WEST BENGAL WELFARE SOCIETY,KOLKATA vs. CIT(EXEMPTION), KOLKATA, KOLKATA

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 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.

The ld. DR, on the other hand, has relied upon the impugned order of the ld. CIT(E).

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.

Now, coming to the assessee’s appeal 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 (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 1st 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.

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 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 Assessment year: 2023-24 West Bengal Welfare Society