SWAYAM, Kolkata V. DIT, Exemption, Kolkata, Kolkata

ITA 344/KOL/2011

• Counselvise Citation: 34423514 RSA 2011
• Duration Of Justice: 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 01-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V A RAJU
• Assessee Lawyers: INDU CHATRATH
• Section: 80G

Judgement Text

, , , , , , ,, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : KOLKATA [ . . . . . . . . , ,, , , ,, , . . . . . .. . ! ! ! ! , ' ' ' ' ] [BEFORE HONBLE SHRI B. R. MITT AL, JM & HONBLE SHRI SHRI S.V. MEHROTRA, AM] #$ #$ #$ #$ / I.T.A NO. 344/KOL/2011 SWAYAM -VS.- DIRECTOR OF INCOME TAX (E XEMPTION) KOLKATA. [PAN : AADTS 7759 P] KOLKATA. (&' /APPELLANT ) ()*&'/ RESPONDENT ) &' / FOR THE APPELLANT : , /SHRI INDU CHATRATH )*&' / FOR THE RESPONDENT : , / SHRI V. A. RAJU - /O R D E R [ . . . . . .. . ! ! ! ! , ] PER S.V. MEHROTRA, AM THE ASSESSEE HAS FILED THIS APPEAL AGAINST ORDER O F DIT(EXEMPTION), KOLKATA DATED 15.11.2010. 2. THE ASSESSEE HAD FILED AN APPLICATION ON 19.03.2 010 IN FORM NO.10G SEEKING RENEWAL OF EXEMPTION U/S. 80G(5)(VI) OF THE INCOME TAX ACT. TH E APPLICATION WAS REJECTED VIDE ORDER DATED 15.11.2010 BY THE LD. DIRECTOR OF INCOME TAX (EXEMP TION), KOLKATA. 3. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND HAVE PERUSED THE RECORDS. WE FIND VIDE PETITION DATED 09.11.2010, THE ASSESSEE A T PAGE 2 OF THE PAPER BOOK, HAD SOUGHT TO WITHDRAW ITS APPLICATION FOR RENEWAL IN VIEW OF CIR CULAR ISSUED BY C.B.D.T. VIDE CIRCULAR NO.7/2010 DATED 27.10.2010. HOWEVER, INSTEAD OF ALL OWING THE ASSESSEE TO WITHDRAW ITS APPLICATION, LD. DIT (EXEMPTION) REJECTED THE ASSESSEES APPLICA TION. WE FIND AT PARA 5 OF CIRCULAR NO.7/2010 DATED 27.10.2010, C.B.D.T. HAS OBSERVED 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 EXPL AINED IN THE EXPLANATORY MEMORANDUM TO FINANCE (NO.2) BILL, 2009 WAS AS UNDE R: ITA NO. 344/KOL/2011 2 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 THE D ONATIONS ARE MADE HAVE TO BE APPROVED BY THE COMMISSIONER OF INCOME-TAX IN ACCOR DANCE WITH THE RULES PRESCRIBED IN RULE IIAA OF THE INCOME-TAX RULE, 196 2. THE PROVISO TO THIS CLAUSE PROVIDES THAT ANY APPROVAL GRANTED UNDER THI S CLAUSE SHALL HAVE EFFECT FOR SUCH ASSESSMENT YEAR OR YEARS, NOT EXCEEDING FIVE A SSESSMENT 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 HARDSHIP OF GETTING THEIR APPROVALS RENEWED FROM TIME TO TIME. THIS IS UNDULY BURDENSOM E 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 ROUT INE 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 GRANT ED SHALL CONTINUE TO BE VALID IN PERPETUITY. FURTHER, THE COMMISSIONER WILL ALSO HAVE THE POWER OF WITHDRAW THE APPROVAL IF THE COMMISSIONER IS SATISFIED THAT THE ACTIVITIES OF SUCH INSTITUTION OR FUND ARE NOT GENUINE OR ARE NOT BEIN G CARRIED OUT IN. ACCORDANCE WITH THE OBJECTS OF THE INSTITUTION OR FUND. THIS A MENDMENT WILL TAKE EFFECT FROM 1ST DAY OF OCTOBER, 2009. ACCORDINGLY, EXISTIN G APPROVALS EXPIRING ON OR AFTER 1ST OCTOBER, 2009 SHALL BE DEEMED TO HAVE BEE N EXTENDED IN PERPETUITY UNLESS SPECIFICALLY WITHDRAWN. IT APPEARS THAT SOME DOUBTS STILL PREVAIL ABOUT THE PERIOD OF VALIDITY OF APPROVAL UNDER SECTION 80G SUBSEQUENT TO 1.10.2009, ESPECIAL LY 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 AP PROVAL UNDER SECTION 80G (5) ON OR AFTER 1.10.2009 WOULD BE A ONE TIME APPROVAL WHI CH WOULD BE VALID TILL IT IS WITHDRAWN. THEREFORE, LD. DIT (EXEMPTION) SHOULD HAVE ALLOWED THE ASSESSEE TO WITHDRAW ITS APPLICATION SEEKING RENEWAL OR REGISTRATION. IN VIEW OF THE ABO VE AND IN THE LIGHT OF CBDT CIRCULAR NO.7/2010 DATED 27.10.2010, WE ALLOW THE ASSESSEE TO WITHDRAW ITS APPLICATION FOR SEEKING RENEWAL OF REGISTRATION AS PRAYED FOR AND ALLOW THE ASSESSEES APPLICATION. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . - - - - '. '. '. '. / // / .0 .0 .0 .0 1 1 1 1 2 2 2 2 3' 3' 3' 3' ORDER PRONOUNCED IN THE OPEN COURT ON 27. 0 5. 2011. SD/- SD/- [ . . , ] [ . . ! , ' ] [ B. R. MITTAL ] [ S.V. MEHROTRA ] JUDICIAL MEMBER ACCOUNTANT MEMBER 3' / DATED : 27TH MAY, 2011. ITA NO. 344/KOL/2011 3 - 4 )5 6578 - COPY OF THE ORDER FORWARDED TO: 1. 9 /APPLICANT- SWAYAM, C/O. K.L. CHATRATH & CO. 8, C IRCUS MARKET PLACE, KOLKATA-700017. 2 )*&' / RESPONDENT : DIRECTOR OF INCOME TAX (EXEMPTION), 10B, MIDDLETON ROW, KOLKATA. 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]