THE OLD RKCIANS ASSOCIATION, RAJKOT, RAJKOT V. The CIT (Exemption), Ahmedabad, Ahmedabad

ITA 265/RJT/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 2200 (ITAT-RAJKOT)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 19-05-2024
• Assessment Year: 2022-2023
• Appeal Filed On: 19-07-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 80G

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकर अपील सं./ITA No. 265/RJT/2023 (Assessment Year: 2022-23) (Hybrid Hearing) The Old Rkcians Association, Rajkot, C/o The Rajkumar College, Dr. Radhakrishna Road, Rajkot-360001 Vs. The CIT (Exemption), Ahmedabad थायीलेखासं./जीआइआरसं./PAN/GIR No.: AABTT6866C (अपीलाथ /Appellant) ( यथ /Respondent) नधा रतीक ओरसे / Assessee by : Shri Darshak Thakkar, AR राज वक ओरसे/Revenue by : Shri Shramdeep Sinha, CIT-DR स ु नवाईक तार ख/ Date of Hearing : 20/05/2024 घोषणाक तार ख/Date of Pronouncement : 27/05/2024 आदेश/ORDER PER DR. A. L. SAINI, AM: Captioned appeal filed by the assessee, is directed against the order passed by the Learned Commissioner of Income Tax (Exemption), (in short ‘the Ld. CIT(E)’), Ahmedabad, vide order dated 28 th May, 2023, wherein the Ld. CIT(E) has rejected the assessee’s application filed in Form No. 10AB u/s 80G(5) of the Act, stating that assessee did not file the application on time, as per CBDT Circular No. 8/2022, dated 31 st March, 2022. I.T.A No. 265/Rjt/2023 A.Y. 2022-23 The Old Rkcians Association vs. CIT (Exemption) 2 2. The facts of the case which can be stated quite shortly are as follows: The assessee-trust filed an application for approval of the trust under clause (iii) of first proviso to sub-section (5) of section 80G of the Income Tax Act 1961,in Form no.10AB, electronically. As per Ld. CIT(E), the assessee filed the application in Form No. 10AB late, therefore, ld. CIT(E) issued show cause notice to the assessee to explain the delay in filing the application in Form No. 10AB, u/s 80G(5) of the Act. By way of said show-cause notice, the assessee was specifically requested to state the date of commencement of activities [refer clause (iii) of first proviso to section 80G(5)] and asked the assessee-trust to file relevant documents in support of his claim. In response to the same, the assessee, vide submission filed electronically on 03/03/2023, has submitted that date of commencement of activities is 25.08.2009. In view of the same, vide further notice dated 04/05/2023, the assessee was intimated that apparently they have not filed the present application u/s 80G(5) of the Act, in Form No. 10AB, within the due date mentioned in the section 80G(5)(iii) of the Act and therefore, the assessee was requested to explain as to why the present application filed in section 80G(5) (iii) in Form No. 10AB should not be treated as not filed within the due date specified in the Act and why the same should not be rejected as non-maintainable. 3. In response to the above, the assessee-trust, vide its response dated 05/05/2023, has submitted its reply wherein it has been contented that amendment made in the clause (iii) of first proviso to section 80G(5) of the Act, was made without visualizing the scenario for the trust/institution who have already commenced their activities. The assessee further added that I.T.A No. 265/Rjt/2023 A.Y. 2022-23 The Old Rkcians Association vs. CIT (Exemption) 3 Finance Act, 2023 has addressed this anomaly of the trusts and institutions under section 80G regime, which have already commenced their activities, and has requested to grant of final approval under clause (iii) of first proviso to sub-section (5) of section 80G of the Act as the trust is entitled for it. 4. However, the PCIT rejected the contention of the assessee and noted that as per the provisions of the clause (iii) of first proviso to sub-section (5) of section 80G of the Act, the assessee-trust was required to file this present application in form 10AB on or before the extended time i.e. 30/09/2022 allowed by CBDT, vide circular No.8/2022, whereas it has been filed by the assessee on 17/11/2022. It is an admitted fact that the assessee, vide submission dated 03/03/2023, had submitted that it has commenced its activities from 25.08.2009, and the present application filed in Form No. 10AB, u/s 80G(5) of the Act has not been filed within the time limit prescribed therein and therefore, the same is liable to be rejected as such as non- maintainable. The Ld. CIT(E) also relied on the decision of the Hon'ble Kolkata Tribunal in the case of Bishnupur Public Education Institute, reported