Tax appeals allowed due to Covid delay, Trust registration reconsidered under Income Tax Act

The appeals filed by the assessee were initially found to be time-barred, but due to the Covid period and relaxation granted by the Supreme Court, the delay was condoned. The Provisional Registration granted to the public Charitable Trust was challenged as it did not align with the requirements of section 12AB of the Income Tax Act. The Tribunal directed the authority to reconsider the application and grant registration in accordance with the law. The appeals were allowed for statistical purposes, emphasizing the importance of proper application of tax provisions for the trust's registration.

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Issues:
1. Delay in filing appeals by the assessee.
2. Provisional Registration granted instead of Regular Registration under section 12AB of the Income Tax Act, 1961.

Analysis:
1. Delay in filing appeals by the assessee:
The appeals filed by the assessee were found to be time-barred by 326 days. However, considering that the registration was granted during the Covid period and the relaxation granted by the Supreme Court, the delay in filing the appeals was condoned, and they were admitted for adjudication.

2. Provisional Registration granted instead of Regular Registration under section 12AB:
The assessee, a public Charitable Trust, had applied for registration under section 12A(1)(ac)(i) of the Act and u/s.80G of the Act. The impugned order granted provisional registration in Form No.10AC subject to conditions, which the assessee challenged. The Principal Commissioner or Commissioner should pass an order registering the trust for a period of 5 years under section 12AB(1)(a) of the Act when an application is made under section 12A(1)(ac)(i). However, in this case, Provisional Registration was granted, which is usually for new charitable institutions yet to commence activities.

3. Legal Provisions and Analysis:
Section 12A(1)(ac) of the Act sets conditions for trust or institution income to be eligible under section 11 and 12. Section 12AB(1) outlines the procedure for fresh registration, stating that under sub-clause (i), the trust should be registered for a period of five years. In this case, the assessee trust was registered under section 12A, making section 12A(1)(ac)(i) applicable. The Provisional Registration granted was for a period of 5 assessment years, not in line with the Act's provisions.

4. Conclusion:
The Tribunal found that the application under section 12A(1)(ac)(i) was not properly considered for grant of registration under section 12AB. Therefore, the designated authority was directed to reconsider the application and grant registration as per law. The appeals were allowed for statistical purposes.

In conclusion, the Tribunal's decision focused on the correct application of provisions under the Income Tax Act, ensuring that the assessee's trust receives the appropriate registration as per law.

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