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TMI Blog2024 (1) TMI 877X X X X Extracts X X X X X X X X Extracts X X X X ..... n for deciding the above appeals en masse. 3. The grounds of appeal raised by the assessee-trust in "lead" case in ITA No.728/SRT/2023, are as follows: "1. On the facts and in circumstances of the case as well as law, the ld. CIT(Exemption) has erred in rejecting assessee's application u/s 80G(5) filed on 24.02.2023 on the ground that assessee didn't file the application before 30.09.2022 when the assessee has filed the application in time as per the extension granted till 30.09.2023 as per Circular No.6/2023 dated 29.05.2023. 2. Even otherwise, the ld.CIT(Exemption) has erred in rejecting application u/s 80G(5) filed on 24.02.2023, when the assessee was under honest belief that extension was granted till 30.09.2023, as per Circular no. 6/2023 dated 29.05.2023. 3. It is therefore prayed that the CIT(Exemption) should be directed passed u/s 80G(5) of the I.T. Act, 1961 may please be set aside to the file of CIT(Exemption) with appropriate direction. 4. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal." 4. The relevant material facts, as culled out from the material on record, are as follows. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, the ld CIT(E) was of the view that the same ratio apply for applications made under clause (iii) of first proviso to sub-section (5) of Section 80G of Income Tax Act, 1961 also. 5. The ld CIT(E) also stated that CBDT on multiple occasions had extended the time limit in filing the application in Form 10AB under clause (iii) of first proviso to sub-section (5) of Section 80G, which are as under: Sl. No. Circular No. Relaxation provided for filing application u/s 10AB under section 80G(5)(iii) 1 Circular No.12 of 2021 dated 25.06.2021 Extended upto 31st August 2021 2 Circular No.16/2021 dated 29.08.2021 Extended upto 31st March, 2022 3 Circular No.8/2022 dated 31.03.2022 Extended upto 30.09.2022 4 Circular No.6/2023 dated 24.05.2023 * The date was not extended so far as filing of form 10AB under section 80G(5)(iii) of Income Tax Act, 1961 is concerned. *extract from circular no.6 of 2023 dated 24.05.2023 "5. In order to mitigate genuine hardship in such cases, the Board, in the exercise of the power under section 119 of the Act, extends the due date of making an application in,- (i) Form No.10A, in case of an application under clause (i) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activities, whichever is earlier." 3. In view of the above, you are also requested to state the date of commencement of activities along with corroborative evidences. In absence of same, you are hereby further requested to explain as to why the date of Incorporation/Creation/Registration should not be treated as the date of commencement of activities for the purposes of determining 'due date' prescribed under section 80G(5)(iii) of the Act...." 7. In response to the same, the assessee has not filed any response. Thereafter, a fresh show cause notice dated 09/08/2023 was issued to the assessee to submit details/documents as called. In response to the same, the assessee has furnished its response wherein the assessee has submitted date of commencement of activities as 29/11/2001. In view of the same, the assessee was required to file application in Form 10AB under clause (iii) of first proviso to sub-section (5) of Section 80G, on or before 30/09/2022, which he has failed to submit. Therefore, the present application in Form No.10AB, u/s 80G(5)(iii) of the Act has not been filed within the time limit prescribed therein and therefore, the same is liable to be rejected as such, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s activities from 2001, therefore the criteria of "within six months of commencement of its activities, whichever is earlier." is not only difficult but impossible to achieve, especially in old trust. In this connection, various bodies, made representation before the Government and CBDT, however, no guidelines have come yet. Before cancelling the provisional approval, no show cause notice was given to the assessee. The ld Counsel also relied on the following decisions: (i) Brdy Buds Pet Care vs. CIT(Exemption) ITA No. 731/AHD/2023 (Ahmedabad-Trib.) (ii) Ahmednagar Cancer Society vs. CIT(Exemption) ITA No. 1192/PUN/2023 (Pune-Trib.) (iii) West Bengal Welfare Society vs. CIT(Exemption) ITA No. 730 & 731/Kol/2023 (Kolkata-Trib.) 11. In alternative to the above, the ld Counsel submitted that Tribunal has power to condone the delay. As the Ld.CIT(E) did not condone the delay in filing Form No.10AB u/s 80G(5) of the Act, therefore, Ld. Counsel contended that the delay in filing Form-10AB, u/s 80G(5)(iii) may be condoned and matter may be remitted back to the file of Ld.CIT(E) for granting approval, prayed for. To support such contentions, the Ld. Counsel relied on the judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15. However, in earlier Circular 8/2022, which was issued on 31.03.2022 the CBDT has given instruction about approval 80G(5) of the Act, which is reproduced below: "1. On consideration of difficulties in electronic filing of form No.10AB as stipulated in Rule 2C or 11AA or 17A of the Income-Tax Rules, 1962 w.e.f. 01.04.2021, the Central Board of Direct Taxes (CBDT), in exercise of its powers under Section 119(1) of the Act, extends the due date for electronic filing of such Form as under: (i) The application for registration or approval under Section 10(23C), 12A or 80G of the Act in form No.10AB, for which the last date for filing falls on or before 29th September, 2022, may be filed on or before 30th September, 2022." 16. Thus, in the Circular No.8/2022 dated 31.03.2022, cited above, there is mention about Section 80G of the Act (in form No. 10AB) for registration or approval and extended date is mentioned as 30.09.2022. However, in the latest Circular No.6/2023 dated 24.05.2023, the CBDT did not clarify or did not mention about the extension of the time limit for Section 80G (5) of the Act, (in form No. 10AB). Therefore in the situation, it is difficult to interpret clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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. 