Murarka Foundation, Kolkata V. CIT(Exemption), Kolkata

ITA 213/KOL/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 7799 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2023-2024
• Appeal Filed On: 04-02-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 80G; 12A

Judgement Text

ITA No. 213/KOL/2024 (A.Y. 2023-2024) Murarka Foundation 1 THE INCOME TAX APPELLATE TRIBUNAL, ‘A’ BENCH, KOLKATA Before Shri Rajpal Yadav, Vice-President (KZ) & Shri Sanjay Awasthi, Accountant Member I.T.A. No. 213/KOL/2024 Assessment Year: 2023-2024 Murarka Foundation,....................................Appellant C/o. P.K. Himmatsinghka & Co., 41, B.B. Ganguly Street, Central Plaza, 2 nd Floor, Kolkata-700012 [PAN:AAHTM2276P] -Vs.- Commissioner of Income Tax (Exemption)..Respondent Kolkata, 10B, Middleton Road, Kolkata-700071 Appearances by: Shri P.K. Himmat Singhka, A.R., appeared on behalf of the assessee Shri Subhendu Datta, CIT (D.R.), appeared on behalf of the Revenue Date of concluding the hearing : April 17, 2024 Date of pronouncing the order : April 17, 2024 O R D E R Per Rajpal Yadav, Vice-President (KZ):- The assessee is in appeal before the Tribunal against the order of ld. Commissioner of Income Tax (Exemption), Kolkata dated 18.01.2024 vide which application filed by the assessee in ITA No. 213/KOL/2024 (A.Y. 2023-2024) Murarka Foundation 2 Form No. 10AB for grant of regular registration under section 80G(5) has been rejected. 2. The ld. Counsel for the assessee while taking us through the record contended that the assessee-Trust incorporated on 11 th February, 2021. It has applied for provisional registration under section 12A as well as 80G(5). The application of the assessee moved under sub-clause (iv) of 1 st proviso to Section 80G(5) was accepted and a provisional registration under section 80G was granted vide order dated 5 th April, 2022 for a period from 5 th April, 2022 to A.Y. 2024-25. Meanwhile assessee has applied for grant of regular registration under section 12A, which has been granted to it. 3. The assessee thereafter filed an application under sub-clause (iii) of 1 st proviso to Section 80G(5) for grant of regular registration under section 80G. This application of the assessee has been rejected by the ld. CIT (Exemption) on the ground that since the assessee has commenced its activity and such application was not moved within six months from the commencement of the activity, therefore, this application is not maintainable. 4. Ld. Counsel for the assessee on the strength of the ITAT’s order dated 13 th September, 2023 passed in ITA Nos. 730 & 731/KOL/2023 in the case of West Bengal Welfare Society -vs.- CIT (Exemption), Kolkata contended that the twin conditions incorporated in sub-clause (iii) of 1 st proviso to section 80G(5) are not meant for excluding each other, rather if any of the conditions ITA No. 213/KOL/2024 (A.Y. 2023-2024) Murarka Foundation 3 is available, then regular registration under section 80G(5) is to be granted to an assessee. In other words, even if the assessee has commenced its activities prior in time, but the second condition, i.e. availability of six months from the end of the provisional registration is present, such application will be maintainable. He submitted that ld. CIT(Exemption) has misconstrued this provision of sub-clause 3 of 1 st proviso to section 80G(5) and he prayed that the impugned order be set aside and the matter be restored to the file of ld. CIT(Exemption) for deciding the issue on merit. 5. On the other hand, ld. CIT(DR) relied upon the order of ld. CIT(Exemption). 6. We have duly considered the rival contentions and gone through the record carefully. We find that Coordinate Bench of ITAT in the case of West Bengal Welfare Society has made a lucid enunciation of law and facts and we cannot do better than reproduction of that order. The finding recorded in paragraph no. 6 reads as under:- “6. We note that the ld. CIT(E) has misconstrued the aforesaid proviso to section 80G(5) of the Act. As per the provision, an application for final registration cannot be filed until and unless an assessee/trust has been given provisional approval u/s 80G(5)(iv) of the Act. The assessee was granted provisional approval on 30.11.2022 only, and within a few days i.e. on 03.12.2022, the assessee applied for final registration u/s Clause (iii) of 1st Proviso to section 80G(5) of the Act. Though the assessee might have commenced its activities prior to grant of provisional registration but that does not mean that the assessee in that event will be precluded from applying for final registration even after the grant 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 ITA No. 213/KOL/2024 (A.Y. 2023-2024) Murarka Foundation 4 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 I.T.A Nos.730&731/Kol/2023 Assessment year: 2023-24 West Bengal Welfare Society 4 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. However, since we have restored the matter to the ld. CIT(E) for decision afresh on merits on the application for final registration u/s 12A of the Act and since the registration u/s 80G(5) is dependent upon the registration u/s 12A of the Act, therefore, the application of the assessee for registration u/s 80G(5) is also restored to the ld. CIT(E) subject to the observations made above”. 7. Respectfully following the order of Coordinate Bench, we set aside the impugned order and restored this issue to the file of ld. CIT(Exemption). The ld. CIT(Exemption) shall decide the grant of regular registration to the assessee under sub-clause (iii) of 1 st proviso to section 80G(5) on merit. He would not dismiss it on account of technicalities. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 17/04/2024. Sd/- Sd/- (Sanjay Awasthi) (Rajpal Yadav) Accountant Member Vice-President (KZ) Kolkata, the 17 th day of April, 2024 Copies to :(1) Murarka Foundation, C/o. P.K. Himmatsinghka & Co., 41, B.B. Gang uly Street, Central Plaza, 2 nd Floor, Kolkata-700012 ITA No. 213/KOL/2024 (A.Y. 2023-2024) Murarka Foundation 5 (2) Commissioner of Income Tax (Exemption), Kolkata, 10B, Middleton Road, Kolkata-700071 (3) The Departmental Representative; (4) Guard File TRUE COPY By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S.