SHREE LAXMINARAYAN EDUCATION AND CHARITABLE TRUST,AHMEADABAD vs. THE CTI(EXEMPTION), AHMEDABAD

The instant appeal filed by the assessee is directed against the order dated 06.11.2023 passed by the Ld. Commissioner of Income Tax (Exemption), Ahmedabad under Section 80G(5) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).

“1. The order passed by CIT (Exemption) is bad in law and required to be quashed.

2. Ld. CIT (Exemption) erred in rejecting application for registration by observing that trust was provisionally registered under clause (iv) of first proviso to section 80G(5) and accordingly, impugned application was required to made under clause (iii) of first proviso instead of clause (ii) of first proviso.

3. Ld. CIT (Exemption) ought to have considered the fact that filing an application under wrong clause of proviso does not alter the objects or activities of trust and its procedural error or technical error and accordingly he ought to have granted registration.

Shree Laxminarayan Education And Charitable Trust vs. CIT(E) Asst.Year – N.A. - 2 - 4. Ld. CIT(Exemption) ought to have considered the fact that procedural or technical error does not take away fundamental rights which are otherwise available to the applicant.”

“6. So far as the observation of the ld. CIT(E) that the assessee had already commenced its activities since long 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 and therefore, the application of the assessee for final registration was timebarred, is concerned, we note that the issue has already been discussed and adjudicated by the Coordinate Bench of the Tribunal in the case of West Bengal Welfare Society vs. CIT (Exemption), Kolkata in & 731/Kol/2023 vide order dated 13.09.2023, wherein, it has been held that the assessee, who has been granted provisional registration, is eligible to apply for final registration irrespective of the fact that the assessee had already commenced its activity even prior to the date of grant of provisional approval. The relevant part of the order of the Coordinate Bench is reproduced as under: 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 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 on the part of the assessee in filing application in the prescribed form for grant of final registration under Clause (iii) of 1st Proviso to section 80G(5) of the Act. 6.1. In view of the above observations, the matter is restored the file of the CIT(E) for decision afresh in the light of the observations made above.

Shree Laxminarayan Education And Charitable Trust vs. CIT(E) Asst.Year – N.A. - 4 - 7. In the result, appeal filed by the assessee is treated as allowed for statistical purposes.”