AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 1816
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....er under clause (iv)(B) of first proviso to section 80G(5) of the Income Tax Act, 1961 under the new provision of Income Tax Act, 1961. 3. The Hon'ble CIT(E) erred in law as well as on facts of the case that genuine hardship if 80G registration in not Granted. 4. Your Appellant reserves the right to add, alter, amend and/or withdraw any of the above grounds of appeal." 2. The background facts leading to present appeal are such that the assessee is a society registered under the M.P. Society Registration Act, 1973 w.e.f. 16.12.1999 and engaged in charitable activity of imparting education by running school approved by M.P. Board & CBSE. The assessee was having approval u/s 10(23C)(vi) of the Act granted by Income-tax Department vide order dated 19.03.2020 w.e.f. 01.04.2015. Subsequently due to change in provisions of law, the assessee has also been granted approval u/s 10(23C)(vi) vide order dated 10.03.2022 for AY 2022-23 to 2026-27. Apart from these approvals u/s 10(23C)(vi), the assessee was also granted provisional approval u/s 80G(5) by Income-tax Department vide order dated 27.12.2023 in Form No. 10AC for AY 2024-25 to 2026-27. Subsequently, vide appli....
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....on 11 or section 12 for any previous year ending on or before the date of such application, at any time after the commencement of such activities." 4. Thereafter, Ld. AR carried us to the impugned order passed by Ld. CIT(E) reading as under: "2. The assessee has applied in Form 10AB for registration under clause-(iv)(B) of first proviso to section 80G(5) of the Act. Clause (iv)(B) of section 80G(5) of the Act is applicable only for those assessee whose activities are commenced and no exemption u/s 11/12 or 10(23C)(iv)/(v)/(vi)(via) has ever been claimed before filing of application in Form 10AB. On perusal of documents submitted by the assessee and data available on record, it is noticed that the assessee has already claimed exemption in its ITR for assessment year 2023-2024 before filling the present application. Hence, the assessee is not found eligible to file application under clause-(iv)(B) of first proviso to section 80G(5) of the Act. 3. Accordingly, a show cause notice was issued on 26.06.2024 to submit the clarification as under:- "You have applied in Form 10AB for registration under clause-(iv)(B) of first proviso to section 80G(5) of the Act....
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.... u/s 80G. Sir, many representations have been made by Tax Associations and other stakeholders before the Ministry of Finance and Central Board of Direct Taxes to suitably amend these harsh provisions so that the institutions genuinely working before the previous year 2023-24 and seeking registration u/s 80G cannot be deprived of the same. Sir, the matter is under consideration by Finance Ministry and CBDT there is high possibility of removal of this hardship in coming days particularly in the budget 2024 due to be presented in the third week of July 2024. Sir, we humbly request you to kindly adjourn the hearing of your show cause notice fixed on 04.07.2024 for at least three weeks and oblige." The request of the assessee was duly accepted but no amendment as discussed in the reply of the assessee has been made by Ministry of Finance. The application has been filed under clause-(iv) (B) of first proviso to section 80G(5) of the Act, the assessee does not fulfill the conditions prescribed as per Income Tax Act, 1961. As per para 3, the application of registration u/s 80G(5) is hereby rejected on technical issue and merits of the case have not been examined." [emphasis sup....
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....t proviso to subsection (5) of section 80G within and subsequently (refer clause 2 in Form 10A) and was given the provisional registration up to AY 2025-26 on 30.11.2022. In the application for final approval in Form 10AB, it noticed that the assessee has once again mentioned same section i.e. sub-clause (B) of clause (iv) of first proviso to sub-section (5) of section 80G whereas the correct section code under which the assessee ought to have sought approval is clause (iii) of first proviso to sub-section (5) of section 80G. We also noticed that the CIT(E) has treated the application as one filed under sub-clause (B) of clause (iv) of first proviso to sub-section (5) of section 80G and accordingly rejected the application for not fulfilling the stipulated conditions prescribed for filing application for approval in Form 10AB. From the perusal of forms filed and the facts of the case, in our considered view, there is merit in claim of the Ld. AR that the assessee has selected the wrong section code inadvertently while filing the application for final registration in Form 10AB. Further, we notice that the assessee did not have the opportunity of being heard before CIT(E) due to inco....
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....eriod 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, shall,-- (i) where the application is made under clause (i) of the said proviso, pass an order in writing granting it approval for a period of five years; (ii) where the application is made under clause (ii) or clause (iii) of the said proviso,-- (a) call for such documents or information from it or make such inquiries as he thinks necessary in order to satisfy himself about-- (A) the genuineness 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 ap....
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.... 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 adjudicated upon by the Coordinate Bench of the Tribunal in the case of "Vivekananda Mission Asram vs. CIT" in ITA No. 995/Kol/2023 decided on 08.12.2023 (Judicial Member herein being the author of the said order) while deliberating upon the provisions of section 80G(5) of the Act, has held as under: "6. So far as the observation of the ld. CIT(E) that the assessee had already commenced its activities since long and that as per Clause (iii) of 1st Proviso to section 80G(5) of the Act, the application for final registration was to be filed within six months from the commencement of its activities and therefore, the application of the assessee for final registration was time-barred, is concerned, we note that the issue has already been discussed and adjudica....
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....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 (iii) to First Proviso to section 80G(5) of the Act. 5.3 In our humble understanding, if the view of the ld. CIT(Exemption) is accepted to be correct, then no institution which has already been into charitable activities before seeking provisional approval under Clause (iv) to First Proviso to section 80G(5) of the Act would ever be entitled to grant of final registration under Clause (iii) to First Proviso to section 80G(5) of the Act even after grant of provisional approval, which would make the relevant provisions of section 80G(5) otiose and defeat the object and purpose of these statutory provisions. 6. In view of the above discussion, it is held that after grant of provisional approval, the application cannot be rejected on the grou....
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.... 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 assessee is otherwise found eligible. It is directed that the ld. CIT(Exemption) will decide the application of the assessee for final approval as expeditiously as possible but not later than two months from the receipt of this order. It is further directed that, if the assessee is granted final approval by the ld. CIT(Exemption) then, the benefit of approval u/s 80G of the Act, if it was available to the assessee prior to the Amendment brought vide Amending Act of 2020, will be deemed to have been 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., 28/06/2022, due to technical errors occurred in making the app....