CIT( EXEMPTION), KOLKATA V. ANANDA NAGAR DEVELOPMENT SOCIETY, KOLKATA

MA 38/KOL/2024

AI Insights

The case involves the Ananda Nagar Development Society, which sought clarification on its registration status under section 80G(5) of the Income Tax Act, 1961. Initially, the Society was granted approval under clause (i) of the 1st proviso to section 80G(5), valid until AY 2026-27. However, due to a clerical error in the Tribunal's earlier order, it was mistakenly noted that the Society had provisional registration. The Department filed a Miscellaneous Application to correct this error, leading to the recall of the Tribunal's previous order and the restoration of the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 298762 (ITAT-KOLKATA)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 03-01-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 10; 80G

Judgement Text

"आयकर अपीलीय अिधकरण कोलकाता 'B' पीठ, कोलकाता म¤ IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B’ BENCH, KOLKATA Before SRI SANJAY GARG, JUDICIAL MEMBER & SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER M.A. No.: 38/KOL/2024 In I.T.A. No.: 377/KOL/2024 Assessment Year: N.A. CIT(Exemptions), Kolkata .............. Applicant Vs. Ananda Nagar Development Society ………….. Respondent At 475, Gouranga Palli, VIP Nagar, Kasba-Tiljala, VIP Nagar S.O. South 24 Pgs, West Bengal, India-700100. (PAN: AABTA1419L) Appearances: Department represented by: Shri Sailen Samadder, Addl. CIT Sr. DR. Assessee represented by: Shri P.K. Ray, Advocate Date of concluding the hearing : January 3rd, 2025 Date of pronouncing the order : January 3rd, 2025 ORDER Per Sanjay Garg, Judicial Member: The present Miscellaneous Application has been moved by the Revenue pleading that a mistake apparent on record has occurred in the order of the Tribunal dated 09.05.2024 passed in ITA No. 377/KOL/2024. 2. It has been pleaded in the present Miscellaneous Application that the assessee Trust was granted approval under clause (i) of the 1st proviso to sec. 80G(5) of the Income Tax Act, 1961 (hereinafter referred to as the “Act”), which was valid until Assessment Year (AY) 2026-27. That this Tribunal in the impugned order, inadvertently observed that the assessee was granted provisional registration under clause (iv) of 1st proviso to section 80G(5) of the Act instead of clause (i) of 1st proviso to sec. 80G(5) of the Act vide order dated M.A. No.: 38/KOL/2024 In I.T.A. No.: 377/KOL/2024 Ananda Nagar Development Society Page 2 of 6 28.05.2021. The assessee, thereafter, applied for final approval under clause (iii) of 1st proviso to section 80G(5) of the Act. That the Tribunal vide impugned order dated 09.05.2024 has directed 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. It has been pleaded that since assessee has already been granted regular registration (not provisional), which is valid from AY 2022-23 to AY 2026-27, therefore, there was no need to move application before the Ld. CIT(E) for final registration and the same has rightly been dismissed by the Ld. CIT(E). It has therefore, been pleaded that a mistake apparent on record has occurred in the order of the Tribunal in directing the Ld. CIT(E) to consider the application of the assessee for final/regular registration whereas, the assessee has already been granted regular registration up to AY 2026-27. 3. Ld. Counsel for the respondent has also agreed that the assessee had applied for regular registration under clause (iii) to 1st proviso to section 80G(5) of the Act under a mistaken belief that the earlier was a provisional registration and that the assessee was supposed to apply for final registration u/s 12A(1)(ac)(iii) of the Act. 4. We have considered the rival submission and gone through the record. We find from the record that in this case, the assessee was already approved u/s. 80G(5) of the Act as a charitable institution prior to the year 2021. An amendment was brought into the relevant provisions, whereby, the institution which stood already approved u/s 80G(5) of the Act on or before 01.04.2021, had to apply for fresh approval under the provisions of Section 80G(5)of the Act. The assessee accordingly applied for approval under clause (i) of 1st proviso to section 80G(5) of the Act. The said application of the assessee was allowed on 31.05.2021. However, both the assessee as well as the ld. CIT (Exemption) have misconstrued the provisions and were of the view that the said approval was a provisional approval and that the assessee was supposed to apply for final approval. A perusal of the certificate granted in Form no. 10AC by the ld. CIT (Exemption) dated 31.05.2021 reveals that ld. CIT M.A. No.: 38/KOL/2024 In I.T.A. No.: 377/KOL/2024 Ananda Nagar Development Society Page 3 of 6 (Exemption) mentioned in the title “Order for provisional approval” and even in column nos. 7 & 9 of the said order the ld. CIT (Exemption) has expressly mentioned that it was an order of provisional approval. The assessee/appellant under the circumstances applied for final approval under clause (iii) of 1st proviso to section 80G(5) of the Act. Thereafter, ld. CIT (Exemption) vide a small and cryptic order rejected the application of the assessee stating therein that the earlier order in Form no. 10AC was still valid till AY 2026-27 and the application of the assessee was premature. Being aggrieved by the said order of the ld. CIT (Exemption), the assessee preferred appeal before us. 5. Since in this case also the ld. CIT (Exemption), in his order dated 04.07.2023, has mentioned that the approval granted to the assessee was provisional and further in the impugned order dated 04.07.2023 had rejected the application of the assessee for final/regular approval stating the same as to be premature, hence, under the circumstances, the assessee had come in appeal before us against the said rejection. This Tribunal under the circumstances as narrated above, directed the ld. CIT (Exemption) to consider the application of the assessee for final approval. 