Ananda Nagar Development Society, Kolkata V. CIT( Exemption), Kolkata

ITA 377/KOL/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 7288 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2024
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 25-02-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution

Judgement Text

आयकर अपीलȣय अͬधकरण, कोलकाता पीठ ‘बी’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH KOLKATA Before Shri Sanjay Garg, Judicial Member and Shri Sanjay Awasthi, Accountant Member I.T.A. No.377/Kol/2024 Ananda Nagar Development Society...........................................Appellant At 475, Gouranga Palli, VIP Nagar, Kasba-Tiljala, VIP Nagar S.O, South 24 Parganas, West Bengal, India-700100. [PAN:AABTA1419L] vs. CIT(Exemptions), Kolkata............................................................... Respondent Appearances by: Shri P. K. Ray and Ripan Halder, AR, appeared on behalf of the appellant. Shri Abhijit Kundu, CIT-DR, appeared on behalf of the Respondent. Date of concluding the hearing : May 09, 2024 Date of pronouncing the order : May 09, 2024 आदेश / ORDER संजय गग[, ÛयाǓयक सदèय ɮवारा / Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order dated 04.07.2023 of the Commissioner of Income Tax (Exemption), Kolkata [hereinafter referred to as ‘CIT(Exemption)’] rejecting the application of the assessee for final approval as per the provisions of section 80G(5)(iii) of the Income Tax Act (hereinafter referred to as the ‘Act’). 2. The ld. CIT(Exemptions) has rejected the application holding the same to be prima facie not maintainable being premature. The ld. CIT(Exemptions) observed that the assessee earlier was granted provisional registration in Form 10AC which was valid till A.Y 2026-27. He, therefore, held that the present application of the assessee being premature was not maintainable and rejected the same. Being I.T.A. No.377/Kol/2024 Ananda Nagar Development Society 2 aggrieved by the above order of the ld. CIT(Exemptions), the assessee has come in appeal before us. 3. We have heard the rival contentions and gone through the record. The assessee-trust has been granted registration under clause (iv) of the First Proviso to section 80G(5) of the Act vide order dated 28.05.2021 which is valid from A.Y 2022-23 to A.Y 2026-27. As per the provisions of clause (iii) of the First Proviso to section 80G(5) of the Act, the assessee-institution is supposed to apply for final registration after grant of provisional registration. The relevant part of the provisions of section 80G(5) of the Act are reproduced as under: “80G(5) This section applies to donations to any institution or fund referred to in sub-clause (iv) of clause (a) of sub-section (2), only if it is established in India for a charitable purpose and if it fulfils the following conditions, namely:- ***** [(vi) in relation to donations made after the 31 st day of March, 1992, the institution or fund is for the time being [approved by the Principal Commissioner or Commissioner;] ***** Provided that the institution or fund referred to in clause (vi) shall make an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for grant of approval,— (i) where the institution or fund is approved under clause (vi) (as it stood immediately before its amendment by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020), within three months from the 1st day of April, 2021; (ii) where the institution or fund is approved and the period of such approval is due to expire, at least six months prior to expiry of the said period; (iii) 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; I.T.A. No.377/Kol/2024 Ananda Nagar Development Society 3 (iv) in any other case, at least one month prior to commencement of the previous year relevant to the assessment year from which the said approval is sought: (Emphasis supplied by us) Provided further that the Principal Commissioner or Commissioner, on receipt of an application made under the first proviso, shall,— (i) where the application is made under clause (i) of the said proviso, pass an order in writing granting it approval for a period of five years; (ii) where the application is made under clause (ii) or clause (iii) of the said proviso,— (a) call for such documents or information from it or make such inquiries as he thinks necessary in order to satisfy himself about— (A) the genuineness of activities of such institution or fund; and (B) the fulfilment of all the conditions laid down in clauses (i) to (v); (b) after satisfying himself about the genuineness of activities under item (A), and the fulfilment of all the conditions under item (B), of sub-clause (a),— (A) pass an order in writing granting it approval for a period of five years; or” Provided also that the approval granted under the second proviso shall apply to an institution or fund, where the application is made under— (a) clause (i) of the first proviso, from the assessment year from which approval was earlier granted to such institution or fund; (b) clause (iii) of the first proviso, from the first of the assessment years for which such institution or fund was provisionally approved; (c) in any other case, from the assessment year immediately following the financial year in which such application is made. 4. A perusal of the aforesaid clause (iii) of the First Proviso to section 80G(5) of the Act would reveal that where the trust or the institution was provisionally registered under clause (iv) of the First Proviso to section 80G(5) of the Act, the application for final registration can be made at least six months prior to the expiry of the period of provisional registration or within six months of the commencement of its activity, I.T.A. No.377/Kol/2024 Ananda Nagar Development Society 4 whichever is earlier, which means that the application for final registration has to be made at the earliest possible event i.e. either within six months of the commencement of the activities or at least six months prior to the expiry of the provisional registration. The aforesaid provision does not mean that there is any bar on the applicant to move an application before the period of six months from the expiry of the provisional registration. What has been provided is that the application must be made before the expiry of six months from the date of expiry of final registration. There is no bar in moving the application at the earliest possible event, rather, it is expected from the assessee-trust to do so. In view of this, the impugned order of the ld. CIT(Exemptions) is set aside and the matter is restored to the ld. CIT(Exemptions) to consider the application of the assessee for final registration and grant the same if the same is otherwise so admissible to the assessee. 5. With the above observations, the appeals of the assessee is treated allowed for statistical purposes. Kolkata, the 9 th May, 2024. Sd/- Sd/- [Sanjay Awasthi] [Sanjay Garg] लेखा सदèय/Accountant Member ÛयाǓयक सदèय/Judicial Member Dated: 09.05.2024. RS Copy of the order forwarded to: 1. Ananda Nagar Development Society 2. CIT(Exemptions), Kolkata 3.CIT (A)- 4. CIT- , 5. CIT(DR), I.T.A. No.377/Kol/2024 Ananda Nagar Development Society 5 //True copy// By order Assistant Registrar, Kolkata Benches