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Issues involved: Challenge to order u/s 80G(5) of Income-tax Act, 1961 for renewal of certificate.
Summary: The petitioner, a public charitable trust, challenged an order passed by the Commissioner of Income-tax, Rajkot, refusing approval u/s 80G(5) for the financial year due to investments in non-approved institutions. The High Court directed a fresh consideration, but the respondent reiterated the earlier decision without fresh assessment. The court emphasized that eligibility for deduction should be based on the time of donation, not future assessments. The court ruled that contravention of section 11(5) should not be the sole factor in granting approval u/s 80G(5). The certificate is typically granted for a block period in advance to facilitate donations and ensure donors' tax benefits. Citing a previous decision, the court quashed the respondent's order and directed renewal of the certificate for the petitioner-trust. The judgment highlights the importance of considering the timing of donations and the purpose of the provision in determining eligibility for tax benefits under section 80G(5) of the Income-tax Act, 1961.
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