TaxTMI 
TaxTMI 
TaxTMI 
2024 (10) TMI 301
X X X X Extracts X X X X
X X X X Extracts X X X X
....pproval under section 80G and holding the application maintainable being within time. 2. The Assessee Trust craves its rights to add, amend or alter any of the grounds on or before the hearing." Submission of ld.AR for the Assessee : 2. Ms.Ruchika Sogani, Advocate-ld.AR of the assessee submitted that assessee is a Section 8 Company and it was incorporated on 17.02.2020. Assessee applied for provisional approval u/sec.80G and received provisional approval u/sec.80G on 01.12.2022. Assessee had applied for permanent registration u/sec.80G on 30.09.2023. The ld.AR explained that ld.CIT(E) has rejected the assessee's application only on one ground that assessee's application was filed beyond the time allotted u/sec.80G(5) of the Act, hence, the ld.CIT(E) held that assessee's application was not maintainable. The ld.AR relied on the order of the Hon'ble Madras High Court in the case of Sri Nrisimha Priya Charitable Trust Vs. CBDT [2024] 161 taxmann.com 209(Madras) dated 02.04.2024. The ld.AR also relied on the ITAT Jodhpur's order in Bhamashah Sundarlal Daga Charitable Trust vs. CIT(E) in ITA No.278/JODH/2023 dated 10.11.2023. She explained that the ld.CIT(E) has erred in treating th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 constituted does not, or the rules governing the institution or fund do not, contain any provision for the transfer or application at any time of the whole or any part of the income or assets of the institution or fund for any purpose other than a charitable purpose; (iii) the institution or fund is not expressed to be for the benefit of any particular religious community or caste; (iv) the institution or fund maintains regular accounts of its receipts and expenditure; (v) the institution or fund is either constituted as a public charitable trust or is registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India or under section 2571 of the Companies Act, 1956 (1 of 1956), or is a University established by law, or is any other educational institution recognised by the Government or by a University established by law, or affiliated to any University established by law, or is an institution ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ss 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 granting it approval for a period of five years; or [(B) if he is not so satisfied, pass an order in writing,-- (I) in a case referred to in clause (ii) or clause (iii) of the first proviso, rejecting such application and cancelling its approval; or (II) in a case referred to in sub-clause (B) of clause (iv) of the first proviso, rejecting such application, after affording it a reasonable opportunity of being heard;] (iii) ....... New Procedure for registration: 6. The new provision for Registration was introduced by Finance Act, 2020. There was amendment in the registration procedure by Finance Act, 2020. For the first time the Finance Act, 2020 introduced the concept of "Provisional Approval". Also due to the amended, all the existing Trust/Institutions which were already having registration u/s.12AA or 80G(5) were asked to re-apply for registration as per t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ration 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. Finance Bill 2020 : "(vi) an entity making fresh application for approval under clause (23C) of section 10, for registration under section 12AA, for approval under section 80G shall be provisionally approved or registered for three years on the basis of application without detailed enquiry even in the cases where activities of the entity are yet to begin and then it has to apply again for approval or registration which, if granted, shall be valid from the date of such provisional registration. The application of registration subsequent to provisional registration should be at least six months prior to expiry of provisional registration or with in six months of start of activities, which ever is earlier" 9. Thus, these amendments were introduced to simply the procedure of registration of Charitable Trusts/Institutions. The amendment made to simplify a procedure cannot be interpreted in a way that it ca....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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/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 the Proviso to Section 80G(5) of the Act. This will be the harmonious interpretation. 11. In this context, we will like to refer to observations of the Hon'ble Supreme Court in the case of K P Varghase(supra), where in the Hon'ble Supreme Court observed as under : Quote, "It is a well-recognised rule of construction that a statutory provision must be so construed, if possible, that absurdity and mischief may be avoided. There are many situations where the construction suggested on behalf of the revenue would lead to a wholly unreasonable result which could never have been intended by the Legislature. Take, for example, a case where A agrees to sell his property to B for a certain price and before the sale is completed pursuant to the agreement and it....