TMI Blog2024 (1) TMI 946X X X X Extracts X X X X X X X X Extracts X X X X ..... ion or within Six months of commencement of activities, whichever is earlier. 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. If we agree with the interpretation of the CIT(E), then say a trust which was formed in the year 2000, performed charitable activities since 2000, but did not applied 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. Statutory provision shall be interpreted in such a way to avoid absurdity. In this case to avoid the absurdity as discussed by us in ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E) shall grant opportunity to the assessee to filed additional submissions, if so desired. Application rejected as filled belated - taking view that commencement of activities of the assessee is 28.07.2022 and the assessee was required for regular approval under section 80G(5) on or before 28.01.2023, which the assessee failed - Whether receipt of donation can be considered as commencement of its activities? - HELD THAT:- We find that the assessee was allotted land from SMC vide allotment latter dated 23.12.2022 only. The assessee applied for regular approval on 23.04.2023. We find merit in the submissions of the assessee that the activities of assessee-trust in real sense starts from the day when the beneficiary is actually got benefits of the activities carried out by institution in furtherance of its objects and that mere receipt of donation is not a commencement of charitable activities. We also accept the contention of ld. AR for the assessee that in his case for the purpose of counting six months at the worst the date of allotment from SMC, which is 23.122.2022. Considering the peculiar facts of the present case, this appeal is restore back to the file of ld. CIT(E) to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01.2023. The assessee furnished details of activities in furtherance of its Memorandum of Association, to prove object of trust and its activities. The Ld.CIT(E) on receipt of application issued show cause notice to the assessee for seeking certain details. The assessee vide reply dated 01.05.2023 furnished required details. The Ld.CIT(E) on considering the details and by referring the Central Board of Direct Taxes (CBDT in short) Circular No.6 of 2023 [F.No.370133/06/2023- TPL] dated 24-05-2023, held. that in case of assessee the commencement of its activities is from 14.12.2000 and the assessee was required to obtain approval in Form-10AB on or before 30.09.2022, the application has not been filed within time and the same was rejected by taking view that application for approval is not maintainable . Aggrieved by the order of Ld.CIT(E) the assessee has filed present appeal before the Tribunal. 4. We have heard the submission of learned authorised representative (Ld. AR) of the assessee and learned Commissioner of Income-tax-Departmental Representative (ld. CIT-DR) for the Revenue. The Ld. AR for the assessee submits that the assessee is old. institute and never applied for ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts of the case. Admittedly, the assessee is an old. charitable institution which has been enjoying registration under Section 12A. Admittedly, the assessee has for the first time obtained the provisional approval under Section 80G(5) of the Act by order dated 01/12/2022. The assessee immediately on obtaining provisional approval and applied for regular approval on 09/01/2023. We find that the ld. CIT(E) rejected the application on the ground that the application is not filed within time limit prescribed under clause (iii) of third proviso of section 80G(5). We find that on similar set of facts, the Coordinate Bench of Jodhpur Tribunal in the case of Bhamashah Sundarlal Daga Charitable Trust Vs CIT(E) (supra) passed the following order: 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 introduced the concept of Provisional Approval . Also due to the amendment, all the existing Trust/Institutions which were already having registration u/s 12AA or 80G(5) were asked to re-apply for registration as per the amendment brought in 2020 and a date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 earlier 9. Thus these amendments were introduced to simply the procedure of registration of Charitable Trusts/Institutions. The amendment made to simplify a procedure cannot be interpreted in a way that it causes prejudice to the Trust/institutions. 10. Thus, when we read the Budget Speech of the Hon ble Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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 applied 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 the case of K P Varghese (supra), where in Hon ble SC observed as under : It is a well-recognised rule of construction that a statutory provision must be so construed, if possible, that absurdity and mischief may be avoided. There are many situations where the construction suggested on b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld. 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 Legislature, the Court may modify the language used by the Legislature or even 'do some violence to it, so as to achieve the obvious intention of the Legislature and produce a rational construction . 11.2 Thus, as observed by Hon ble Supreme Court, that the statutory provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order, the ld. CIT(E) shall grant reasonable opportunity of hearing. The assessee is also given liberty to file additional submission before ld. CIT(E) before passing such order. In the result, the grounds of appeal raised by the assessee are allowed for statistical purposes. 8. In the result, this appeal of assessee is allowed for statistical purposes. ITA No. 577/Srt/2023 ITA No. 578/Srt/2023 9. As noted above, the facts in both appeals are similar with ITA No. 555/Srt/2023, both the appellant-trust were old. and never applied for obtained approval under section 80G, both the appellant-trust for the first time obtained provisional approval on 01.12.2022 and on 19.01.2022 and immediately applied for regular approval. Application of both the appellant-trust were rejected by holding time barred. Considering the facts that on similar set of facts, we have restored the appeal of assessee in ITA No. 555/Srt/2023, therefore, following the principal of consistency these two appeals are also restored with similar directions. 10. In the result, both the appeals in ITA No. 577 578/Srt/2023 are allowed for statistical purpose. ITA No. 556/Srt/2023, (GHB Green Foundat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat combination of this bench in Vananchal Kela wani Tru st Vs CIT(E) in ITA No. 728/Srt/2023, while considering the similar plea of that assessee condoned the delay in filing application under section 80G(5) by following the decisions of Hon ble Delhi High Court in DCIT(E) vs. Vishwa Jagriti Mission [2013] 30 taxmann.com 41(Delhi). On careful reading of decision of Delhi High Court, we find that main question in DCIT(E) vs. Vishwa Jagriti Mission (supra) was whether the Tribunal was justified in condoning the delay in the filing of the application for registration under section 12A of the Act and whether the view taken by the Tribunal is perverse. The High Court held. that order of Tribunal in condoning the delay cannot be branded as perverse or unreasonable or irrational. While upholding the order of Delhi Tribunal, Delhi High Court referred decisions of Hon ble Apex Court in Ram Nath Sao Vs Gobardhan Sao [2002] 3 SCC 195 and in Land Acquisition Collector Vs Mst Katji (167 ITR 471 SC). Thus, following the same ratio of our decision, the delay in filing application for regular approval under section 80G(5) of 123 days are condoned. Considering the facts that we have condoned the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n (SMC) only on 28.12.2022 for starting of its project. The assessee applied for regular approval on 26.04.2023, which is well within time as per the language of section 80G(5) read with its clause (iii) of proviso attached thereto. The ld. AR for the assessee submits that mere receipt of donation is not charitable activities, unless the real beneficiary availed the benefits of activities in furtherance of object of the assessee. At the worst the date of allotment from SMC may be considered for considering for counting the period of six month jugglery in clause (iii) of section 80G(5) and as such the application of assessee is well within time. The ld. AR for the assessee submits that ld. CIT(E) has not disputed any other facts, thus, the assessee is eligible for regular approval. The ld. CIT(E) cancelled provisional approval without giving show cause notice, which is against the principal of natural justice. 20. On the other hand, the ld. CIT-DR for the revenue supported the order of ld. CIT(E) and would. submit that the real commencement of activities of assessee was rightly find out from the annual accounts of assessee, which is which is 28.07.2022 and the application was not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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