TaxTMI 
TaxTMI 
TaxTMI 
2024 (3) TMI 1201
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.... the appeals. For the purpose of adjudication, we take the facts from ITA No.1136/CHNY/2023. 3. The only issue in this appeal of assessee is against the order of CIT(Exemption) rejecting Form No.10AB dated 17.03.2023 filed for seeking approval under clause (iii) of first proviso to section 80G(5) of the Income Tax Act, 1961 (hereinafter the 'Act') treating the same as belated. For this, assessee has raised multiple grounds numbering 13 in all and all are factual or argumentative and hence, need not be reproduced. 4. Brief facts are that the assessee is old trust continuing to exist since 14.07.2017, as per the date of incorporation/registration. The assessee trust exists much before the commencement of new regime of registration and approval. The assessee trust namely Shri Ramajayam Charitable Trust with PAN Number AAUTS0393L filed an application dated 17.03.2023 in Form 10AB under Rule 11AA of the Income Tax Rules, 1962 (hereinafter the 'Rules'), seeking approval under clause (iii) of first proviso to sub-section (5) of section 80G of the Act. The CIT(Exemption) noted that the assessee had been granted provisional approval in Form No.10AC on 23.09.2021 u/s. 80G(5)(iv) of the Act....
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.....09.2022 was extended up-to 30.09.2022 but thereafter, there was no further extension for delay in filing Form No.10AB by CBDT and the same is evident from CBDT Circular No.22/2022 dated 01.11.2022 through which the CBDT extended the time limit for filing of application in Form No.10A under various sections made therein up to 25.11.2022. But in the said Circular No.22/2022, no further extension of time was granted for filing of Form No.10AB. Hence, he noted that since the said circular did not mention any such extension of due date for filing of Form No.10AB to get approval u/s. 80G of the Act, the application filed by the assessee trust on 17.03.2023 was to be treated as time barred and invalid one, as the same was not filed within the due date. Hence, the CIT(Exemption), considering the decision of Co-ordinate Bench of Kolkata Tribunal in the case of Bishnupur Public Education Institute in ITA Nos.585 to 587/Kol/2020, order dated 20.04.2022 (reported in 139 taxman.com 121), rejected the assessee's application filed on 17.03.2023 in Form No.10AB u/s. 80G(5)(iii) of the Act as not-maintainable. Aggrieved, assessee is in appeal before the Tribunal. 5. Before us, the ld. counsel for....
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....clause (iii) to first proviso to section 80G of the Act should be reckoned as directory and not mandatory. The transitional nature of the amendments/new regime has been brought in and hence, Ld. AR pleaded for remanding the issue to the file of CIT(Exemptions) for adjudication of approval u/s. 80G of the Act on merits by dispensing with the technicalities namely the filing of stated Form No.10AB within the prescribed time limit. 5.2 The third proposition put forward by Ld. AR is that with respect to charitable entities formed prior to 01.04.2021, the timelines prescribed relating to the commencement of activities in clause (iii) to proviso to Section 80G of the Act may not be applied since the commencement of the activities had happened prior to introduction of new regime and he further pleaded for treating the compliance of the timeline of six months prior to the expiry of provisional registration, which expires on 30.09.2023 and complied with by the assessee as full compliance by holding the proceedings initiated by the assessee as maintainable for grant of final recognition/approval u/s. 80G(5) of the Act. 5.3 Alternative and fourth proposition set out by ld. counsel is that t....
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.... for all the impugned cases is 30.09.2023. 6.1 The Ld. CIT-DR classified assessee trusts into two categories as under:- a. New Trust cases which are applying for 12A and 80G of the Act as a new case in new regime b. Old Trust cases which are already having 12A of the Act registration in old regime but applying for 80G of the Act as new case in new regime 6.2 As per Ld. CIT-DR, for the old trust cases, Form 10AB u/s 80G(5)(iii) of the Act must have been filed within the time limit extended by CBDT which was 30.09.2022. Having not filed within CBDT extended due date, the belated filing of Form 10AB was rightly rejected by CIT(E). He submitted that the CIT(E) does not have powers to condone the aforesaid delay as per the Act. The assessee trusts have contravened the provisions of law by not following the timeline specified therein and not filing the relevant Form 10AB within the specified due dates. Hence, its submitted that even if these trust cases are sent back to CIT(E), CIT(E) has no power to condone delay thereon. In this context, the revenue placed reliance on decisions quoted by CIT(E), the case of the Hon'ble Jurisdictional Madras High court in the case of All Angels Ed....
