Laxmi Charitable Trust, Kolkata V. DIT, Exemption, Kolkata, Kolkata

ITA 1971/KOL/2010

• Counselvise Citation: 197123514 RSA 2010
• Duration Of Justice: 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2011
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 25-10-2010
• Court: TRIBUNAL
• Department Lawyers: P S DUTTA
• Assessee Lawyers: SAMAR SEN
• Keywords: Charitable institution
• Section: 80G

Judgement Text

, , , , , , ,, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [ . . . . . . . . , ,, , , ,, , . . . . . .. . ! ! ! ! , ' ' ' ' ] [BEFORE HONBLE SHRI B. R. MITTAL, JM & HONBLE SHRI S.V. MEHROTRA, AM] #$ #$ #$ #$ / I.T.A NO. 1971/KOL/2010 LAXMI CHARITABLE TRUST -VS.- DIRECTOR OF INCOME TAX (EXEMP TION) KOLKATA. [PAN : AAATL 5651 L] KOLKATA. (&' /APPELLANT ) ()*&'/ RESPONDENT ) &' / FOR THE APPELLANT : , /SHRI SAMAR SEN )*&' / FOR THE RESPONDENT : , / SHRI P. S. DUTTA - /O R D E R [ . . . . . .. . ! ! ! ! , ] PER S.V. MEHROTRA, AM THE ASSESSEE HAS FILED THIS APPEAL AGAINST ORDER O F DIT(EXEMPTION), KOLKATA DATED 13.08.2010. 2. THE ASSESSEE HAD FILED AN APPLICATION ON 15.01.2 010 IN FORM NO.10G SEEKING RENEWAL OF EXEMPTION U/S. 80G(5)(VI) OF THE INCOME TAX ACT, 19 61 AND I.T.A.T. ORDER DATED 31.05.2010. THE DIRECTOR OF INCOME TAX (EXEMPTION) VIDE HIS ORD ER DATED 13.08.2010 REJECTED THE APPLICATION FOR RENEWAL OF EXEMPTION. 3. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND HAVE PERUSED THE RECORDS OF THE APPEAL. PRIOR TO ITS AMENDMENT, SECTION 80G(5) CLAUSE (VI) READ AS UNDER :- IN RELATION TO DONATIONS MADE AFTER THE 31 ST DAY OF MARCH, 1992, THE INSTITUTION OR FUND IS FOR THE TIME BEING APPROVED BY THE COMMISSIONER IN ACCORDANCE WITH THE RULES MADE IN THIS BEHALF. PROVIDED THAT ANY APPROVAL SHALL HAVE EFFECT FOR SU CH ASSESSMENT YEAR OR YEARS, NOT EXCEEDING FIVE ASSESSMENT YEARS, AS M AY BE SPECIFIED IN THE APPROVAL. ITA NO. 1971/KOL/2010 2 VIDE FINANCE ACT NO.2/2009, PROVISO WAS OMITTED WIT H EFFECT FROM 01.10.2009. THE IMPORT OF THE OMISSION OF THIS PROVISO HAS BEEN CONSIDERED BY C.B.D.T. IN ITS CIRCULAR NO.7/2010 DATED 27.10.2010 VIDE PARA 5, WHICH READS AS UNDER :- 5. AS REGARDS APPROVALS GRANTED UPTO 1.10.2009 UND ER SECTION 80G BY THE COMMISSIONERS OF INCOME TAX/ DIRECTORS OF INCOME TA X, PROVISO TO SECTION 80G (5) (VI) CLARIFIED THAT ANY APPROVAL SHALL HAVE EFFECT FOR SUCH ASSESSMENT YEAR OR YEARS NOT EXCEEDING FIVE ASSESSMENT YEARS A S MAY BE SPECIFIED IN THE APPROVAL. THE ABOVE PROVISO WAS DELETED BY THE FINA NCE (NO. 2) ACT 2009. THE INTENT BEHIND THE DELETION OF ABOVE PROVISO AS EXPLAINED IN THE EXPLANATORY MEMORANDUM TO FINANCE (NO.2) BILL, 2009 WAS AS UNDER: FURTHER AS PER CLAUSE (VI) OF SUB-SECTION (5) OF S ECTION 80G OF THE INCOME- TAX ACT, 1961, THE