SRI SANKARAHEALTH CENTRE,VELLORE vs. CIT-EXEMPTIONS, CHENNAI

आदेश / O R D E R

PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee Trust against the order

of the Learned Commissioner of Income Tax (Exemptions) (hereinafter in

short "the Ld.CIT(E)”), Chennai, rejecting the application dated

14.09.2023 seeking approval under clause (iii) of the first proviso to sub-

sec.5 of sec.80G of the Income Tax Act, 1961 (hereinafter in short "the

Act”).

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assessee is an old Trust of 1972 and was enjoying registration u/s.12A of

the Act and didn’t apply for grant of appeal u/s.80G before the year 2021.

According to the Ld.AR, the assessee had applied for provisional approval

u/s.80G(5)(iv) of the Act on 29.08.2021 and was granted provisional

approval on 24.09.2021 till AY 2024-25; And thereafter, assessee applied

for regular approval in Form No.10AB clause (iii) of the first proviso to

sub-sec.5 of sec.80G of the Act for five years on 14.09.2023. And the

Ld.CIT(E) taking note that assessee had commenced its activities in the

year 1972 and didn’t file Form No.10AB u/s.80G(5)(iii) of the Act within

the time limit prescribed therein (i.e. six months from the date of

commencement), therefore, he was pleased to dismiss the appeal.

submitted that new set of procedure for approval u/s.80G(5) of the Act

has been inserted by TOLA-2020 [Taxation and other laws (Relaxation &

Amendment of Certain Provision) Act, 2020] and is applicable w.e.f.

01.04.2021 onwards; and the requirement to file the ibid application

within six months of commencement of activities has been inserted w.e.f.

01.04.2021. And since, the assessee was created in the year 1972,

according to the Ld.AR, it was impossible for the assessee to have filed

the application under clause (iii) of sec.80G(5) of the Act and cited the

maxim "lex non cogit ad impossibilia" which means that the, Law does not

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compel a person to do what is impossible; and therefore, the impugned

action of Ld CIT(E) is arbitrary and bad in law and pointed out that this

principle that the, Law does not compel a person to do what is impossible

has been recognized by the Hon’ble Apex Court and followed in the

following cases;-

o Presidential Poll vs Unknown on 5 June, 1974, (1974) 2 SCC 33.

o Life Insurance Corp Ltd. v. CIT (1996) 219 ITR 410 (SC) o State of Rajasthan v. Shamsher Singh 1985 AIR 1082 [SC] o State of MP Vs. Narmada Bachao Andolan (2011) 7 SCC 639 o Krishnaswamy S. PD. v. Union of India [2006] 281 ITR 305 (SC) o CIT V. Revathi Equipment Ltd. (2008) 298 ITR 67 (Mad) o Emperor v. Ganpat Laxman Kalgutkar, AIR 1938 Bom 427 4. We note that the assessee Trust filed an application in Form

No.10AB on 19.04.2023 seeking regular approval for five (5) years under

clause (iii) of first proviso to sub-section (5) of Sec.80G of the Act. The

Ld.CIT(E) while processing the application noticed that the date of

creation of the Trust was shown as 24.09.2021 (but he noticed also that

assessee commenced its activities in the year 1972); and that it had been

granted provisional approval in Form No.10AC on 24.09.2021

u/s.80G(5)(iv) of the Act, for period commencing from 24.09.2021 to AY

2024-25. The Ld.CIT(E) rejected the application by taking note of the

fact that the assessee had commenced its activities in 1972; and that the

application has been preferred by assessee not in accordance to statute,

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i.e, as per the time-line given as per the first proviso to sub-section (5) of

Sec.80G of the Act, and more particularly, sub-clause (iii) [reproduced as

under]:-

"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) ….. (ii) ….. (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) ….

approved u/s. 80G(5)(iv) of the Act and therefore, the assessee was

required to file application in Form No.10AB u/s 80G(5) (ii) of the Act at

least six months prior to expiry of period of the provisional approval or

within six months of commencement of its activities, whichever is

earlier. According to him, the time line prescribed therein is mandatory

and the Commissioner of Income Tax has no power to condone the delay

in filing application Form No. 10AB. According to him, in the present

case, since, the date of commencement of its activities in 1972 and date

of filing application in Form 10AB was 14.09.2023, which is after the

expiry of six months of commencement of its activities, therefore, he held

that the assessee’s application filed on 14.09.2023 in Form No.10AB

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u/s.80G(5)(iii) of the Act, was non-maintainable and he rejected it; and

went a step further and cancelled the earlier provisional approval granted

up to AY 2024-25 and aggrieved the assessee is in appeal before this

Tribunal.