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....e ld. CIT-DR relied on the decision in the case of Bhamashah Sundarlal Daga v The Commissioner of Income Tax - Exemption, Jaipur in ITA No.278/JODH/2023, the Hon'ble Tribunal had held that the condition prescribed in clause (iii) of the proviso to section 80G(5) of the Act is applicable for all new trust cases. The relevant portion in Para 10.3 is reproduced below: "It is clear that the intention of Parliament in putting the word "or within six months of commencement of its activities, whichever is earlier" is in the context of the newly formed Trust/ Institutions. For the existing Trust/ Institution, the time limit for applying for regular registration is within six months of expiry of provisional registration if they are applying under sub clause (iii) of proviso to section 80G(5) of the Act. This will be harmonious interpretation." He argued that it would be pertinent to note that the assessee trusts have also relied on the case of Bhamashah Sundarlal Daga (supra) in their favour. However, in the said case, the Tribunal has clearly held that clause (iii) to proviso to section 80G(5) of the Act would apply to new trust cases, as reproduced above. Thus, it was argued that all t....
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....of applying for availing benefits by the trusts. Thus, keeping in mind this intention of the parliament, the bench is requested to interpret the relevant provisions, which are not charging sections, very strictly. In this regard, the revenue relied on the ratio laid down by the five-member constitutional bench of the Hon'ble Supreme Court in the case of Commissioner of Customs (Import), Mumbai v M/S. Dilip Kumar and Company &Ors,[2018] 9 SCCC 1 (FB)(SC), 2018 (5) ABR 802. In this decision, the Hon'ble SC has held that even when there is an ambiguity, an exemption provision/notification should be interpreted strictly and that the burden of proving applicability would be on the taxpayer to show that its case comes within the parameters of the exemption notification and it was further held that when there is ambiguity in the exemption notification, which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the taxpayer and it must be interpreted in favour of the revenue. In light of the above decision, it was argued that if at all there is any ambiguity in interpreting the proviso to section 80G, it must be interpreted in favor of the revenue as the ....
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.... AY 2024- 2025 and there is no loss to these trusts up to AY 2024-2025. Therefore, Ld CIT DR stated that in such cases where conditions mentioned in the Act are not complied by the assessee trusts, they may not be granted further benefit or exemption under the Act. It was further stated that for all the new trust cases filed u/s 12A(1)(ac)(vi) and 80G(5)(iv) of the Act, both due dates D1 and D2 are applicable (D1 being the earliest to be taken into consideration) and hence the approvals sought u/s. 80G belatedly have rightly been denied. In respect of the old trust cases, filing u/s 12A(1)(ac)(i) and 80G(5)(iv) of the Act, the revenue relies on the CIT(E) grounds for rejection. 7. We have heard rival contentions and gone through the facts and circumstances of the case. First of all, it is to be noted that the assessee trust has commenced its activities on 14.07.2017 and assessee is also provisionally approval u/s. 80G(5)(iv) of the Act. The assessee trust was required to file application in Form No.10AB u/s. 80G(5)(iii) of the Act within the time period of six months prior to expiry of the period of provisional approval or within six months of commencement of its activities, which....
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.... proviso to subsection (5) of section 80G of the Act. The amended provisions provide for the following: (a) All the existing trusts were required to apply for registration/approval on or before 30.06.2021. However, on consideration of difficulties in the electronic filing of Form No. 10A, the Central Board of Direct Taxes (the Board) in exercise of the powers conferred upon it under Section 119 of the Act extended the due date for filing Form No. 10A in such cases to 31.08.2021 vide Circular No.12 of 2021 dated 25 .06.2021, to 3 1.03.2022 vide Circular No. 16 of 2021 dated 29.08.2021 and further till 25.11.22 vide Circular No. 22 of 2022 dated 01.11.2022. Such registration/approval shall be valid for a period of 5 years. Thus, existing trusts are required to apply for fresh registration/approval and once the registration/approval is granted it is valid for five years. (b) New trusts are required to apply for provisional registration/approval at least one month prior to the commencement of the previous year relevant to the assessment year from which the said registration/approval is sought. Such provisional registration/approval is valid for a maximum period of three years. (c....
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.... of 2022 dated 01.11.2022. Further, as stated in 1 (c) above, the due date for furnishing application for registration/approval by the provisionally registered/ approved trusts was extended till 30.09.2022. These trusts shall be subject to tax under section 115TD of the Act in accordance with the provisions of the said section, as amended by the Finance Act, 2023 if the application is not made by 25.11.2022 or 30.09.2022, as the case may be. 5. In order to mitigate genuine hardship in such cases, the Board, in the exercise of the power under section 119 of the Act, extends the due date of making an application in,- (i) Form No.10A, in case of an application under clause (i) of the first proviso to clause (23C) of section 10 or under sub-clause (i) of clause (ac) of sub-section (1) of section 12A or under clause (i) of the first proviso to sub-section (5) of section 80G of the Act, till 30.09.2023 where the due date for making such application has expired prior to such date; (ii) Form No. 10AB, in case of an application under clause (iii) of the first proviso to clause (23C) of section 10 or under sub-clause (iii) of clause (ac) of sub-section (I) of section 12A of the Act, ti....
