AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 563
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....t, 1961. Therefore the present appeal under section 253 of the Income Tax Act, 1961 before us against the said rejection order dt. 06/03/2024 which is hereinafter referred to as "impugned order". Factual Matrix 3. The Red Cross Society is globally recognized body for its laudable objectives and the work done by them both during the time of peace & war are remarkable. 4. The Assessee herein is an Indian Chapter Called Indian Red Cross Society its District Branch is situated at SAS Nagar, Mohali in the State of Punjab-160055, India. 5. Section 80G of the Income Tax Act, 1961 as amended from time to time deals with Deduction in respect of donations to certain funds, charitable institutions, etc. 6. Section 80G, Sub Section (5), first proviso which stipulates approval of a Charitable Trust or Institution is partly reproduced below: Provided that the institution or fund referred to in clause (VI) shall make an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for grant of approval,- (1) Where the institution or fund is approved under clause (VI) [as it stood immediately before its amendment by the Taxation and Other Laws (Relaxation a....
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....copy of registration under Foreign Contribution (Regula- tion) Act, 2010 (42 of 2010), if the applicant is registered under such Act; (e) Self-certified copy of existing order granting registration under clause (vi) of sub-section (5) of section 80G; (f) Self-certified copy of order of rejection of application for grant of approval under clause (VI) of sub-section (5) of section 80G, if any; (g) where the applicant has been in existence during any year or years prior to the financial year in which the application for registration is made, self-certified copies of the annual accounts of the applicant relating to such prior year or years (not being more than three years immediately preceding the year in which the said application is made) for which such accounts have been made up; (h) Note on the activities of the applicant." 10. We observe that after the application for final approval of Trust as above dated 23/09/2023, the Department of Income Tax issued a notice dt. 26/10/2023 through ITBA calling upon the assessee to specify the date of commencement of activities by the Assessee Trust/society including details / documents as mentioned in the said notice as they wanted to....
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....y too have not filed the application under clause (iii) of the first proviso to sub section (5) of Section 80G of the Act in Form No. 10AB within the due date mentioned under clause (iii) of first proviso to sub section (5) of Section 80G of the Act and therefore the assessee was requested to explain as to why their present application filed under clause (iii) of first proviso to sub section (5) of section 80G of the Act in Form No. 10 AB should not to be treated as not filed within the due date specified in the act and why the same should not be rejected as Non Maintainable. It was also observed therein that assessee has commenced its activities 18/04/2006. Whereas by virtue of clause (iii) of first proviso to Section 80G (5) you ought to have filed within due date. Clause (iii) of Section 80G (5) is specifically reproduced below: "Where the institution or fund has been provisionally approved, at least six months prior to expiry of the period of the provisional approval or within six months of commencement of its activities, whichever is earlier." 13. The Assessee responded on portal on 10/01/2024 to the aforesaid second notice dt. 29/12/2023 which amongst other contentions In....
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....ory that every charitable trust/institution has to apply for registration u/s 80G (5) of the Income Tax Act, 1961. However, there is no bar in the Act that such trust or institutions cannot apply for registration u/s 80G of the Income Tax Act, 1961 in the new procedure. In these kinds of cases, the Trust/Institute though doing charitable activity may apply first for the 'Provisional Registration 'under the Act. After getting the Provisional Registration the Trust/Institution have to apply for Regular Registration. These kind of Trust/Institutes will fall under sub clause (iii) of the Proviso to Section 80G (5) of the Income Tax Act 1961, since they have obtained Provisional registration. When we read the sub clause (iii) of Proviso' of section 80G(5) of the Income Tax Act, 1961, which we have already reproduced above, 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/Institutions, the time limit for applying for Regular Registration is within six months of expiry of Provisional registration if ....
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....aring before the Tribunal took place on 16/04/2024 when both the parties appeared before us and were heard at length on merits of their respective cases. The paper book in two set Vol. I & II which were on record on files of the Tribunal were minutely perused by us and so also other papers and proceedings of the case including that of Ld. CIT (E). 18. During the course of the hearing the Ld. Counsel for the Assessee Shri Tej Mohan Singh repeated and reiterated the brief facts of the case and the grounds of appeal on the basis of material available on the record including the paper book. He vehemently contended that impugned order of Ld. CIT (E) dt. 06/03/2024 rejecting the approval sought under section 80G (5) (iii) by holding it to be not maintainable is totally arbitrary and unjustified. The findings of Ld. CIT (E) that the Trust commenced its activities on 18/04/2006 is erroneous and therefore the application under section 80G (5) Clause (iii) the first proviso is beyond time limit, which is arbitrary and unjustified. Compilation of few orders of ITAT Co-ordinate Bench were tendered in support of his case. Per contra the Ld. DR has placed reliance on impugned order of the Ld. ....