commenced its activities immediately thereafter in the year 1972. And

that the assessee had been granted provisional approval in Form No.10AC

from 24.09.2021 u/s.80G(5)(iv) of the Act, for the period commencing

from that date to AY 2024-25. Thereafter, the assessee had filed the ibid

application u/s.10AB of the Act, on 14.09.2023 seeking approval under

Clause (iii) of first proviso to sub-sec.(5) of Sec.80G of the Act, which has

been rejected (as well as earlier approval cancelled) citing the reason that

the assessee failed to file the ibid application within the time prescribed

under Clause (iii) of first proviso to sub-sec.(5) of Sec.80G of the Act

(supra) or even within the extended timeline given by the CBDT Circulars

as under:

Sl.No. CBDT Circular Extension Up to 1 No. 12 of 2021 dated 25-06-2021 31-08-2021 2 No. 16 of 2021 dated 29-08-2021 31-03-2022 3 No. 08 of 2022 dated 31-03-2022 30-09-2022

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Circular No.6 of 2023 dated 24.05.2023, extending the due date for filing

the applications in Form 10AB from 30.09.2022 to 30.09.2023 only in

respect of trusts/institutions approved u/s.10(23C) and registered

u/s.12AB of the Act. However, since, the said Circular did not mention

any such extension of due date for filing Form No.10AB to get approval

u/s.80G of the Act, he rejected the application filed on 14.09.2023as non-

maintainable and also cancelled the provisional approval granted earlier

on 24.09.2021 up to AY 2024-25.

two reasons, one is that assessee society was registered in November,

1972 and enjoyed sec.12A registration and commenced its activities also

from 1972 onwards. It is undisputed that assessee had for first time

applied for grant of provisional approval u/s.80G of the Act only on

29.08.2021 and was granted by CPC from 24.09.2021 to Ay 2024-25.

Thereafter, assessee had applied for regular approval for five years and

filed application for approval in Form 10AB under clause (iii) of first

proviso to sec.80G(5) of the Act, which the Ld.CIT(E) has rejected citing

the reason that assessee didn’t file the application for approval within six

months of commencement of activities as provided for under clause (iii)

of provision of sec.80G(5) (supra), which in this case is impossible,

because, then assessee ought to have filed the application in the year

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1973 and the new set of procedure for approval of sec.80G came in the

statute only w.e.f.01.04.2021. The whole confusion is because in clause

(iii) of sec.80G(5) (supra), there are two time-limits given, the first one

gives time line/limit of six months to apply for approval prior to expiry of

provisional approval; and second time-limit, gives time limit of six months

from commencement of its activities; and out of the two limits given

(supra) clause (iii) requires the assessee to apply “whichever is earlier”;

this expression “whichever is earlier” has prompted the Ld.CIT(E) to take

a view that assessee ought to have filed application under second time-

limit of clause (iii), because it commenced its activities in 1972 (which

was an earlier event) when compared with the first limb of clause (iii)

which is an event well within time. But, the Ld.CIT(E) without going into

merits of application, has mechanically rejected the ibid application as not

maintainable and cancelled the earlier provisional approval also, which

action cannot be accepted because assessee cannot be asked to perform

an impossible act, when admittedly the requirement of law only came

w.e.f. 01.04.2021 and assessee cannot be expected to file application

within six months of commenced its activities, which event falls in the

year 1972. In such situation, Rule of harmonious interpretation should be

resorted to as held by Hon’ble Apex Court in Sultana Begumv. Prem

Chand Jain (1997) 1 SCC 373 = AIR 1997 SC 1006, wherein it was

observed that this rule [Rule of harmonious interpretation] helps in

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avoiding any inconsistency either with a section or between two different

sections or provisions of the same statute. After enumerating various case

law where the rule was adopted, Hon’ble Supreme Court summarized

principles as follows - (1) It is the duty of the courts to avoid a head on

clash between two sections of the Act and to construe the provisions

which appear to be in conflict with each other in such a manner as to

harmonize them (2) The provisions of one section of a statute cannot be

used to defeat the other provisions, unless the court, in spite of its

efforts, finds it impossible to effect reconciliation between them. (3) When

there are two conflicting provisions in an Act, which cannot be reconciled

with each other, they should be so interpreted that, if possible, effect

should be given to both. This is essence of rule of harmonious

construction. (4) An interpretation which reduces one of the provisions as

a 'dead letter' or 'useless lumber' is not harmonious construction (5) To

harmonize is not to destroy any statutory provision or to render it otiose.

