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TMI Blog2024 (1) TMI 848X X X X Extracts X X X X X X X X Extracts X X X X ..... istration u/s 80G of ITA, 1961. 4. The appellant craves leave to add, alter, clarify, explain, modify, delete any of the grounds of appeal, and to seek any just and fair relief." 1.1 We have heard both the parties & perused the records. Findings and analysis: 2. In this case, the ld.Commissioner of Income Tax(Exemption) has rejected the application of the assessee dated 27/03/2023 filed in Form 10AB for approval u/s 80G of the Act, only on one ground that the application has been filed beyond the specified time and hence held it as time barred. The Commissioner of income Tax(Exemption) held as under : "5. It is seen that the date of provisional approval under section 80G(5)(vi) of the Act in this case is 19/08/2022. As per the provisions of clause (iii) of first proviso to section 80G(5) OF THE Act, where a trust or institution has been provisionally approved under section 80G(5)(vi) of the Act, the application for regular approval under section 80G(5)(vi) is required to be filed, at least six months prior to expiry of period of the provisional approval or within six months from the date of commencement of activities, whichever is earlier." 2.1 The Commissioner of Income ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 financed wholly or in part by the Government or a local authority; (vi) in relation to donations made after the 31st day of March, 1992, the institution or fund is for the time being approved by the Principal Commissioner or Commissioner; (emphasis supplied) (vii)............ (viii) .......... (ix).............. Provided that the institution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears; 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 04/03/1974, 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 18.02.2023 whereas the present application filed by the assessee on 27.03.2023 i.e. beyond the time limit allowed under clause (iii) of first proviso to section 80G(5) of the Income Tax Act, 1961, the ld.CIT(E) held it to be time barred. 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 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 within six months of start of activities, whichever is e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. If we agree with the interpretation of the ld.CIT(E), then say a trust which was formed in the year 2000, performed charitable activities since 2000, but did not apply for registration u/s.80G, the said trust will never be able to apply for registration now. This in our opinion is not the intention of the legislation. This interpretation leads to absurd situation. 11.1 In this context, we will like to refer to observations of the Hon'ble Supreme Court in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 intended by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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