TaxTMI 
TaxTMI 
2025 (5) TMI 695
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....me Tax Act, 1961. 2) That the Rejection of approval of exemption under sub-clause (B) of clause (iv) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961: The Ld. Commissioner of Income Tax (Exemptions), Kolkata erred in law and fact having not to grant the benefit of permanent exemption under section 80G(5)(ii) or (iii) or (iv) of the Income Tax Act, 1961 of the Institution, after verifying all necessary steps for granting approval exemption, the Ld. Commissioner of Income Tax (Exemptions), Kolkata merely quoted in the rejection order that the application have a non-applicable as "Section 80G(5) (iv) (B) of the Act is for newly established trusts or institutions that are not yet registered under section 12A of 12AB of the Act. As assessee trust is an old and established trust already registered under section 12A and claiming exemptions u/s. 11 of the Act". Therefore, your Appellant prays before the Hon'ble Members of the Appellate Tribunal for direction to approval of exemption under clause (ii) or (iii) of second proviso to sub-section (5) of Section 80G of the Income Tax Act, 1961against decision made by the Ld. of Commiss....
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....on-maintainable and the same was rejected. Against this rejection, the assessee filed an appeal before the Tribunal which was decided vide order dated 10.07.2024 in which the following directions were given to the Ld. CIT (Exemption): "4. We have perused the order of ld. CIT (Exemption) and find that the application of the assessee has only been rejected thereby saying that the assessee has not received any approval u/s 12A(1)(ac)(iii) of the Act in Form No. 10AB. It is not in dispute that the assessee is a registered society. For the same assessee, the order of ITAT, Kolkata in ITA No. 919/KOL/2023 (supra) has also been brought to our notice. In the said application ITAT, Kolkata has passed an order and directed the ld. CIT (Exemption) to reconsider the application of the assessee for permanent registration file u/s 12AB of the Act in accordance with the law. The fact is similar; hence, we are of this opinion that ld. CIT (Exemption) to reconsider the application of the assessee for registration in accordance with law after affording necessary opportunity of being heard to the assessee. Accordingly, the grounds raised by the assessee are allowed in terms of the above. ....
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....ing exemptions u/s. 11 of the Act, the provision of the section 80G(5)(iv)(B) are not applicable. In light of the above, the application filed by the assessee under section 80G(5)(iv)(B) is hereby rejected as it has been incorrectly filed under the wrong provision of the Act." 4. Aggrieved with the order of the Ld. CIT(Exemption), the assessee has filed the appeal before the Tribunal. 5. Rival submissions were heard and the record/paper book filed and the submissions made have been examined. Before us, in the course of appeal the assessee filed written statement and contended that the order of the Ld. CIT (Exemption) is not justified and requested for issuing certain directions for the following reasons: "The Appellant prays for ends your justices for the decision of the Ld. Commissioner of Income Tax (Exemptions) have not justified in respect of application as the rejection under Sub-clause (B) of clause (iv) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961 as the Ld. Commissioner of Income Tax (Exemptions) has not any specific grounds / evidentiary document or any specified violation regarding as follows: a. the activ....
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....ommissioner or Commissioner;] 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,- (i) where the institution or fund is approved under clause (vi) (as it stood immediately before its amendment by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020), within three months from the 1st day of April, 2021; (ii) where the institution or fund is approved and the period of such approval is due to expire, at least six months prior to expiry of the said period; (iii) 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; (iv) in any other case, at least one month prior to commencement of the previous year relevant to the assessment year from which the said approval is sought: Provided further that the Principal Commissioner or Commissioner, on receipt of an application made under the first proviso, shal....
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....ns which did not stand approved on the date of Amendment i.e. 01.04.2021 brought by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, they could apply under Clause (iv) of the First Proviso to section 80G(5) of the Act. In that case, the ld. CIT(Exemption) is supposed to make necessary enquiries and if found satisfied regarding the genuineness of the activities of such an institution, would grant provisional approval for five years. Such institutes who have been granted provisional approval under clause (iv) to First Proviso to section 80G(5) of the Act, have to apply for final approval under Clause (iii) of First Proviso to section 80G(5). Such institutions are required to apply for final approval at least six months prior to expiry of the period of provisional approval or within six months of commencement of its activities, whichever is earlier. In the case in hand, provisional approval has also been granted to the assessee-institution from 28.06.2022 to A.Y 2025-26, therefore, the assessee-trust was entitled to apply for final approval and there was no bar to the institution for making such application. This issue has already been adjudicate....
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....egistration within six months of the commencement of its activities or within the six months prior to the expiry of the period of provisional approval, whichever is earlier. In any case, the assessee is eligible to apply for final registration only after the grant of provisional approval. Therefore, we hold that there is no delay on the part of the assessee in filing application in the prescribed form for grant of final registration under Clause (iii) of 1st Proviso to section 80G(5) of the Act. In view of the above observations, the matter is restored the file of the CIT(E) for decision afresh in the light of the observations made above." 5. It is to be further noted here that the ld. CIT(Exemption) firstly misconstrued about the CBDT Circulars regarding the exemption of date for final applications for approval. The said Circular/time limits are applicable only for the institutions who stood already registered on the date of Amendment and have made application for renewal of the registration without any time break. However, the said last date which has been extended to 30.09.23 by CBDT Circular No.6 of 2023 is not applicable for making application under Clause (i....
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....imilar facts and circumstances has made the following further observations: "4.1. It is further directed that, if the assessee is granted final approval by the ld. CIT(E) then, the benefit of approval u/s 80G of the Act, available to the assessee prior to the Amendment brought vide Amending Act of 2020, will be deemed to be continued without any break. The assessee will not be deprived of the benefit during the time period falling between 31/03/2021 and the date of grant of provisional approval under clause (iv) i.e., 28/05/2021, due to technical errors occurred in making the application under the relevant provisions of the Act because of the confusion and misunderstanding on part of the assessee as well as on part of the ld. CIT(E) in properly interpreting the relevant provisions." 6. The facts and issues involved in the case in hand being identical to that of the above referred to cases and in view of the findings given by the Coordinate Benches of the Tribunal, the appeal of the assessee is allowed accordingly and the ld. CIT(Exemption) is directed to grant final approval to the assessee under Clause (iii) to First Proviso to section 80G(5) of the Act, if the a....