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Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGHAND SHRI MANOJ KUMAR AGGARWAL
आदेश /O R D E R
PER MAHAVIR SINGH, VICE PRESIDENT:
This appeal by the assessee is arising out of the of the order passed by PCIT (Exemption), Chennai u/s.80G(5)(vi) of the Income Tax Act, 1961 (hereinafter the ‘Act’).
The only grievance of the assessee is that the PCIT has erred in approving the Trust u/s.80G(5) w.e.f. 23.09.2021 only as against it should have been from 01.04.2021 in term of sixth proviso to section 80G(5) of the Act. For this, assessee has raised the following two grounds:- “1. The order of the Principal Commissioner of Income Tax (hereinafter referred to as PCIT) is contrary to the law, facts and circumstances of the case. 2. The PCIT erred in holding that the provisional approval under Section 80G(5) is applicable only from 23/09/2021 as against the date 01/04/2021 as per fourth proviso to Section 80G(5).
We have heard rival contentions and gone through facts and circumstances of the case. Brief facts are that the assessee is a public charitable trust constituted vide trust deed dated 12.12.2018 and got registered u/s.12AA of the Act vide order dated 25.11.2019. The assessee filed application in Form 10A for re-registration of trust u/s.12AB of the Act on 05.08.2021. The assessee was given registration u/s.12A from assessment year 2022-23 to 2025-26 vide order dated 23.09.2021. The assessee also filed an application in Form No.10A for provisional approval as per clause (iv) of first proviso to section 80G(5) of the Act. This application was dealt by PCIT (Exemption) and issued registration in Form No.10AC vide provisional approval dated 23.09.2021 and for & from assessment
3 years for which trust institution is provisionally approved was 23.09.2021 to assessment year 2024-25. The relevant order given by PCIT in clause 8 & 9 of Form 10AC reads as under:-
Assessment year or years for which the 8 trust or institution is provisionally From 23-09-2021 to AY 2024-25 approved 9 Order for Provisional approval: a. After considering the application of the applicant and the material available on record, the applicant is hereby granted provisional approval with effect from the assessment year mentioned at serial no 8 above subject to the conditions mentioned in row number 10. b. The taxability, or otherwise, of the income of the applicant would be separately considered as per the provisions of the Income Tax Act, 1961. c. This order is liable to be withdrawn by the prescribed authority if it is subsequently found that the activities of the applicant are not genuine or if they are not carried out in accordance with all or any other conditions subject to which it is granted, if it is found that the applicant has obtained the provisional approval by fraud or misrepresentation of facts or it is found that the assessee has violated any condition prescribed in the Income Tax Act, 1961.
Aggrieved against approval by PCIT from 23.09.2021 instead of granting approval from 01.04.2021, the assessee came in appeal before the Tribunal.
Before us, the ld.counsel for the assessee referred to first proviso to clause (iv) to section 80G(5) which reads as under:-
4 “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;
(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:
4.1 The ld.counsel then took us through the second proviso to section 80G(5), which prescribes the procedure to be followed by the PCIT(Exemption) on receipt of an application made under first proviso to section 80G(5) of the Act. The relevant procedure is prescribed in the fourth & fifth proviso to section 80G(5) of the Act. According to ld.counsel, the assessee filed application under first proviso to section 80G(5) of the Act on 12.08.2021 and it was accepted and approval was granted vide order dated 23.09.2021 w.e.f. 23.09.2021 instated of 01.04.2021. The ld.counsel for the assessee took us through the sixth proviso to section 80G(5) of the Act, which reads as 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 (ii) 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. As per this proviso, the ld.counsel stated that the approval should have been w.e.f. 01.04.2021 and not from 23.09.2021. When this was confronted to ld. CIT-DR, he stated that the assessee made application from that date and from that date only, approval is to be granted.
After hearing rival contentions and going through the relevant proviso (vi) of section 80G(5) of the Act, which clearly provides that the registration is to be granted from the first of the assessment years for which such institution or fund was provisionally approved i.e., from the assessment year and not from the mid of the year. It means that the assessee is entitled for approval w.e.f. 01.04.2021 and not from 23.09.2021. The provisions of the acts are clear and there is no ambiguity about it. Hence, we direct the PCIT to carry
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on 19th October, 2022 at Chennai.