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 app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price and honestly carries out such contractual obligation. It would indeed be strange if obedience to the law should attract the levy of tax on income which has neither arisen to the assessee nor has been received by him. If we may take another illustration, let us consider a case where 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, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cordingly, the appeal of the assessee is allowed for statistical purpose. Since we have set aside to Ld.CIT(E), we do not intend to adjudicate each ground separately." 18. We note that the Co-ordinate Bench of ITAT Jodhpur in the case of Bhamashah Sundarlal Daga Charitable Trust (supra) dealt with only the issue/terminology of "whichever is earlier" which is applicable to new trust which have created recently, and it does not deal with condonation of delay in case of old trust who made the application before ld CIT(E ) very late, that is, the issue mention in clause (iii) of 3rd proviso of section 80(5), "where the institution or fund has been provisionally approved, at least six months prior to expiry of the period of the provisional approval.." has not been adjudicated. 19. Now the next question before us is that whether Tribunal has power to condone the delay in filing the Form No.10AB, u/s 80G(5) of the Act. The Tribunal is a final fact finding authority, and based on the assessee`s facts and undue hardship created by the clause (iii) of 3rd proviso of section 80(5) of the Act, the Tribunal may condone the delay in filing the Form No.10AB, u/s 80G(5) of the Act. Therefore, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i which indicated that they also viewed Sikri to be responsible for the mis-representation, fake certificates of registration, etc. Moreover, the Tribunal has taken note of the fact that the Metropolitan Magistrate, acting on the police complaint, remanded Sikri to custody and also referred to the fact that in the bail application, Sikri had again owned up responsibility for the fake certificates of registration. Taking an overall view of the facts and going by the preponderance of probabilities, the Tribunal came to hold the view that it was because of the irregularities, illegalities and misrepresentations of Sikri that the assessee-society was led to believe that appropriate applications under the Act were already filed with the income tax authorities for registration. The assessee-society was thus under the belief, though mistaken but honest, that there was no delay and once it came to know on 06.12.2005 about the irregularities on a complaint from M.P. Mansinghka Trust of Mumbai and on further enquiry conducted on 14.12.2005 by the governing body, it hastened to take remedial action by filing applications for registration both under section 12A and 80G of the Act, which were f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision, kept in mind the aforesaid principles adumbrated by the Supreme Court. Its order cannot, therefore, be branded as perverse or unreasonable or irrational. 21. That takes us to the question as to whether in condoning the delay the Tribunal committed any error of law or illegality. There is a wealth of judicial literature on the subject of condonation of delay and most of the cases have arisen under section 5 of the Limitation Act, 1963. The principles that are to be applied are, however, no different whenever the question of condonation of delay comes up for consideration under other statutes. In the oft quoted judgment of the Supreme Court in Collector, Land Acquisition v. MST. Katiji [1987] 167 ITR 471 it was observed as follows: - "The Legislature has conferred the power to condone delay by enacting section 5 of the Limitation Act of 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on the merits". The expression "sufficient cause" employed by the Legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice that being the life-purpose of the existence of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whereabouts were never known. Even in his bail application he had confessed to his role in the alleged irregularities and illegalities. There has been no want of bona fides on the part of the assessee, nor did it fail to take immediate action once it was apprised of the irregularities in its affairs by M. P. Mansinghka Trust of Mumbai. In these circumstances, we are unable to say that the Tribunal committed an error in condoning the delay. 24. On the question of perversity of the decision of the Tribunal we may also refer to the judgment of the Supreme Court in Sree Meenakshi Mills Ltd. v. CIT [1957] 31 ITR 28. In that judgment, it was noted that only a question of law can be referred for decision of the Court and the decision of the Tribunal on a question of fact can be challenged only if it is not supported by any evidence, or is unreasonable or perverse. The following pithy observations of T.L. Venkatarama Aiyar, J. speaking for the Court are relevant: - " ....................... The point for decision is whether there arises out of the order of the Tribunal any question which can be the subject of reference under section 66 (1) of the Act Under that section, it is only a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Court should prefer the alternative view on the same facts and evidence and discard the Tribunal's view. Obviously the argument cannot be upheld, having regard to the above judgments. 27. For the above reasons we answer the substantial questions of law framed in ITA Nos. 754, 773 and 775 of 2010 in the negative, against the Revenue and in favour of the assessee. Consequently the sole substantial question of law framed by us in ITA Nos. 1092, 1101, 1103, 1104, 1112 and 1124 of 2010 is answered in the affirmative, against the Revenue and in favour of the assessee. The C.M. Application is disposed of. The appeals of the Revenue are accordingly dismissed with no order as to costs." 20. Respectfully following the judgement of the Hon'ble Delhi High Court in the case of Vishwa Jagriti Mission (supra), wherein the delay in filing application for registration u/s 12A, was allowable / condoned, hence, we condone the delay in filing Form 10AB, u/s 80G(5), and remit the matter back to the file of Ld.CIT(E) with the direction to decide the application of assessee, in accordance with law. The assessee is also directed to file details and documents, before ld CIT(E), as and when, re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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