Registration cannot be revoked if full registration was filed after 6-month period from provisional registration, due to change in law: ITAT

Citation- Income-tax Bar Association Calcutta v. CIT (Exemption)

ITAT: Kolkata

ITA no: 205 of 2024

Assessment Year: not specified

Date of Order- June 11, 2024

Brief Facts:

• The assessee was a bar association established in 1924. It had received provisional registration and had applied for regular registration under section 80G(iii).

• The CIT observed that provisions of section 80G(5)(iii) required the assessee to apply for regular registration within six months prior to expiry of provisional registration or within six months after commencement of activities, whichever is earlier.

• The CIT rejected the application on the ground that it was not maintainable since the application for regular registration had been made after six months of commencement of activities. Hence, the application had been made beyond the prescribed time limit.

• He further cancelled the provisional registration that had been granted to the assessee.

Observations of the Tribunal

The Tribunal made the following observations-

1. The assessee had already been granted registration under the old regime.  On perusal of the amendments in Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 revealed that the institutions which had applied under clause (i) of first proviso to section 80G(5) had to be granted provisional registration for five years without any enquiry.

2. The assessee had specifically pleaded its original application should have been granted under section 80G(5)(iii) and not under section 80G(5)(iv). At that time, the CIT should have granted the regular registration instead of granting provisional. Even if the provisional registration was granted, then, the CIT ought to have appreciated that the time limit for making such application has also been extended time to time by the CBDT.

3. The procedure adopted by the CIT(Exemption) to grant provisional certificate to the assessee at the first stage and then, for denying the regular certificate under section 80G(5)(iii) was incorrect.

4. The time limit to make an application for grant of regular registration under section 80G(5)(iii) in Form No. 10AB was available to the assessee up to the end of June, 2024.

Hence, the Tribunal directed the CIT(E) to grant the assessee regular registration under 80G(5)(iii).