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....of PB-I]. The assessment year or year and for which the trust or institution is provisionally registered is from AY 2023-24 to AY 2025-26[ i.e.; till 31/03/2025]. Under Serial No. 10 of the said Form No. 10AC at J [condition for registration] it is stated as under: "j. The trust or institution shall apply for registration within 6 months of commencement of the activities or at least 6 months prior to the expiry of period of provisional registration, whichever is earlier." 23. We now examine the legality, validity and proprietary of the impugned in light of forgoing. We are of the considered view that the assessee is Indian Red Cross Society, Dist: SAS Nagar, Mohali, Punjab which till it was incorporated on 06th September 2022 as society under Societies Registration Act- [XXI of 1860] and as amended by Punjab Amendment Act- 1957 was working under Indian Red Cross Society Act-XV of 1920 as per Serial No. 4 d of Form No. 10AB dt. 23/09/2023. Further even in reply letter dt. 20/12/2023 in response to first notice dt. 26/10/2023 of CIT (E) the assessee at para 3 had expressly stated that the "the said society started operation from 18/04/2006, however society was formally registered....
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.... last date is extended till 30/06/2024. There is second category of trust/institutions which were already doing charitable activities but never applied for registration u/s 80G (5) of the Income Tax Act, 1961. It is not a case that every charitable Trust / Institution has to apply for registration under section 80G (5) of the Income Tax Act, 1961. However simultaneously there is no bar in the Act, that such Trust or institution cannot apply for registration under section 80G of the Act, 1961 in the new procedure. In these kind of cases, the Trust/Institute though doing charitable activity may apply first for provisional registration / approval under the Act, after getting the provisional registration / approval the Trust/Institution have to apply for regular registration / final approval. These kind of Trust / Institutes will fall under sub clause (iii) of the proviso to section 80G (5) of the Income Tax Act, 1961, since they have obtained provisional registration / approval. 24. The word whichever is earlier in the present fact of the case which are very peculiar vis a vis law must be construed to have meaning within six months from date of provisional registration / approval onl....
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....5/04/2023 and in fact even prior thereto. It was existing society which was provisionally approved as society under section 80G(5)(iii) and consequently the application for the final approval as society vide Form No. 10AB dt. 23/09/2023 which according to us is well within the time limit prescribed under section 80G(5)(iii) and therefore the Form No. 10AB came to be filed on 23/09/2023 which is well within time / due date i.e; within six months prior to the expiry of the period of provisional approval. The Ld. CIT(E) by taking into consideration that since activities of the society commenced since 18/04/2006, has not understood its significance / importance correctly i.e; the assessee was initially working under Red Cross Society Act, 1920 till it was formally incorporated as Society under the Societies Laws of Punjab on 06/09/2022. It is only after the certificate of incorporation as society the assessee got the new legal status as society under local laws of Punjab i.e; Societies Registration Act (XXI of 1860) and as amended by Punjab Amendment Act, 1957. It thus got a new status legally, it became a new person in the eyes of law w.e.f 06/09/2022. It is only thereafter the assess....
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....al approval on 05/04/2023 itself. As a natural corollary and legally so also, they had to apply for final approval by filing Form No. 10AB which they filed it on 23/09/2023 i.e; within six months from 05/04/2023 which Form is within time limit of six months as contemplated under section 80G(5)(iii) with last deadline of 05/10/2023. 29. The expectation of the department is farfetched that Form No. 10AB ought to have been filed before due date i.e; 30/09/2022 (new regime) which date is now 30/06/2024 as aforesaid but when provisional approval itself is dated 05/04/2023 question of due date being 30/09/2022 (new regime) or 30/06/2024 (supra)just does not arises. Be that as it may the Form No. 10AB in the present case was filed before 30/09/2023 (Circular No. 6/2023 dt. 24/05/2023 of CBDT) hence before due date. The tussle between within six months from date of provisional approval or within six months from date of commencement of activities whichever is earlier in our respectful view is too trivial an issue particularly so when it is well settled law that construction of fiscal statute is to be done in such a manner that it becomes workable and not stagnant. 30. In a situation like ....
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....ix months of provisional registration and before due date of 30/09/2023 ( Circular No. 6/2023 dt. 24/05/2023 of CBDT) the due date of filing. 33. We are also of the considered view that Section 80G(5)(iii) proviso covers (i) Institution or fund that has been provisionally approved - six months prior to expiry of period of provisional approval or (ii) Within six months of the commencement of its activities, Whichever is earlier 34. In the present case since the assessee society had obtained provisional approval w.e.f 05/04/2023 and therefore, it was incumbent upon them to have filed Form No. 10AB on or before 05/10/2023 which in fact they have filed on 23/09/2023 much before the expiry of six months on 05/10/2023. The assessee society case is therefore covered by first part / limb of Section 80G(5)(iii) proviso as second part/limb deals with the commencement of the activities which is not applicable herein at all in the facts and circumstances of the present case as the case is first of the provisional approval after incorporation of society on 06/09/2022 which was obtained by the assessee society on 05/04/2023. The Form No. 10AB as natural corollary for final approval of asse....