CHENNAI: The Madras High Court has struck down a part of a circular issued by the Central Board of Direct Taxes that denied extension of the time limit for submitting applications by newly established trusts for availing of income tax exemptions under 80 G of Income Tax Act, 1961.The order was passed by the first bench of Chief Justice SV Gangapurwala and Justice D Bharatha Chakravarthy on Tuesday on the petitions filed by the Sri Nrisimha Priya Charitable Trust.The petitioners had challenged the vires of clause 5 (ii) of the CBDT circular issued on May 24, 2023, as it discriminated against the newly established trusts in providing extension of time for submitting form 10 AB for tax exemption under 80 G of Income Tax Act.“Clause 5(ii) of Circular No.6 of the first respondent (CBDT) is declared as illegitimate, arbitrary, and that which ultra vires the Constitution of India,” the bench said in the order.It directed the CBDT and the Commissioner of Income Tax (Exemptions) to consider the applications submitted by the petitioners as to the recognition/approval in respect of clause (i) of the first proviso to sub-section 5 of section 80 G of the Act as submitted within the time and pass orders on merits within six months.
Source link
