2007 (8) TMI 303 - HC - Income Tax

Donation of immovable property - petitioner had claimed one half (50%) remission of stamp duty leviable on the above transaction of Gift in view of the G.O.M.s.No.1224/Revenue dated 25.4.1964 read with G.O.Ms.No.224/Commercial Taxes (J1)/dated 11.12.2003, and also in view of the approval u/s 80G since petitioner is approved u/s 80G and application for renewal of approval is also pending, petitioner claim is justified petitioner is entitled to remission of stamp duty

Summary

Issues:
1. Validity of notice issued by the second respondent demanding stamp duty.
2. Claim for remission of stamp duty on a gift deed by a Charitable Trust.
3. Interpretation of G.O.Ms.No.1224/Revenue dated 25.4.1964 and G.O.Ms.No.224/Commercial Taxes (J1) dated 11.12.2003.
4. Impact of approval under Section 80G of the Income Tax Act on stamp duty remission.

Analysis:
The petitioner, a Charitable Trust, sought a writ to quash a notice demanding stamp duty issued by the second respondent and to return a gift deed. The trust was registered under Section 12AA of the Income Tax Act and approved under Section 80G. The petitioner claimed 50% remission of stamp duty on a gift deed based on G.O.Ms.No.1224/Revenue and G.O.Ms.No.224/Commercial Taxes. The notice demanded additional stamp duty due to the approval under Section 80G being granted post-registration. The court found the notice erroneous as the approval was applied for before the deed registration, and the renewal was valid from an earlier date. The court held the notice invalid and ordered in favor of the petitioner.

The G.O.Ms.No.1224/Revenue dated 25.4.1964 provides a 50% stamp duty reduction for gifts for charitable or religious purposes for approved societies or trusts under Section 80G of the Income Tax Act. The trust had approval under Section 80G from a date preceding the gift deed registration. The court emphasized that the approval was valid for the relevant period, and the notice demanding additional stamp duty post-approval was unjustified. The court highlighted the importance of meeting the conditions of the G.O. for stamp duty remission and the significance of the approval date under Section 80G.

The court analyzed the timeline of approval under Section 80G and the registration of the gift deed, emphasizing that the renewal was applied for before the deed registration. The court criticized the issuance of the notice based on the timing of the approval, stating that the authority failed to consider the valid approval granted to the trust. The court concluded that the notice was invalid and ordered in favor of the petitioner, emphasizing the entitlement to the stamp duty remission under the relevant G.O. and the approval under Section 80G.

In conclusion, the court found the notice demanding additional stamp duty from the Charitable Trust invalid due to the erroneous consideration of the approval under Section 80G granted post-registration. The court emphasized the trust's entitlement to the stamp duty remission based on the valid approval preceding the gift deed registration. The judgment favored the petitioner, highlighting the importance of adhering to the conditions of the G.O. for stamp duty remission and recognizing the significance of the approval date under Section 80G.