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2014 (10) TMI 828 - AT - Income TaxRenewal of exemption under section 80G denied - assessee submitted that the trust was registered with the sub-registrar (Revenue) as a trust and trust was also registered under the Societies Registration Act, 1860 and also was granted registration under section 12AA(1)(b)(i) - Held that - It is not in dispute that assessee-trust is already granted registration under section 12AA of the Act which continues in favour of the assessee. It is also not in dispute that approval under section 80G(5) was granted to the assessee vide order dated December 1, 2006 for the assessment years 2007-08 to 2008-09. The same was extended for the assessment years 2009-10, 2010-11 and 2011-12 vide order dated September 9/11, 2008. As decided in CIT v. Shri Vishav Namdhari Sangat 2013 (2) TMI 294 - PUNJAB & HARYANA HIGH COURT need not to make a request for extension of the approval under section 80G of the Act. The same would have been continued and could have been withdrawn by the learned Commissioner of Income-tax only in accordance with law. However, in this case, as is seen, CIT(A) has not exercised any power for withdrawal of the approval already granted under section 80G(5) of the Income-tax Act in the case of the assessee and merely on the application of the assessee for renewal of exemption under section 80G passed the impugned order. This reason itself is sufficient to set aside and quash the impugned order. - Decided in favour of assessee.
Issues involved:
1. Rejection of renewal of exemption under section 80G of the Income-tax Act, 1961 by the Commissioner of Income-tax-I, Ludhiana. Detailed Analysis: 1. The appeal was against the rejection of renewal of exemption under section 80G of the Income-tax Act, 1961 by the Commissioner of Income-tax-I, Ludhiana. The grounds for rejection included errors in considering the trust's registration status and changes in trustees, as well as the application of trust property to its stated objects. The Commissioner concluded that the trust did not fulfill the conditions for renewal of exemption under section 80G(5) based on these grounds. 2. The facts revealed that the assessee-trust was established in 1996 and had been granted registration under section 12A and section 80G of the Income-tax Act. Despite providing necessary information and documents, the Commissioner raised concerns about the trust's registration under the Societies Registration Act, 1860, changes in trustees, and capital expenditure exceeding 80 percent. The Commissioner's decision to reject the renewal application was based on these findings. 3. The counsel for the assessee argued that there were no changes in the trust's objectives or circumstances warranting rejection of the renewal. They cited previous approvals under section 12A and section 80G, emphasizing that the approval under section 80G(5) should continue unless revoked following due process. Legal precedents were cited to support the argument that the approval should not be withdrawn without proper procedure. 4. The Departmental representative supported the Commissioner's decision to withdraw the approval under section 80G(5) based on the general power provided under section 293C of the Act. 5. The Tribunal noted that the approval under section 80G(5) had been granted to the assessee for specific assessment years and extended subsequently. Referring to a judgment by the Punjab and Haryana High Court, it was established that the approval under section 80G(5) should not be withdrawn without following due process, including issuing a show-cause notice. 6. In light of the legal precedents and the absence of due process in withdrawing the approval, the Tribunal set aside the Commissioner's decision to reject the renewal application. It was emphasized that the approval should have continued unless revoked following proper legal procedures. The Tribunal directed the Commissioner to continue with the approval under section 80G(5) in accordance with the law for the assessee. This detailed analysis provides a comprehensive understanding of the judgment regarding the rejection of renewal of exemption under section 80G of the Income-tax Act, 1961.
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