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TMI Blog2024 (12) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... o Section 80G(5) of the Act. If we agree with the interpretation of the CIT(E), then say a trust which was formed in the year 2000, performed charitable activities since 2000, but did not apply 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. In this case there is gross non application of mind by the CIT(E), as he has not considered the reply filed by the assessee in response to show cause notice and not followed the binding decision of ITAT Pune in the case of T.B.Lulla Charitable foundation [ 2024 (6) TMI 798 - ITAT PUNE] . Hon ble Supreme Court in the case of Union Of India And Others vs Kamlakshi Finance Corporation [ 1991 (9) TMI 72 - SUPREME COURT] has held that the Collector has to follow the binding precedence of jurisdictional Tribunal. CIT(E) has not discussed whether the Assessee fulfils all other conditions mentioned in the section as he rejected it on technical ground. Therefore, in these facts and circumstances we hold th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be set aside. 7. The Assessee prays for any other relief to be allowed in its case under provisions of law. 8. The assessee craves leave to add, alter, amend, modify, delete all or any of the grounds of appeal. 3) Submission of Ld.AR :Ld.AR submitted that the CIT(E) has erred in rejecting the application of the assessee merely on so called Delay when there is no delay. The Ld.AR submitted that the Trust has commenced activities in 1952. It is a charitable trust. It is registered under Maharashtra Public Trust Act. It is also registered under Section 12AB of the Income Tax Act. Ld.AR submitted a paper book and explained that all the necessary documents were submitted before the CIT(E). The CIT has not bothered to verify the documents filed by the assessee.Ld.AR submitted that Assessee had relied on the Decision of ITAT Pune in the case of T.B.Lulla Charitable Foundation ITA 1220/PUN/2023 before the CIT(E) but the CIT(E) has not bothered to read the decision of ITAT. The decision of ITAT Pune is binding on CIT(E) Pune. The CIT(E) has not discussed the submission made by the assessee in response to the show cause notice. Ld. AR filed copy of e-proceedings response acknowledgement obta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use (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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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); (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), (A) pass an order in writing g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section itself. 5.7.2) We derive the same understanding from the Budget Speech of Hon ble Finance Minister and Memorandum of Finance Bill 2020. 5.8) 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/s 12AA or 80G(5) was asked to re-apply for registration as per the amendment brought in 2020. 5.9) 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 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. 5.10) Finance Bill 2020 (vi) an entity making fresh application for approval under clause (23C) of section 10, for registration under section 12AA, fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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