TMI Blog2024 (4) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... Charitable Activities but had never applied for registration u/s.80G(5) of the Act. It is not mandatory that every charitable trust/institution has to apply for registration u/s.80G(5) - there is no bar in the Act that such trust or institutions cannot apply for registration u/s.80G 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 Act, since they have obtained Provisional registration. As per KP VARGHESE case [ 1981 (9) TMI 1 - SUPREME COURT] statutory provision shall be interpreted in such a way to avoid absurdity. In this case to avoid the absurdity as discussed, we are of the opinion that the words, within six months of commencement of its activities has to be interpreted that it applies for those trusts/institutions which have not started charitable activities at the time of obtaining Provisional registration, and not for those trust/institutions which have a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d merely on the above technical ground, then it would permanently disentitle the appellant from obtaining approval u/s 80G(5) even though it is genuinely engaged in carrying out charitable objects since February 2020 which could never have been the intention of the case. 5. The appellant craves leave to add/alter/amend any of the grounds of appeal. Submission of ld.AR: 2. The ld.Authorised Representative(ld.AR) of the assessee filed a paper book. The ld.AR explained that assessee had applied for registration within the time limit. However, ld.CIT(E) has rejected the application treating it as not within the time. ld.AR relied on the order of ITAT Pune Bench case of Kailash Math Trust Vs. CIT(Exemption) in ITA No.1177/PUN/2023 dated 05.01.2024. 2.1 The ld.Departmental Representative(ld.DR) for the Revenue relied on the order of ld.CIT(Exemption). Findings Analysis : 3. We have heard both the parties and perused the records. It is observed that ld.CIT(E) has rejected the application of the assessee stating that assessee has not filed application within the statutory time limit. The relevant part of para 9 of the ld.CIT(E) s order is reproduced here as under : 9. From the above, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rposes of such business; and (c) the institution or fund issues to a person making the donation a certificate to the effect that it maintains separate books of 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries 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 subclause (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) . 5. The Commissioner of Income Tax (Exemption), Pune in the case of the Assessee held that the Activities of the Assessee had commenced in 26.10.1999, hence the assessee was liable to make application for Approval u/s 80G of the Act to file the present application within six months from the date of provisional approval i.e. on or before 31.03.2022, whereas the present application fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clause in section 2(15) of the Act, was relied upon by the Court for the purpose of ascertaining what was the reason for introducing that clause. 7.2 The Hon ble Supreme Court has approved use of the Hon ble Minister s speech as tool of interpretation to understand the intent of the Statute. Extract of relevant part of Speech of Hon ble Finance Minister: 8. The Hon ble Finance Minister in Budget Speech 2020 has said as under : Quote In order to simplify the compliance for the new and existing charity institutions, I propose to make the process of registration completely electronic under which a unique registration 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 case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce it is again reproduced here under : 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 10.2 The sub-clause says that the Institution which have provisional registration have to apply at-least six months prior to expiry of the provisional registration or within Six months of commencement of activities, whichever is earlier. 10.3 In continuation of this when we read the sub clause iii of Proviso of section 80G(5), 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here A sells his property to B with a stipulation that after sometime, which may be a couple of years or more, he shall resell the property to A for the same price. Could it be contended in such a case that when B transfers the property to A for the same price at which he originally purchased it, he should be liable to pay tax on the basis as if he has received the market value of the property as on the date of resale, if, in the mean-while, the market price has shot up and exceeds the agreed price by more than 15 per cent. Many other similar situations can be contemplated where it would be absurd and unreasonable to apply section 52(2) according to its strict literal construction. We must, therefore, eschew literalness in the interpretation of section 52(2) and try to arrive at an interpretation which avoids this absurdity and mischief and makes the provision rational and sensible, unless of course, our hands are tied and we cannot find any escape from the tyranny of the literal interpretation. It is now a well-settled rule of construction that where the plain literal interpretation of a statutory provision produces a manifestly absurd and unjust result which could never have been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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