6. However, Ld. CIT, DR pointed out that this issue has been resolved by the Board by issuance of a Circular bearing No. 11 of 2022 on 3rd June, 2022. The Board has clarified as under:- “5. In view of the above, it is hereby clarified that,- (i) the conditions contained in Form No. 10AC, issued between 01.04.2021 till the date of issuance of this Circular, shall be read as if the said conditions had been substituted with the conditions as provided in the Table 1 with effect from 1st April, 2022; Table 1 Sl. No Section Code Section under which order is passed Conditions M.A. No.: 38/KOL/2024 In I.T.A. No.: 377/KOL/2024 Ananda Nagar Development Society Page 4 of 6 1 01 Clause (a) of sub- section (1) of section 12AB As per Annexure A 2 02 Clause (c) of sub- section (1) of section 12AB As per Annexure B 3 03 to 06 Clause (i) of second proviso to clause (23C) of section 10 As per Annexure C 4 07 to 10 Clause (iii) of second proviso to clause (23C) of section 10 As per Annexure D 5 11 Clause (i) of second proviso to sub-section (5) of section 80G As per Annexure E 6 12 Clause (iii) of second proviso to sub-section (5) of section 80G As per Annexure F (ii) where due to technical glitches, Form No. 10AC has been issued during FY 2021- 2022 with the heading “Order for provisional registration” or “ Order for provisional approval” instead of “Order for registration” or “ Order for approval”, then all such Form No. 10AC shall be considered as an “Order for registration or approval” and, in such cases where Form No. 10AC has been issued, - (a) under section code 01 (applications seeking re-registration),- (i) in the heading and in rows 6, 7, 9 and 10 the words ,“ provisional registration” shall be read as “registration”; (ii) in row 8 the word “ provisionally registered” shall be read as “registered”; (b) under section codes 03, 04, 05, 06 or 11 (applications seeking re-approval),- (i) in the heading and in rows 6, 7, 9 and 10 the words ,“ provisional approval” shall be read as “approval”; (ii)in row 8 the word “provisionally approved” shall be read as “approved”; (iii) row no 5 of Form No. 10AC (issued for all section codes) shall be read as “Unique Registration Number” instead of M.A. No.: 38/KOL/2024 In I.T.A. No.: 377/KOL/2024 Ananda Nagar Development Society Page 5 of 6 “Provisional Approval/ Approval Number” or “Provisional Registration/ Registration Number”, as the case maybe”. He pointed out that under sub-clause (ii) of clause 5 of this Circular, it has been contemplated that where due to technical glitches, Form No. 10AC has been issued during FY 2021- 2022 with the heading “Order for provisional registration” or “ Order for provisional approval” instead of “Order for registration” or “ Order for approval”, then all such Form No. 10AC shall be considered as an “Order for registration or approval” and, in such cases where Form No. 10AC has been issued. Therefore, all registrations issued by CPC, Bengaluru under sub-clause (i) of section 12AC(1) would be construed as if granted for regular purposes. 7. Now, the Department has come with Miscellaneous Application stating therein that the observation of this Tribunal is based on incorrect assumption of facts and that the Tribunal has assumed that the assessee has been granted provisional approval whereas, the approval granted to the assessee earlier vide order dated 31.05.2021 was a regular/final approval. As noted above, the aforesaid observation of the Tribunal was on account of the aforesaid confusion created on account of incorrect mention in the relevant columns of Form 10AC stating the said order to be a provisional order. However, the said confusion stood clarified by the CBDT under circular No. 11 of l2022 (supra), vide which it has been clarified that the provisional approval will be construed as regular registration under clause (i) of 1st proviso to section 80G(5) of the Act. Therefore, there was no requirement of setting aside this matter to the file of the ld. CIT (Exemption). Therefore, under these circumstances, an inadvertent error apparent on record has occurred in the order of the Tribunal because of not bringing the aforesaid developments before this Tribunal. Therefore, the impugned order of the Tribunal dated 09.05.2024 passed in ITA No. 377/KOL/2024 is hereby recalled. The Registry is directed to restore the appeal at its original number. Since the entire facts and circumstances of the case have already been considered and adjudicated upon by us while deciding this Miscellaneous Application, therefore, no useful purpose will be served in fixing the main appeal on a later date. The Registry M.A. No.: 38/KOL/2024 In I.T.A. No.: 377/KOL/2024 Ananda Nagar Development Society Page 6 of 6 is directed to fix the main appeal for hearing for today, itself, so that the same may be adjudicated in light of the observations made in this Miscellaneous Application. Copy of this order be also placed in the main appeal. 8. In the result, the Miscellaneous Application filed by the Department is hereby allowed. Order pronounced in the open Court on 3rd January, 2025. Sd/- Sd/- [Sanjay Awasthi] [Sanjay Garg] Accountant Member Judicial Member Dated: 03.01.2025 J.Dey (Sr. P.S.) Copy of the order forwarded to: 1. CIT(Exemptions), Kolkata. 2. Ananda Nagar Development Society 3. CIT(DR), Kolkata Benches, Kolkata. 4. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata "