In its recent decision, the Calcutta High Court upheld a ruling by the Income Tax Appellate Tribunal (Tribunal) allowing an assessee to seek registration under section 80G(5)(iii) of the Income Tax Act, 1961 after the initiation of the activity.
The revenue department filed a petition under Section 260A of the Income Tax Act, 1961, disputing the Tribunal’s September 13, 2023 decision in favour of the respondent, West Bengal Welfare Society.
The appellant’s representative was Ms. Smita Das De, while Mr. Abhratosh Majumder appeared as the respondent/assessee. The central question revolved around the Tribunal’s justification in granting the assessee’s appeal and directing registration under Section 80G(5) of the Act, thereby setting aside the Commissioner of Income Tax’s order dated June 27, 2023.
The Tribunal remanded the matter to the C.I.T (Customs) for a revised decision on the application for registration under Section 12A of the Act. After such a remand on the authority, a 12-year registration has been granted by the respondent-assessee.
Taking into account Circular No.7 of 2024 issued by the Central Board of Direct Taxes on April 25, 2024, extending the deadline for filing Form 10A and 10AB of the Act, as per Clause 4.1 of the said Circular, a fresh application in Form No. 10AB may be furnished within the extended time given in paragraph 3(ii) i.e. 30.06.2024 in cases where any trust, institution or fund has duly done for an application in Form No. 10AB, and in cases where an order denying such application has been passed by the Principal Commissioner or Commissioner, or or prior releasing this Circular, merely on account of the reason that the application was furnished post the due date or that the application has been processed under the wrong section code.
The Tribunal determined that the taxpayer received provisional approval on November 30, 2022, and sought permanent registration under clause (iii) of the initial proviso to Section 80G(5) of the Act.
Consequently, the Tribunal interpreted the proviso to mean that following the provisional registration grant, if the taxpayer has not initiated activities, they can apply for registration within six months of starting operations or within six months before the provisional approval period ends, whichever comes first.
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In a review by the division bench of Chief Justice T.S. Sivagnanam and Justice Hiranmay Bhattacharyya, it was acknowledged that the Tribunal correctly emphasized that final registration could be sought by the assessee only after the provisional approval.
The Court dismissed the petition citing the absence of legal queries for consideration.
| Case Title | West Bengal Welfare Society Vs CIT |
| Citation | ITAT/77/2024 IA No: GA/2/2024 |
| Date | 26.04.2024 |
| Counsel For Appellant | Ms. Smita Das De, Adv |
| Counsel For Respondents | Mr Abhratosh Majumder, Mr Avra Mazumder, Mr Arvind Agarwal, Mr Giridhare Dhelia, Mr Kausheyo Roy, Ms Alisha Das, Mr Suman Bhowmick, Mr Samrat Das, Ms Elina Dey |
| Calcutta High Court | Read Order |
