2017 (9) TMI 527 - HC - Income Tax

Refusal for approval under Section 80G - registration under Section 12A is still valid - date of filing of Application in form 10G - Held that - The Tribunal, in examining the legality and validity of the order of the Commissioner, particularly in the factual background, correctly held that the Authority cannot refuse the approval under Section 80G as admittedly in the preceding years on the same activities and objects, approval under Section 80G was granted and the registration under Section 12A is still valid. It is in such circumstances and when the application was filed on 2nd November, 2011, but only partial compliance was made later on, it cannot be said that the date of making such compliance is the date of the Application. Every single compliance relating to the procedure was made and when the Revenue did not dispute that the registration under Section 12A is valid, that prior to the instant application the certificate under Section 80G was granted, then all the more, we do not think that the Tribunal s order raises any substantial question of law.

Summary

Issues:
Challenge to Tribunal's order in Income Tax Appeal, Interpretation of Section 80G(5)(vi) of Income Tax Act, Compliance with procedural requirements for approval under Section 80G, Validity of application date for approval under Section 80G, Legality and validity of Commissioner's order, Dispute over date of application filing, Approval under Section 80G based on prior approvals and valid registration under Section 12A.

Interpretation of Section 80G(5)(vi) of Income Tax Act:
The judgment analyzed the provisions of Section 80G(5)(vi) of the Income Tax Act, which specifies conditions for deductions from the total income of the assessee in relation to donations made to charitable institutions or funds. It was highlighted that for donations made after a certain date, the institution or fund must be approved by the Commissioner in accordance with the rules. The judgment emphasized the importance of fulfilling the conditions laid down in the section for claiming deductions under Section 80G.

Compliance with Procedural Requirements for Approval under Section 80G:
The case involved the assessee filing an application for approval under Section 80G of the Income Tax Act. The Commissioner noted several deficiencies in the application, including missing financial statements, notes on activities, and the Memorandum of Association. The judgment discussed the mandatory nature of these requirements under Rule 11AA and the need for the assessee to comply with them for approval. The Tribunal examined whether the assessee rectified the defects pointed out by the Commissioner and the significance of such compliance in determining the validity of the application.

Validity of Application Date for Approval under Section 80G:
A crucial aspect of the judgment was the dispute over the date of filing the application for approval under Section 80G. The Tribunal considered the date when the assessee rectified the deficiencies highlighted by the Commissioner and whether that date should be deemed as the valid date of filing the application. The judgment delved into the timeline of events and the Tribunal's reasoning for determining the actual date of application submission for approval under Section 80G.

Legality and Validity of Commissioner's Order:
The legality and validity of the Commissioner's order rejecting the application for approval under Section 80G were extensively examined in the judgment. The Tribunal scrutinized the factual background and the reasons provided by the Commissioner for the rejection. It assessed whether the Commissioner had the authority to refuse approval under Section 80G based on the procedural deficiencies highlighted in the application and the implications of such refusal on the assessee's eligibility for deductions.

Approval under Section 80G based on Prior Approvals and Valid Registration under Section 12A:
The judgment emphasized the significance of prior approvals under Section 80G and the validity of registration under Section 12A in determining the eligibility of the assessee for approval under Section 80G. The Tribunal considered the continuity of approvals granted in previous years and the validity of registration under Section 12A as crucial factors in assessing the legality of the Commissioner's decision to reject the application. It highlighted the importance of considering past approvals and registrations in evaluating the current application for approval under Section 80G.

In conclusion, the judgment dismissed the appeal challenging the Tribunal's order, emphasizing that all procedural compliances were met by the assessee, and there was no substantial question of law raised by the Tribunal's decision. The judgment provided a detailed analysis of the issues related to the interpretation of Section 80G, compliance with procedural requirements, the validity of the application date, the legality of the Commissioner's order, and the significance of prior approvals and valid registrations under Sections 80G and 12A.