in 139 taxmann.com 121. Therefore, ld. CIT(A) rejected the assessee’s application in Form No. 10AB, u/s 80G(5) of the Act. 5. Aggrieved by the order of ld. CIT(E), assessee is in appeal before us. 6. Shri Darshak Thakkar, Learned Counsel for the assessee, argued that assessee has applied for final registration u/s 80G of the Act on 17 th Nov, 2022, which is within the six months from the date of the provisional certificate, which was taken by the assessee-trust on 1 st Sep, 2022. The ld. I.T.A No. 265/Rjt/2023 A.Y. 2022-23 The Old Rkcians Association vs. CIT (Exemption) 4 Counsel pointed out that since the date of provisional certificate is 1 st September, 2022 and the six months elapsed at the end of February, that is, on of 28 th February 2023, however, the assessee-trust has applied for final registration on 17 th Nov, 2022, which is before the six months. Therefore, assessee has made the compliance of clause (iii) of first proviso to section 80G(5) of the Act, therefore, ld. CIT(E) should have granted registration to the assessee. Therefore, direction may be given to the Ld CIT(E ) to grant the registration to the assessee in accordance with law. 7. On the other hand, Learned CIT- DR for the Revenue relied on the findings of the ld. CIT(E). 8. We have heard the Learned Counsels appearing on behalf of the respective parties at length. We note that assessee’s trust was registered on 25 th August, 2009, therefore, it was not possible for the assessee trust to apply for registration within six Months as per clause (iii) of 1 st proviso to section 80G(5) of the Income Tax Act, as the six Month has elapsed in assessee`s case in the Month of February 2010, and it is the prerogative of the assessee to apply for registration under section 80G(5) of the Act or not, that is, at that point of time it was not necessity for the assessee-trust to apply for registration under section 80G of the Act, the assessee- trust may decide to get the registered under section 80G(5) of the Act, at a later date. For more clarity, it is pertinent to reproduce clause (iii) of first proviso to section 80G of the Act, which states as follows: I.T.A No. 265/Rjt/2023 A.Y. 2022-23 The Old Rkcians Association vs. CIT (Exemption) 5 “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”. The above clause (iii) of first proviso to section 80G of the Act, is not applicable to the assessee-trust under consideration, so far “within six months of commencement of its activities, whichever is earlier” is concerned, because assessee’s trust was registered on 25 th August, 2009 and the six Month has elapsed in assessee`s case in the Month of February 2010, therefore, the above proviso creates unjustifiable hardship to the assessee. 9. However, we note that assessee-trust, under consideration, has applied for provisional registration certificate u/s 80G of the Act, on 1 st Sep., 2022, and as per above noted clause (iii) of first proviso to section 80G of the Act(supra), the assessee-trust has to apply for final registration, within six Months period from the date of 1 st Sep, 2022, and the Six months elapsed in the Month of February 2023, that is, on 28 th Feb, 2023, however, the assessee has applied for final registration on 17 th November, 2022 itself, that is, before the period of six Months. Therefore, the application filed by the assessee-trust in Form No. 10AB, u/s 80G(5) of the Act, is on time, hence, the findings of the Ld CIT(E ) is not correct. 10. Therefore, based on the above factual position, we note that assessee- trust is entitled for registration under section 80G(5) of the Act, provided the assessee- trust has fulfilled the other conditions of section 80G of the Act. Hence, we set -aside the order of the ld. CIT(E) and remit the issue back to the file of ld. CIT(E) to grant the registration to the assessee-trust in I.T.A No. 265/Rjt/2023 A.Y. 2022-23 The Old Rkcians Association vs. CIT (Exemption) 6 accordance with law. The assessee-trust is also directed to submit the relevant documents and evidences, as and when required by Ld CIT(E ), if any, to fulfill the conditions of obtaining registration u/s 80G(5) of the Act. 11. For statistical purposes, the appeal of the assessee is treated to be allowed, in above terms. Order pronounced in the open court on 27-05-2024 Sd/- Sd/- (DINESH MOHAN SINHA) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER Rajkot True Copy Dated: 27/05/2024 आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Rajkot 6. Guard file. By order/आदेश से, Assistant Registrar ITAT, Rajkot