B. And to avoid absurd results - Maxwell has stated – ‘If the language

is capable of more than one interpretation, we ought to discard the more

natural meaning if it leads to unreasonable result, and adopt the

interpretation which leads to a reasonable practical result’. - quoted with

approval in Sachinda Nand Singh v. State of Bihar 1998(1) SCALE 307.

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C. In Narashimha Murthy v. Susheelabai - (1996) 3 SCC 644 = AIR

1996 SC 1826, it was observed that purpose of law is to meet out justice;

in other words to prevent injustice or miscarriage of justice. The

interpretation should be consistent with justice, equity and good

conscience.

Act, is that the assessee for getting approval for five years was required

to file application in Form No.10AB u/s 80G(5) (ii) of the Act at least six

months prior to expiry of period of the provisional approval or within six

months of commencement of its activities, whichever is earlier. Therefore,

in the facts of the case, it is noted that the assessee was granted

provisional approval on 24.09.2021 till AY 2024-25 and therefore, the

time-line as per the first limb of clause (iii) of sec.80G(v) of the Act, the

assessee ought to have filed the ibid application at least six months prior

to expiry of the provisional approval i.e. before June, 2024 or as per the

time line given in second limb i.e. within six months of the

commencement of the activities, which event in this case was in the year

1972. And since, the assessee was supposed to have filed the application

whichever falls earlier in this case, obviously, it had to file the application

within six months of the commencement of the activities meaning in the

year 1972, which is an impossible task. In such a scenario, the Ld CIT(E)

ought not to have insisted that assessee should have filed the application

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in question within six months of commencement of its activities. In the

aforesaid circumstances, by applying Rule of harmonious interpretation,

firstly we should ignore the time line given in the second limb and the

Ld.CIT(E) ought to have seen whether the assessee satisfies the time line

given in the first limb of clause (iii) of sec.80G(5) of the Act, which will be

ideal/pragmatic/practical/appropriate, i.e, whether assessee filed

application in Form No.10AB u/s 80G(5) (ii) of the Act at least six months

prior to expiry of period of the provisional approval/extended time given

by CBDT; and we find that in a plethora of cases, this Tribunal has held

that the extended time limit of 30.09.2023 as per CBDT Circular would

apply to Form 10AB as well. We also take note of the decision of the

Hon’ble jurisdictional High Court in the case of Narasimha Priya Charitable

Trust in WP No.27030 & Others of 2024 dated 02.04.2024 wherein their

Lordships held that Clause 5(ii) of Circular No.6 of 2022 dated 24.05.2023

is illegitimate arbitrary and ultra vires the Constitution of India. We also

take note of the recent Circular No.07/2024 issued by CBDT dated

25.04.2024 extending the time limit of all such application to 30.06.2024.

therefore, we are of the opinion that the Ld.CIT(E) ought not to have

rejected the assessee’s application filed in Form No.10AB on 14.09.2023

only for technical reasons; and therefore, we set-aside the impugned

order of Ld CIT(E) and direct him to consider the application of the

assessee Trust dated 14.09.2023 filed in Form 10AB submitted by it for

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approval / recognition / registration under Clause (iii) of the first proviso

to sub-sec.(5) of Sec.80G of the Act as within time and after considering

the same afresh, pass orders thereon merits in accordance to law. The

application of the assessee dated 14.09.2023 is restored back to the file

of the Ld.CIT(E) for passing orders on merits.

purposes.

Order pronounced on the 10th day of July, 2024, in Chennai.

Sd/- Sd/- (मनोज कुमार अ�वाल) (एबी टी. वक�) (MANOJ KUMAR AGGARWAL) (ABY T. VARKEY) लेखा सद�य/ACCOUNTANT MEMBER �याियक सद�य/JUDICIAL MEMBER

चे�ई/Chennai, �दनांक/Dated: 10th July, 2024. TLN, Sr.PS आदेश क� �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF