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TMI Blog2011 (2) TMI 315X X X X Extracts X X X X X X X X Extracts X X X X ..... ithstanding And Without Prejudice to Ground Nos. I And II Taken Above:- III. The Ld. CIT grossly erred on facts and in law in not affording any opportunity to the appellant Trust to have its say or make necessary compliance of the reasons relied upon by him while passing the present order under section 80G(5) of the I.T. Act, 1961 and in holding that as there are no details or evidence to prove the charitable activities carried out by the Trust and are thus not justified and genuine. IV. The Ld. CIT erred on facts and in law in rejecting the renewal under section 80G(5) and in holding that he is not satisfied regarding the existence and genuineness of the Trust despite the fact that the copies of the Audited accounts from A.Y's. 2007-08 to 2009-10, including the Registered Trust Deed, supporting documents including activity report, resolutions etc. were duly filed/produced before him. All the above documents in itself were sufficient to prove the existence and genuineness of the Trust and thus the order so passed may kindly be ordered to be set aside and the Ld. CIT be directed to grant the approval under section 80G(5). V. While passing the order under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; In view of the above, I am inclined to hold that the audit report and accounts of the trust do not reflect the correct picture of application of funds/money received by the trust and therefore the renewal of approval under section 80G is not recommended." 4. The same report was forwarded to the ld. Commissioner of Income-tax by the Additional Commissioner of Income-tax, Range 3, Lucknow. The ld. Commissioner of Income-tax drew the attention of one of the Trustees who attended before him and submitted that huge expenditure on seminars and workshop had been incurred. The attention was also drawn to the various payments made to the Trustees which had not been disclosed in the audit report and books of account. According to the ld. Commissioner of Income-tax nothing was furnished/submitted by the Trustee. He, therefore, was of the view that the charitable activities carried out by the assessee-trust were not genuine. The ld. Commissioner of Income-tax held that there was no material on record to establish either the genuineness or the charitable nature of the activities of the assessee-trust. He, therefore, did not grant approval under section 80G(5) of the Act and rejecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roval. It was further submitted that the aforesaid clause has been omitted w.e.f. 1.10.2009 vide Finance (No.2) Act, 2009 and therefore the Legislature in all its wisdom has sought to omit this proviso to provide that approval once granted shall continue to be valid in perpetuity. Thus, as per this amendment any approval expiring on or after 1st day of October, 2009 shall be deemed to have been extended in perpetuity. It was pointed out that in assessee's case the approval was expiring on 31.3.2010 i.e. after almost six months and the cut off date, and the said amendment was brought in the statute only to reduce the hardships of getting the approval renewed from time to time and this was also burdensome for the bona fide institutions or funds and also lead to wastage of time and resources of the tax administration in renewing such approvals in a routine manner. It was contended that even if the assessee had filed for renewal under an erroneous impression or misconception of law still the mere filing shall not empower the ld. Commissioner of Income-tax to pass any order and reject the application. It was stated that the application has been filed under a misconception. The same shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 80G recognition in perpetuity in an unqualified manner because the said section says that a renewed section 80G recognition shall continue "unless specifically withdrawn" which makes it amply clear that the power to withdraw the recognition will continue to vest with the ld. Commissioner of Income-tax. It was further stated that on the date on which the proviso to clause (vi) of sub-section (5) of section 80G of the Act was withdrawn i.e. 1.10.2009, another section was introduced in the Income-tax Act which is section 293C. The said section is applicable on any and every approval granted by the concerned authorities, therefore, the ld. Commissioner of Income-tax had the power on 1.10.2009 onwards to withdraw the said recognition. As regards to the affidavit filed by the Managing Trustee of the assessee that an application for recognition was filed in ignorance of law, the ld. D.R. submitted that it may be so but it provided cause of action to the ld. Commissioner of Income-tax to reconsider the recognition granted earlier. Hence, a cause of action was created which provided the situation wherein an adjudication on the merits of section 80G recognition become possible. It was furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act, the approval was to be renewed from time to time. However, considering the hardship, the Legislature in all its wisdom has sought to omit this proviso on 1.10.2009 vide its Finance (No. 2) Act, 2009. Therefore now approval once granted shall continue to be valid in perpetuity. In the instant case, the approval was granted to the assessee upto 31.3.2010, therefore, in view of the aforesaid omission of the proviso to section 80G(5)(vi) of the Act vide Finance (No. 2) Act, 2009, the approval once granted shall continue to be valid in perpetuity. The memo explaining the provisions in Finance (No. 2) Bill, 2009 as reported in 314 ITR 193 (St.) at page 194 reads as under:- "This amendment will take effect from 1st day of April, 2009 and shall accordingly, apply in relation to assessment year 2009-10 only. Further as per clause (vi) of sub-section (5) of section 80G of the Income-tax Act, 1961, the institutions or funds to which the donations are made have to be approved by the Commissioner of Income-tax in accordance with the rules prescribed in rule 11AA of the Income-tax Rules, 1962. The proviso to this clause provides that any approval granted under this cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D.R. that the provisions contained in section 293C of the Act enables the CIT to withdraw approval is concerned, it is noticed that the said section has been inserted by the Finance (No. 2) Act, 2009 w.e.f. 1.10.2009 i.e. from the date on which provisions of section 80G(5)(vi) has been withdrawn, the provisions contained in section 293C read as under:- "293C. Where the Central Government or the Board or an income-tax authority, who has been conferred upon the power under any provision of this Act to grant any approval to any assessee, the Central Government or the Board or such authority may, notwithstanding that a provision to withdraw such approval has not been specifically provided for in such provision, withdraw such approval at any time: Provided that the Central Government or Board or income-tax authority shall, after giving a reasonable opportunity of showing cause against the proposed withdrawal to the assessee concerned, at anytime, withdraw the approval after recording the reasons for doing so." 13. From the proviso attached to the section 293C of the Act, it is crystal clear that even if any Income-tax Authority wants to withdraw approval, he sha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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