West Bengal Welfare Society , Kolkata V. CIT(EXEMPTION),KOLKATA, Kolkata

ITA 730/KOL/2023

AI Insights

The West Bengal Welfare Society appealed against the orders of the Commissioner of Income Tax (Exemption), Kolkata, which had rejected their applications for final registration as a charitable institution under section 12A(1)(ac)(iii) and for section 80G of the Income Tax Act. The Tribunal noted that the assessee was not properly notified about the hearing and thus did not have an adequate opportunity to present their case. Additionally, the Tribunal found that the CIT(E) had misconstrued the provisions regarding the timing of the application for final registration under section 80G, leading to a decision that the application was time-barred. The Tribunal restored both matters to the CIT(E) for a fresh decision, emphasizing the need for proper procedural adherence.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 128216 (ITAT-KOLKATA)
• Duration Of Justice: 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Next Hearing Date: 03-09-2023
• Assessment Year: misc
• Appeal Filed On: 19-07-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 80G; 12A

Judgement Text

आयकर अपीलȣय अͬधकरण, कोलकाता पीठ ‘ए’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH KOLKATA Įी संजय गग[, ÛयाǓयक सदèय एवं Įी मनीष बोरड, लेखा सदèय के सम¢ Before Shri Sanjay Garg, Judicial Member and Dr. Manish Borad, Accountant Member I.T.A Nos.730&731/Kol/2023 Assessment year: 2023-24 West Bengal Welfare Society............................................................Appellant 13, Pathuria Ghat Street, Kolkata – 700006. [PAN: AAATW1117A] vs. CIT(Exemption), Kolkata................................................................Respondent Appearances by: Shri Giridhar Dhelia, AR, appeared on behalf of the appellant. Shri S. Datta, CIT- Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing : September 04, 2023 Date of pronouncing the order : September 13, 2023 आदेश / ORDER संजय गग[, ÛयाǓयक सदèय ɮवारा / Per Sanjay Garg, Judicial Member: The captioned appeals have been preferred by the assessee against the separate orders both dated 27.06.2023 of Commissioner of Income Tax (Exemption), Kolkata (hereinafter referred to as the ‘CIT(E)’). ITA No.730/Kol/2023 has been preferred agitating against the rejection of the application of the assessee for final registration u/s 12A(1)(ac)(iii) of the Income Tax Act (hereinafter referred to as the ‘Act’) as a charitable institution, whereas, vide ITA No.731/Kol/2023, the assessee has contested the rejection of application for final registration u/s 80G of the Act. 2. At the outset, the ld. counsel for the assessee has invited our attention to the order dated 27.06.2023 of the ld. CIT(E) passed in I.T.A Nos.730&731/Kol/2023 Assessment year: 2023-24 West Bengal Welfare Society 2 relation to the application of the assessee for grant of final registration u/s 12AA/12A(1)(ac)(iii) of the Act to submit that the same is an ex parte order. The ld. counsel has submitted that as per the order of the ld. CIT(E), notice of hearing was issued to the assessee vide letter dated 16.06.2023 fixing the hearing for 21.06.2023. However, the assessee did not receive any communication regarding hearing from the CIT(E). The ld. counsel has submitted that the assessee has already been granted provisional registration u/s 12A of the Act. That the assessee has not given proper and adequate opportunity by the ld. CIT(E) to present its case. 3. The ld. DR, on the other hand, has relied upon the impugned order of the ld. CIT(E). 4. We have heard the rival contentions and gone through the record. We find that only a single opportunity has given by the ld. CIT(E) to the assessee to present its case. The time period of issue of notice/letter and the date of fixing of hearing was very short. The proper opportunity in this case has not been granted by the ld. CIT(E) to the assessee. In view of this, the impugned order of the CIT(E) is set aside and the matter is restored to the file of the CIT(E) for decision afresh on the application of assessee for final registration u/s 12AA/12A(1)(ac)(iii) of the Act. 5. Now, coming to the assessee’s appeal ITA No.731/Kol/2023 for final registration u/s 80G of the Act. The assessee was granted provisional approval under Clause (iv) of first proviso to section 80G(5) of the Act on 30.11.2022. Thereafter, the assessee applied for final approval Clause (iii) of first proviso to section 80G(5) of the Act on 03.12.2022. The ld. CIT(E) however, referred to the said clause (iii) of proviso to section 80G(5) of the Act, which reads as under: I.T.A Nos.730&731/Kol/2023 Assessment year: 2023-24 West Bengal Welfare Society 3 (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.” The ld. CIT(E) concluded from the above proviso that the assessee has already commenced its activities in the financial year 2020-21 and that as per Clause (iii) of 1 st Proviso to section 80G(5) of the Act, the application for final registration was to be filed within six months from the commencement of its activities. He, therefore, held that the application of the assessee for final registration was time-barred. 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 1 st 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 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 1 st 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. In the result, both the appeals of the assessee are treated as allowed for statistical purposes. Kolkata, the 13 th September, 2023. Sd/- Sd/- [डॉÈटर मनीष बोरड /Dr. Manish Borad] [संजय गग[ /Sanjay Garg] लेखा सदèय /Accountant Member ÛयाǓयक सदèय /Judicial Member Dated: 13.09.2023. RS Copy of the order forwarded to: 1. West Bengal Welfare Society 2. CIT(Exemption), Kolkata 3. CIT(A)- 4. CIT- , 5. CIT(DR), //True copy// By order Assistant Registrar, Kolkata Benches