Bar Association established in 1924 wins appeal for section 80G(5)(iii) registration after incorrect denial

ITAT Kolkata allowed the appeal of a Bar Association established in 1924 that was denied regular registration under section 80G(5)(iii). The CIT(Exemption) had incorrectly granted provisional registration then denied regular registration, claiming the application was time-barred as it was filed beyond six months of commencing activities. ITAT held the application was within time limits per Board circulars, the assessee's charitable activities remained unchanged since its previous registration under the old regime, and the CIT(Exemption)'s procedure was incorrect. The tribunal directed grant of registration under section 80G(5)(iii).

---

---

Issues Involved:
1. Rejection of application for grant of registration u/s 80G(5)(iii).
2. Interpretation of time limits for filing applications under the amended provisions.
3. Validity of provisional registration and subsequent denial of regular registration.

Summary:

1. Rejection of Application for Grant of Registration u/s 80G(5)(iii):
The assessee, a registered society, appealed against the order of the Commissioner of Income Tax (Exemption), Kolkata, which rejected their application for registration u/s 80G(5)(iii) of the Income Tax Act. The society had been enjoying registration u/s 12A and exemption u/s 80G(5)(vi) since 2019. However, due to amendments effective from 1st April 2021, the assessee filed an application in Form No. 10AB for regular registration u/s 80G(5)(iii), which was rejected by the CIT(Exemption) on the grounds that the application was not filed within the stipulated time frame.

2. Interpretation of Time Limits for Filing Applications Under the Amended Provisions:
The CIT(Exemption) held that the application should have been moved at least six months prior to the expiry of the provisional approval or within six months of the commencement of its activities, whichever is earlier. The assessee argued that the application was filed within the due date and that the CIT(Exemption) failed to comprehend the true procedure required to be followed. The Tribunal noted that the CBDT had extended the time limits for filing applications in Form No. 10A/10AB multiple times, and the latest extension was up to the end of June 2024.

3. Validity of Provisional Registration and Subsequent Denial of Regular Registration:
The Tribunal observed that the assessee had been granted provisional registration, but the CIT(Exemption) should have granted regular registration at the first instance. The Tribunal found that the CIT(Exemption) misconstrued the provisions and facts, as the activities of the society were charitable and unchanged. The Tribunal directed the CIT(Exemption) to grant registration to the assessee u/s 80G(5)(iii), considering the past history and complete material available.

Conclusion:
The Tribunal allowed the appeal of the assessee, directing the CIT(Exemption) to grant registration u/s 80G(5)(iii) and issue the necessary certificate in due course. The order was pronounced in the open Court on 11/06/2024.

---