The Kolkata bench of the Income Tax Appellate Tribunal ( ITAT ) held that the benefit of Section 80G of the Income Tax Act, 1961 cannot be denied due to technical errors that occurred in making the application because of the confusion and misunderstanding properly interpreting the relevant provision.
North Eastern Social Research Centre, the assessee applied for provisional approval under Clause (iv) to First Proviso to section 80G(5) and the same was granted by the CIT(Exemption) in Form 10AC, which was valid from June 28, 2022, to A.Y 2025-26.
The assessee applied for final approval under Clause (iii) to First Proviso to section 80G(5), which was rejected by the CIT( Exemption ) observing that the assessee had already commenced its activities even before the grant of provisional approval, and since the period for making application mentioned in Clause (iii) to First Proviso to section 80G(5) had already expired.
The Bench observed that the institutions which stood already approved under section 80G(5)(vi) on the date of Amendment brought to section 80G by Taxation and Other Laws have to re-apply for fresh registration under Clause (i) to the First Proviso to section 80G(5) and those institutions have to be granted approval for five years by the CIT(Exemption) without any enquiry.
The bench viewed that the prescribed date for final application for approval under Clause (i) to the First Proviso to section 80G(5) was stipulated as three months from 1st Day of April 2022, however, the CBDT from time to time extended the date for filing of the said application under Clause (i) to the First Proviso to section 80G(5) of the act.
It was found that the provisional approval has also been granted to the assessee-institution till the A.Y 2025-26, and therefore, the assessee-trust was not barred from making such an application for final approval.
The two-member Bench of Sanjay Garg ( Judicial Member ) and Rakesh Mishra ( Accountant Member ) held that if the assessee is granted final approval by the CIT(E) then, the benefit of approval under section 80G of the Act, available to the assessee before the Amendment brought vide Amending Act of 2020, will be deemed to be continued without any break.
While partly allowing the appeal, the ITAT directed the CIT(Exemption) to grant final approval to the assessee under Clause (iii) to First Proviso to section 80G(5), if the assessee is otherwise found eligible.
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