 3(H) i.e. 30/06/2024. In the instant case, we find that the application of the assessee has been rejected vide order dated 19/03/2024 before the issuance of the aforesaid circular dated 25/04/2024 and though the time limits prescribed therein have expired, going by intent and spirit of the circular so issued by the CBDT and submissions so made by the ld AR and ld CIT/DR, the assessee application deserve to be examined on merits and cannot be dismissed as barred by limitation. 10. In light of the same, we remit the matter to the file of the ld CIT(E) to admit the application of the assessee as filed within the stipulated period and examine the same on merits as per law as expeditiously as possible preferably within two months of receipt of this order after providing reasonable opportunity to the assessee. 11. In the result, the appeal of the assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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