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TMI Blog2025 (5) TMI 686X X X X Extracts X X X X X X X X Extracts X X X X ..... at the time of hearing. Without prejudice to Ground No. 1 above, in the facts and circumstances of the cases as well as in law, the Comm of income a(Exemption) Pune be directed to treat Form 10AB filed on 13/09/2024 as fresh application for approval u/s 80G be restored setting aside his order dt 19/02/2025. 2. The appellant craves leave to add, alter, omit or substitute any of the grounds at the time of hearing of the appeal." Findings & Analysis : 3. We have heard both the parties and perused the records. In this case, Assessee has filed an application for approval under section 80G(5)(iii) of the Act on 13.09.2024. Ld.CIT(E) noted that activities of the Trust commenced in F.Y.2021-22. Ld.CIT(E) further held that since activities of the Assessee were already commenced as on the date of provisional approval, the Trust was required to file present application within six months from the date of provisional approval i.e. before 01.04.2022, however, CBDT has extended date to 30.06.2024. The ld.CIT(E) held that since assessee had not filed the application before 30.06.2024, the application of the assessee was time barred and rejected it. 4. On perusal of the paper book filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome 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 or fund referred to in clause (vi) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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) ....... 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 introduced the concept of "Provisional Approval". Also due to the amended, 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 was specified before which all those Trust/Institutions already having Registration was required to make a fresh application as per the amendment procedure. 7. In this background we have to interpret the relevant provisions. To interpret the provisions, we shall refer to the Budget Speech of the Hon'ble Finance Minister. 7.1 The Hon'ble Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder 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 simplify 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 Finance Minister 2020 and the Memorandum of Finance Bill, 2020 together, it becomes clear that the concept of Provisional registration was mainly to facilitate the registration of newly formed Trust/Institutions which have not yet begun the activities. The parliament in its wisdom has decided to differentiate between the Trust which were newl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Proviso to Section 80G(5) of the Act. This will be the harmonious interpretation. 11. 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 the Hon'ble Supreme Court 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 economy of rising prices and in fact we would find in a large ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l-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. 11.1 Thus, as observed by the 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 the Hon'ble Finance Minister and the Memorandum of Finance Bill. 2020. 11.2 Therefore, in these facts and circumstances of the case, we hold that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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