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TMI Blog2024 (10) TMI 1173X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(E), then say a trust which was formed in the year 1986, performed charitable activities since 1986, but did not applied for registration u/s 80G, the said trust will never be able to apply for registration now. This in our opinion is not the intention of the legislation. Even otherwise, the Provisional Approval is upto AY 2024-25, and it can be cancelled by the CIT(E) only on the specific violations by the assessee. Therefore, we hold that the Assessee had made the application in form 10AB within the prescribed time limit and hence it is valid application. CIT(E) has not discussed whether the Assessee fulfils all other conditions mentioned in the section as he rejected it on technical ground. Therefore, we direct the CIT(E) to treat the application as filed within statutory time and verify assessee s eligibility as per the Act. The CIT(E) shall grant opportunity to the assessee. Appeal of the assessee is allowed for statistical purpose. - Shri Satbeer Singh Godara, Judicial Member And Dr. Dipak P. Ripote, Accountant Member For the Assessee : Adv. Deepa Khare - AR For the Revenue : Shri Amol Khairnar, Commissioner of Income Tax- DR ORDER PER DR.DIPAK RIPOTE, HON BLE ACCOUNTANT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the following, namely : (a) any sums paid by the assessee in the previous year as donations to .. Or (iv) any other fund or any institution to which this section applies; or (v) the Government or any local authority, to be utilised for any charitable purpose other than the purpose of promoting family planning; or (vi) .. (via) . (vii) . (b) .. (c) (d) . (4) . (5) This section applies to donations to any institution or fund referred to in sub-clause (iv) of clause (a) of sub-section (2), only if it is established in India for a charitable purpose and if it fulfils the following conditions, namely : (i) where the institution or fund derives any income, such income would not be liable to inclusion in its total income under the provisions of sections 11 and 12 or clause (23AA) or clause (23C) of section 10 : Provided that where an institution or fund derives any income, being profits and gains of business, the condition that such income would not be liable to inclusion in its total income under the provisions of section 11 shall not apply in relation to such income, if (a) the institution or fund maintains separate books of account in respect of such business; (b) the donations made t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the period of the provisional approval or within six months of commencement of its activities, whichever is earlier; (emphasis supplied) 72 [(iv) in any other case, where activities of the institution or fund have (A) not commenced, at least one month prior to the commencement of the previous year relevant to the assessment year from which the said approval is sought; (B) commenced and where no income or part thereof of the said institution or fund has been excluded from the total income on account of applicability of sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10 or section 11 or section 12 for any previous year ending on or before the date of such application, at any time after the commencement of such activities:] 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) [or sub-clause (B) of clause (iv)] of the said proviso, (a) call ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessee had received valid Provisional Approval and it was valid till AY 2024-25. Therefore, in this case when we read the sub clause (iii) of the Proviso, we have to understand that within six months of commencement of activities is applicable only for those newly formed trusts which have received the provisional approval without commencement of activities. If we interpret it in this way then the sub clause (iii) will be harmoniously interpreted otherwise it will defeat the purpose of the Section itself. 4.8) We derive the same understanding from the Budget Speech of the Hon ble Finance Minister and Memorandum of Finance Bill 2020. It was in the Finance Bill 2020 the concept of Provisional Registration was introduced. It was in Finance Bill the validity of the registration granted was restricted to five years. As, a result all the existing Trust/Institutions which were already having registration u/s12AA or 80G(5) was asked to re-apply for registration as per the amendment brought in 2020. Hon ble Finance Minister in Budget Speech 2020 has said as under : Quote In order to simplify the compliance for the new and existing charity institutions, I propose to make the process of r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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