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TMI Blog2024 (6) TMI 1281X X X X Extracts X X X X X X X X Extracts X X X X ..... case) in ITA No. 126/Rjt/2024 are as follows: 1. Hon. CIT(Exemption) erred in law in interpreting and considering limitation period as "within six months of commencement of the activities" which is practically impossible for the existing trusts applying for the first time for approval u/s 80G(5). Assessee has filed form 10AB "six months prior to expiry of the period of the provisional approval" 2. Hon. CIT(Exemption) erred in not granting final registration u/s 80G(5) for the reason of delay in filing form 10AB inspite of the fact that form 10AB was not available on Income Tax Portal at the time of due date applicable to assessee. 3. Hon. CIT Exemption) erred in not considering extension granted till 30/09/2023 to charitable trusts in submission of forms vide circular no. 06/2023 dated 24/05/2023 keeping in view the technical difficulties faced in submission of forms. 4. Hon. CIT(Exemption) erred in law by not providing personal opportunity of being heard to the assessee before rejecting the application in Form 10AB and rejection is made only on the basis of documents submitted in response to notice calling for details. It is therefore prayed that order passed u/s 80G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only in respect of applications made under Clause (i) of first proviso to sub-section (5) of Section 80G of the Act in respect of application made in form 10A under para 5(1) of circular No. 6/2023, dated 24.05.2023. Therefore, no extension was provided after 30.09.2022 in respect of applications made under Clause (iii) of fist proviso to sub-section (5) of Section 80G of the Act. 6. The Ld CIT(E ) noted that assessee has filed Form 10AB, u/s 80G(5) of the Act, on 30/09/2023. The date of registration/incorporation in assessee's case is 23.12.1974, as per Form No. 10AB and the assessee had been granted order for provisional approval in Form No. 10AC issued on 23.03.2022 under Clause (iv) of first proviso to sub-section (5) of section 80G for the period commencing from 04/04/2022 to A.Y. 2024-25. 7. Hence, Ld. CIT(E) held that date of commencement of activities in the assessee's case is 23.12.1974 and the assessee was supposed to file application in Form 10AB, u/s 80G(5) of the Act, within six months or up to 30.09.2022, whichever is earlier, however, the assessee failed to submit the application within the above said period. Therefore the Ld. CIT(E) rejected the assessee's applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is ambiguity in the provisions of section 80G(5)(iii) of the Act, vis-à-vis, CBDT circular No.6 /2023. Since the assessee- trust was incorporated on 23.12.1974 and therefore it was not possible to file the application within six months of commencement of its activities, as per the provisions of Section 80G(5)(iii) of the Act, therefore in these circumstances, we do not have any option but to condone the delay in filing Form 10AB, u/s 80G(5)(iii) of the Act and for that we rely on the judgment of the Co-ordinate Bench of ITAT Surat in the case of Vananchal Kelvani Trust ITA Nos. 728 & 732/Srt/2023 wherein, based on the identical facts, the delay was condoned. The findings of the Coordinate Bench are reproduced below: 13. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position.We note that in the latest Circular No.6/2023 dated 24.05.2023, the date was not extended by the CBDT, so far as, filing of Form No. 10AB, u/s 80G(5)(iii) of the Income Tax Act, 1961, is concerned. 14. We note that the extended period, as per Circular No.8/2022, as extended period declared by the Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich states as follows: "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." Therefore, it is undue hardship to the assessee, as the CBDT, in the latest Circular No.6/2023 dated 24.05.2023, about application for registration or approval under Section 80G, in form No. 10AB, did not mention the extended period. Thus, we find merit in the submission of ld Counsel to the effect that assessee is an old trust, which had registered on 29.11.2001 and commenced its activities from 2001, therefore, it is impossible to file the application u/s 80G(5)(iii) of the Act, "within six months of commencement of its activities' as stated in above clause (iii) of 3rd proviso of section 80G(5) of the Act. Besides, as per circular No.8/2022 of CBDT dated 31.03.2022, the extended time is up to 30.09.2022, however, the assessee filed Form No.10AB, u/s 80G(5) (iii) on 24.02.2023, therefore, application filed by the assessee before the ld CIT(E) is delayed by 147 days (approx.), and hence ld CIT(E) rejected application of assessee in Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 Varghase (supra), where in Hon'ble SC observed as under: Quote, "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 behalf of the revenue would lead to a wholly unreasonable result which could never have been intended by the Legislature. Take, for example, a case where A agrees to sell his property to B for a certain price and before the sale is completed pursuant to the agreement and it is quite well known that sometimes the completion of the sale may take place even a couple of years after the date of the agreement - the market price shoots up with the result that the market price prevailing on the date of the sale exceeds the agreed price at which the property is sold by more than 15 per cent of such agreed price. This is not at all an uncommon case in an econom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 -" Unquote. 11.2 Thus, as observed by Hon'ble Supreme Court, that the statutory provision shall be interpreted in such a way to avoid absurdity. In this case to avoid the absurdity as discussed by us in earlier paragraph, 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 already started charitable activities before obtaining Provisional Registration. We derive the strength from the Speech of Hon'ble Finance Minister and the Memorandum of Finance Bill 2020. 