Technical Error In Making Application For Final Approval Is No Basis To Deny Benefit Of Sec 80G: Kolkata ITAT

Referring to the decision in case of Anudip Foundation for Social Welfare vs. CIT(Exemption), Kolkata – ITA No. 1341/Kol/2023, the Kolkata ITAT held that assessee will not be deprived of the benefit of Sec 80G due to technical errors occurred in making application because of the confusion and misunderstanding on in properly interpreting the relevant provision. Section 80G of Income tax Act deduction is a facility available which allows taxpayers to claim deductions for various contributions made as donations. The deduction under the Act is available for contributions to the specified relief funds and charitable institutions. The Bench of Sanjay Garg (Judicial Member) and Rakesh Mishra (Accountant Member) reiterated that “if the assessee is granted final approval by the CIT(E) then, the benefit of approval u/s 80G of the Act, available to the assessee prior to the Amendment brought vide Amending Act of 2020, will be deemed to be continued without any break”. Facts of the case: 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 thereafter 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 prior to grant of provisional approval, and since the time period for making application mentioned in Clause (iii) to First Proviso to section 80G(5) had already expired. Observations of the Tribunal: The Bench observed that the institutions which stood already approved u/s 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 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), added the Bench. The Bench further noted that the institutions which had to apply for the first time or the institutions which did not stand approved on the date of Amendment brought by the Taxation and Other Laws Act, 2020 they could apply under Clause (iv) of the First Proviso to section 80G(5). In the case at hand, the Bench 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 application for final approval. Hence, the ITAT partly allowed the Assessee's appeal and 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. Counsel for Appellant/ Assessee: Siddharth Agarwal Counsel for Respondent/ Revenue: Subhendu Datta, Case Title: North Eastern Social Research Centre verses CIT(Exemption) Case Number: I.T.A. No.741/Kol/2024 Click here to read/ download the Order

Technical Error In Making Application For Final Approval Is No Basis To Deny Benefit Of Sec 80G: Kolkata ITAT

Pankaj Bajpai

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