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CBDT circular not extending the time limit to file final application u/s 80G(5)(iii) of new provisionally registered trusts is violative of the Constitution of India: Madras HC


Citation: Sri Nrisimha Priya Charitable Trust v. CBDT

Court: Madras High Court

Writ Petition No.: 27030 of 2023

Date of order: 2.4.2024


Brief facts


  • The Petitioner was a charitable trust formed for educational purposes on 9.9.2021 and commenced its activities on the same date.

  • It was granted provisional approval under section 80G(5) on 6.10.2021.

  • The assessee was required to file an application for final approval within six months of the commencement of its activities, that is, by 8.3.2022 [clause (iii) of first proviso to section 80G(5)]

  • CBDT issued Circular No.8 of 2022 dated 21.3.2022 extending the date for filing applications for regular registration/approval till 30.9.2022.

  • The petitioner did not apply for final approval within the extended time limit and finally filed the application in Form no. 10AB only on 22.3.2023.

  • CBDT further extended the timeline vide Circular No.6 of 2023 dated 24.5.2023 allowing the application for final registration only under section 10(23C) and section 12A to 30.9.2023, but did not extend the timeline for final approval under section 80G(5)(iii) for provisionally approved trusts.

  • Hence, the petitioner-trust filed a writ contending that the said Circular was discriminatory, arbitrary and ultra vires Article 14 of the Constitution.


Observations of the High Court


The High Court observed as follows:

  1. The petitioner trusts did not have a vested right to claim any extension of time. When the statute prescribes a time limit, the petitioner trusts are expected to apply within the said date to avail the benefit.

  2. No discrimination or differentiation was made between the existing trusts and the new trusts at the first instance when Circular No.8 of 2022 was issued.

  3. However, on a combined reading of both circulars and affidavits, no reason whatsoever was mentioned to omit only the new trusts applying for regular registration under section 80G(5).

  4. The omission of only new trusts in respect of section 80G(5) did not relate to the object sought to be achieved by the circular nor did it provide for any basis for such classification/discrimination.

Hence, the Madras High Court held that clause 5(ii) of Circular No. 6 of 2023 dated 24.5.2023 was arbitrary and ultra vires the Constitution of India. Accordingly, it directed CBDT to consider the application of the petitioner under section 80G and pass orders on merits within 6 months of receipt of the order.

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