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.... within the extended period up to 30.09.2023, as mentioned in paragraph 5(i). 7.2 The legislature by way of amendment introduced new regime for taxation of trusts w.e.f. 01.04.2021 and this amendment was made with the objective that it needs improvement with the advent of technology and keeping in mind the practical issue of difficulty in obtaining registration/approval/notification before actually starting the activities. To make the process of registration completely electronic under a 16 digit Unique Registration Number (URN), the new regime was introduced for new as well as to existing charitable institutions. Due to change in law, a new clause (ac) has been inserted in sub-section (1) of section 12A w.e.f. 01.04.2021 which states that notwithstanding anything contained in clauses (a) to (ab), the person in receipt of the income who wants to claim benefit of section 11 & 12 is to made an application in the prescribed form 10A or 10AB and in prescribed manner to the Principal Commissioner or Commissioner, for registration of the trust or institution. 7.3 Similarly, for approval u/s. 80G of the Act, similar changes were effected in the provisions of section 80G(5), the first an....
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....use (iv) of the said provision vide dated 23.09.2021. Even the final registration was granted u/s. 12A of the Act in Form No.10AD under the new regime vide dated 13.09.2023 but rejected the application for final approval applied u/s. 80G of the Act in Form No.10AB vide order dated 25.09.2023 by CIT(Exemption) on the reason that the application was filed by assessee only on 17.03.2023, which is belated application. There is no dispute about the final registration granted to the assessee trust u/s. 12A of the Act in Form No.10AD under the new regime vide order dated 13.09.2023 but rejected assessee's application filed in Form No.10AB u/s. 80G of the Act dated 17.03.2023 vide order dated 25.09.2023 as the application is a belated one. 7.5 We have considered the case laws of Co-ordinate Bench of Jaipur Tribunal in the case of Go Gram Eco Foundation, supra and noted that the Jaipur Bench has considered this issue of delay in application filed in Form No.10AB in term of clause (iii) of first proviso to section 80G(5) of the Act, wherein the provisional registration was granted to the assessee trust on 16.10.2021 in Form No.10A u/s. 12A(1)(ac)(vi) and under clause (iv) of first proviso t....
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....Pradesh in the case of Aurora Educational Society vs. CCIT reported in 20 taxmann.com 46, after considering these decisions has decided the issue on the approval of application filed u/s. 10(23C)(vi) of the Act rejected by CIT(Exemption) relating to assessment years 2016-17, 2017-18 & 2018-19. The assessee's application was dated 11.02.2019 under the old regime. The new regime of taxation of charitable trusts / institutions started w.e.f. 01.04.2021 and hence, reliance placed by Revenue on the Co-ordinate Bench decision of Kolkata Tribunal in the case of Bishnupur Public Education Institute, supra is not at all relevant and even the case law of Hon'ble High Court of Madras and the Hon'ble High Court of Andhra Pradesh are also relating to taxation of old regime prior to 01.04.2021. Hence, these are clearly distinguishable on facts and hence, not applicable. In term of the above, we now go through the factual aspect. 7.8 After hearing the arguments of ld. counsel for the assessee and ld. CIT-DR as noted above, we find from the facts that the timeline prescribed for filing Form No.10AB for registration u/s. 12A of the Act in the case of assessee trust has been extended up-to 30.09.20....
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....prescribed for filing Form No.10AB for recognition u/s. 12A of the Act has been extended up to 30.09.2023, the same may be treated as extended for forms namely Form No.10AB for renewal of approval/recognition/registration under clause (iii) of first proviso to section 80G of the Act also. Hence, we accept the plea of assessee and agree with the arguments of ld. counsel for the assessee and remand the matter back to the file of the CIT(Exemption) to decide the issue on merits. Hence, the order of CIT(Exemption) on this issue is set aside and matter is remanded back to the file of the CIT(Exemption) for re-deciding the issue on merits as per law. The appeal of the assessee is allowed for statistical purposes. 8. Now coming to the case of CIT-1982 Charitable Trust vs. ITO in ITANo.827/CHNY/2023, the trust was incorporated on 24.03.2021 and assessee filed application for obtaining provisional registration u/s. 12A of the Act in Form No.10A on 29.04.2021. The CIT(Exemption) granted provisional registration u/s. 80G(5) of the Act in Form no.10A on 28.05.2021. The assessee moved final registration application u/s. 12A of the Act in Form No.10AB on 29.09.2022 and final registration was gr....