9911796707
TMI Blog2012 (11) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... me Tax (Exemptions) Delhi vide order dt. 01.09.2011. Grounds of Appeal 1. The order of the ld. DIT (E) is biased, arbitrary, illegal and is against the facts of the case on record. It is prayed. (i) that the said order may kindly be cancelled and (ii) the ld. DIT (E) Delhi be directed to allow the continuation of approval granted u/s 80G(5)(vi) to the association and oblige. 2. The assessee filed an application for renewal of exemption u/s 80G on 31st March, 2011 in Form No.10G. Ld. DIT (E) asked the assessee to furnish certain documents/explanations vide letter dated 18th April, 2011 and being dissatisfied with the explanation filed by the assessee, ld. DIT (E) has held that there is no element of charity in the activity of the society as the same is carried out purely on commercial lines for commercial entities and people. It is held by DIT (E) that the activity of the assessee is hit by the proviso to Section 2(15) of the IT Act, 1961 as amended by Finance Act, 2008 w.e.f. Assessment Year 2009-10 and, in this manner, the application filed by the assessee for renewal of exemption u/s 80G has been rejected. 3. As it can be seen from the statement of facts filed by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption) was further wrong for not appreciating that the appellant society is already registered u/s 12A(a) of the Income Tax Act, 1961, for doing charitable activities and also fulfill the conditions laid down u/s 80G(5)(vi) of the Act, and granted exemption u/s 80G for the period from 01.04.07 to 31.03.10 vide orders dated 26.04.2007. 4. That the ld. DI (Exemption) further failed to consider the information given and the documents filed which were acknowledged on 10.03.11 prior to pass the rejection orders, for the renewal of exemption to the appellant society. 5. That the rejection of renewal of exemption is further bad in law, as no reasonable and proper opportunity if any was ever afforded to the appellant society to present their case before the DI (Exemption), because the notice alleged to be issued were not received/served upon to them. 6. That appellant society assails their rights to amend, alter or change any grounds of appeal of any time even during the course of hearing of instant appeal." 2. The assessee being a charitable institution filed an application for renewal of approval u/s 80G(5) on 10th March, 2011. The assessee was enjoying approval u/s 80G vide order da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the explanatory memorandum to Finance (No. 2) Bill, 2009 was as under : "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 clause shall have effect for such assessment year or years, not exceeding five assessment years, as may be specified in the approval. Due to this limitation imposed on the validity of such approvals, the approved institutions or funds have to bear the hardship of getting their approvals renewed from time to time. This is unduly burdensome for the bona fide institutions or funds and also leads to wastage of time and resources of the tax administration in renewing such approvals in a routine manner. Therefore, it is proposed to omit the proviso to clause (vi) of sub-section (5) of section 80G to provide that the approval once granted shall continue to be valid in perpetuity. Further, the Commissioner will also have the power of withdraw the approval if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have also carefully gone through the provisions of Section 80G(5). Clause (vi) of sub-section (5) of Section 80G stipulates for the non-taxability of donations received by an institution which inter alia includes charitable institution registered u/s 12 of the Act. The fundamentals of sub-section (5) of Section 80G is that 80G approval will be granted to the charitable institutions on the same line as the registration to a charitable institution is granted u/s 12A. The assessee is already enjoying benefit of registration as charitable institution which is not shown to be withdrawn. It applied for renewal u/s 80G(5)(vi) as the validity period of already granted approval had expired. Before omission of the proviso to Section 80G(5) (vi) by the Finance (No.2) Act, 2009, w.e.f. 1.10.2009, it was the requirement of law that approval granted u/s 80G shall have effect for such assessment year or years, not exceeding five assessment years which was to be specified in the approval itself. 8. As per provisions applicable at the time of grant of approval, ld. DIT (E) vide order dated 26th April, 2007 had granted approval for the period from 1.4.2007 to 31st March, 2010. It is already mentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tended in perpetuity unless specifically withdrawn. All the authorities working under the control of CBDT are bound to follow the instructions issued by the CBDT. Therefore, it has to be held that as assessee's existing approval was expiring on or after the 1st day of October, 2009, the same shall be deemed to have been extended in perpetuity unless specifically withdrawn. We have already mentioned that there is no material on record according to which it can be said that the approval granted to the assessee u/s 80G (5) was specifically withdrawn and what is rejected by the impugned order is the renewal application of the assessee which does not have any meaning in law as the assessee was not under an obligation to seek renewal as approval granted to it shall be deemed to have been extended in perpetuity. The aforementioned decision of Hon'ble Allahabad High Court in the case of Babu Hargovind Dayal Trust (supra) also support this proposition. Therefore, we vacate the order of ld. DIT (E) vide which the renewal application filed by the assessee for approval u/s 80G has been rejected. It is held that the approval granted to the assessee u/s 80G will act in perpetuity unless it is sp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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