11.3 Therefore, in these fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AB, u/s 80G(5) should be condoned in the interest of justice. For that we rely on the judgment of Hon'ble Delhi High Court in the case of DCIT(Exemption) vs. Vishwa Jagriti Mission [2013] 30 taxmann.com 41 (Delhi)/[2013] 213 Taxman 65 (Delhi),wherein the Hon'ble Delhi High Court held as follows: "18. The main question that falls for our consideration is 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 question whether there was sufficient cause for the delay is always a question of fact as has been held by two Division Bench judgments of this Court: (i) CIT v. Parma Nand [2004] 266 ITR 255/135 Taxman 100 (Delhi) and (ii) CIT v. ITOCHU Corpn. [2004] 268 ITR 172/139 Taxman 348 (Delhi). The Tribunal has, in an elaborate order in which all the facts and the rival submissions have been taken into consideration, held that there was sufficient cause for the delay on the part of the assessee-society in making the applications for registration under section 12A and 80G of the Act. It is not necessary, nor is it proper, for us to decide the cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the DIT (Exemptions) on 21.12.2005; these applications were obviously delayed and the condonation application was filed on 14.03.2006 narrating the events that led to the delay. 19. In the above circumstances, it seems to us that the Tribunal has acted judicially, taking note of all the facts and circumstances including probabilities of the case. In Esthuri Aswathiah v. CIT [1967] 66 ITR 478 (SC), the Supreme Court outlined the duties of the Tribunal in the following words: - "The function of the Tribunal in hearing an appeal is purely judicial. It is under a duty to decide all questions of fact and law raised in the appeal before it: for that purpose it must consider whether on the materials relied upon by the assessee his plea is made out. Conclusive proof of the claim is not predicated: the Tribunal may act upon probabilities, and presumptions may supply gaps in the evidence which may not, on account of delay or the nature of the transactions or for other reasons, be supplied from independent sources. But the Tribunal cannot make arbitrary decisions: it cannot found its judgment on conjectures, surmises or speculation. Between the claims of the public revenue and of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his court has been making a justifiably liberal approach in matters instituted in this court. But the message does not appear to have percolated down to all the other courts in the hierarchy." 22. The following general principles were laid down and it is these principles which guide the Court in approaching the question of condonation of delay: - "And such a liberal approach is adopted on principle as it is realized that: 1. Ordinarily, a litigant does not stand to benefit by lodging an appeal late. 2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. 3. "Every day's delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational, common sense and pragmatic manner. 4. When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, for the oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court, and it is impossible to argue that the conclusion of the Tribunal is anything but one of fact. It has been held on the corresponding provisions in the English Income-tax statutes that a finding on a question of fact is open to attack as erroneous in law only if it is not supported by any evidence, or if it is unreasonable and perverse, but that where there is evidence to consider, the decision of the Tribunal is final even though the Court might not, on the materials, have come to the same conclusion if it had the power to substitute its own judgment. In Great Western Railway Co. v. Bater (1), Lord Atkinson observed: "Their (Commissioners') determinations of questions of pure fact are not to be disturbed, any more than are the findings of a jury, unless it should appear that there was no evidence before them upon which they, as reasonable men, could come to the conclusion to which they have come: and this, even though the Court of Review would on the evidence have come to a conclusion entirely different from theirs." There is no need to further elaborate this position, because the law as laid down in these observations is well settled, and has been adopted in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee is treated to be allowed. 21. Since, we have adjudicated the issue under consideration by taking the "lead" case in ITANo.728/SRT/2023 and since the facts in ITA No.732/SRT/2023 are similar and identical, therefore our instant adjudication in ITA No.728/SRT/2023 is mutatis mutandis applicable to ITA No.732/SRT/2023. We order accordingly. 12. We note that the issue under consideration is squarely covered by the judgment of the Co-ordinate Bench of ITAT Surat in the case of Vananchal Kelvani Trust (supra) and there is no change in facts and law. Therefore, we condone the delay in filing application in Form 10AB, u/s 80G(5)(iii) of the Act and remit the matter back to the file of Ld. CIT(E), with a direction to decide the application of assessee in accordance with law. We also direct the assessee to file the details and relevant documents, if any, before Ld. CIT(E), as and when required by Ld. CIT(E), for disposal of this appeal. For Statistical purposes, the appeal of the assessee is treated to be allowed. 13. Since the facts and circumstances in the case of Shree Satya Kabir Sahen ni Gadi in ITA No.127/RJT/2024, are identical to those considered in the case of S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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