INSTITUTIONS OR FUNDS TO WHICH T HE DONATIONS ARE MADE HAVE TO BE APPROVED BY THE COMMISSIONER OF INCOME-T AX IN ACCORDANCE WITH THE RULES PRESCRIBED IN RULE IIAA OF THE INCOME-TAX RULE, 1962. THE PROVISO TO THIS CLAUSE PROVIDES THAT ANY APPROVAL GRANTED U NDER 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 S UCH APPROVALS, THE APPROVED INSTITUTIONS OR FUNDS HAVE TO BEAR THE HAR DSHIP OF GETTING THEIR APPROVALS RENEWED FROM TIME TO TIME. THIS IS UNDULY BURDENSOME FOR THE BONA FIDE INSTITUTIONS OR FUNDS AND ALSO LEADS TO W ASTAGE OF TIME AND RESOURCES OF THE TAX ADMINISTRATION IN RENEWING SUC H APPROVALS IN A ROUTINE MANNER. THEREFORE, IT IS PROPOSED TO OMIT THE PROVISO TO CL AUSE (VI) OF SUB-SECTION (5) OF SECTION 80G TO PROVIDE THAT THE APPROVAL ONCE GR ANTED SHALL CONTINUE TO BE VALID IN PERPETUITY. FURTHER, THE COMMISSIONER W ILL ALSO HAVE THE POWER OF WITHDRAW THE APPROVAL IF THE COMMISSIONER IS SAT ISFIED THAT THE ACTIVITIES OF SUCH INSTITUTION OR FUND ARE NOT GENUINE OR ARE NOT BEING CARRIED OUT IN. ACCORDANCE WITH THE OBJECTS OF THE INSTITUTION OR F UND. THIS AMENDMENT WILL TAKE EFFECT FROM 1ST DAY OF OCTOBER, 2009. ACCORDIN GLY, EXISTING APPROVALS EXPIRING ON OR AFTER 1ST OCTOBER, 2009 SHALL BE DEE MED TO HAVE BEEN EXTENDED IN PERPETUITY UNLESS SPECIFICALLY WITHDRAW N. IT APPEARS THAT SOME DOUBTS STILL PREVAIL ABOUT THE PERIOD OF VALIDITY OF APPROVAL UNDER SECTION 80G SUBSEQUENT TO 1.10.2009, ESPECIALLY IN VIEW OF THE FACT THAT NO CORRESPONDING CHANGE HAS BEEN MADE IN RULE 1IA (4). TO REMOVE ANY DOUBTS IN THIS REGARD, IT IS REITERATED THAT ANY APPROVAL UNDER SECTION 80G (5) ON OR AFTER 1.10.2009 WOULD BE A ON E TIME APPROVAL WHICH WOULD BE VALID TILL IT IS WITHDRAWN. ITA NO. 1971/KOL/2010 3 WE FIND THAT LD. DIT(EXEMPTION) HAS NOT TAKEN INTO CONSIDERATION THE EFFECT OF AMENDMENT READ WITH ABOVE CIRCULAR AND, THEREFORE, WE SET ASIDE TH E ORDER OF LD. DIT(EXEMPTION) AND RESTORE THE MATTER BACK TO HIS FILE FOR DENOVO CONSIDERATION. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. - - - - '. '. '. '. / // / .0 .0 .0 .0 1 1 1 1 2 2 2 2 3' 3' 3' 3' ORDER PRONOUNCED IN THE OPEN COURT ON 13.07 . 2011. SD/- SD/- [ . . . . . . . . , ,, , ] [ . . . . . .. . ! ! ! ! , ' ' ' ' ] [ B. R. MITTAL ] [ S.V. MEHROTRA ] JUDICIAL MEMBER ACCOUNTANT ME MBER 3' / DATED : 13 TH JULY, 2011. - 4 )5 6578 - COPY OF THE ORDER FORWARDED TO: 1. 9 /APPLICANT- LAXMI CHARITABLE TRUST, C/O. LAXMI GL OBAL (P) LTD., 37, SHAKESPEARE SA RANI, KOLKATA-700017. 2 )*&' / RESPONDENT : DIRECTOR OF INCOME TAX (EXEMPTION), 10B, MIDDLETON ROW, 6 TH FLOOR, KOLKATA-700 071. 3. -0 / DIT(E) 4. -0 ( )/ CIT(A) 5. 91 )0 / DR, KOLKATA BENCHES, KOLKATA [ *5 ) / TRUE COPY] -0. / BY ORDER : / #; /DEPUTY/ASSTT. REGISTRAR . [KKC 9<= 0>; ?9 /SR.PS]