TMI Blog2024 (4) TMI 982X X X X Extracts X X X X X X X X Extracts X X X X ..... istration can be made at least six months prior to the expiry of the period of provisional registration or within six months of the commencement of its activity, whichever is earlier, which means that the application for final registration has to be made at the earliest possible event i.e. either within six months of the commencement of the activities or at least six months prior to the expiry of the provisional registration. The aforesaid provision does not mean that there is any bar on the applicant to move an application before the period of six months from the expiry of the provisional registration. What has been provided is that the application must be made before the expiry of six months from the date of expiry of final registration. There is no bar in moving the application at the earliest possible event, rather, it is expected from the assessee-trust to do so. The impugned order of the CIT(E) is set aside and the matter is restored to the ld. CIT(E) to consider the application of the assessee for final registration and grant the same if the same is otherwise so admissible to the assessee. Approval u/s 80G(5) - CIT (Exemption) rejected the application of the assessee observi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioned appeals have been preferred by the assessee against the separate orders both dated 09.01.2024 of the Commissioner of Income Tax (Exemption), Kolkata [hereinafter referred to as CIT(Exemption) ]. ITA No.164/Kol/2024 is against the rejection of application for registration u/s 12AA(1)(ac)(iii) of the Income Tax Act (hereinafter referred to as the Act ) and ITA No.165/Kol/2024 is against the rejection of the application of the assessee for final approval as per the provisions of section 80G(5)(iii) of the Act. 2. ITA No.164/Kol/2024 - The ld. CIT(Exemptions) has rejected the application holding the same to be prima facie not maintainable being premature. The ld. CIT(Exemptions) observed that the assessee earlier was granted provisional registration in Form 10AC which was valid till A.Y 2026-27. He, therefore, held that the present application of the assessee being premature was not maintainable and rejected the same. Being aggrieved by the above order of the ld. CIT(Exemptions), the assessee has come in appeal before us. 3. We have heard the rival contentions and gone through the record. The assessee-trust has been granted registration u/s 12AB(1)(a) of the Act for five years v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame if the same is otherwise so admissible to the assessee. 5. ITA No.165/Kol/2024 - The brief facts of the case are that the assessee was already registered/approved u/s 80G(5) of the Act as a charitable institution since 2021. However, an amendment was brought into the relevant provisions of Section 80G of the Act vide Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (hereinafter referred to as Amendment Act of 2020 ) with effect from 01.04.2021 whereby, an institution, which has already been approved before the aforesaid amendment, was required to re-apply for grant of approval under Clause (i) of the First Proviso to section 80G(5) of the Act within three months from the 1st day of April, 2021. The assessee, however, applied for provisional approval under Clause (iv) to First Proviso to section 80G(5) of the Act, which was meant for the institutes who have to apply for the first time and not for revalidating the existing approval prior to amendment. The assessee was granted provisional approval u/s Clause (iv) to First Proviso to section 80G(5) of the Act in Form 10AC vide order dated 31.05.2021 for a period from 31.05.2021 to AY 2024-25. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iately before its amendment by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020), within three months from the 1st day of April, 2021; (ii) where the institution or fund is approved and the period of such approval is due to expire, at least six months prior to expiry of the said period; (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; (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 himsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... five years. In both the cases i.e. institutions which have been granted approval under Clause (i) or the institutions which have been granted approval under Clause (iv) to First Proviso to section 80G(5) of the Act have to apply for final registration under Clause (iii) of First Proviso to section 80G(5). Such institutions are required to apply for final registration at least six months 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, it appears that the assessee-institution instead of applying for renewal of registration under Clause (i) to First Proviso to section 80G(5) of the Act has applied for fresh provisional registration under Clause (iv) to First Proviso to section 80G(5) of the Act and incidentally, the said fresh provisional registration has also been granted to the assessee-institution from 10.03.2023 to A.Y 2025-26. If the assessee-institution would have applied for renewal of the registration under Clause (i), then its approval u/s 80G(5) would have continued without any break. The last date for making such an application was upto 30.09.2023 as per the extended da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of provisional registration. The assessee as per statutory provision could not have directly applied for final registration without grant of provisional registration. The aforesaid proviso, therefore, is to be read as that after the grant of provisional registration, if the assessee has not commenced its activities, he may apply for registration within six months of the commencement of its activities or within the six months prior to the expiry of the period of provisional approval, whichever is earlier. In any case, the assessee is eligible to apply for final registration only after the grant of provisional approval. Therefore, we hold that there is no delay on the part of the assessee in filing application in the prescribed form for grant of final registration under Clause (iii) of 1st Proviso to section 80G(5) of the Act. In view of the above observations, the matter is restored the file of the CIT(E) for decision afresh in the light of the observations made above. 5. It is to be further noted here that the ld. CIT(Exemption) firstly misconstrued about the CBDT Circulars regarding the exemption of date for final applications for approval. The said Circular/time limits are app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ground that the institution had already commenced its activities even prior to grant of provisional registration. Under such circumstances, the date of commencement of activity will be counted when an activity is undertaken after the grant of provisional registration either under Clause (i) or Clause (iv) to First Proviso to section 80G(5) of the Act. 7. In the case in hand, the assessee admittedly has applied for final registration after grant of provisional registration under Clause (iv) to First Proviso to section 80G(5) of the Act and therefore, the application filed by the assessee is within limitation period. The issue is otherwise squarely covered by the decision of the Coordinate Bench of the Tribunal in the case of Vivekananda Mission Asram vs. CIT (supra) and in the case of West Bengal Welfare Society vs. CIT(Exemption) (supra) and further by the decision in the case of Sr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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